Forming Your Artist Development Team
“The Business Manager”
by Camille Barbone
This is the final installment of the Artist Development Team series which established the functionality and importance of creating a viable, interactive and proactive group of people to work for and with individuals aspiring to a successful career in the Music Industry.
This installment focuses on the financial side of an artist’s career with the hiring of a Business Manager. I am referring to the notorious “bean counter” that an artist sometimes contentiously can’t live with or without. In the world outside of the Music Industry, Business Managers are responsible for overseeing and guiding a company or individual’s financial activities. They get, give and follow the money, investments and tax liabilities. A business manager facilitates the financial relationships that artists have with record labels, music publishers, concert promoters, licensors, and other sources of income or indebtedness. Let’s be real; artists, musicians, anyone creating intellectual properties is a commodity in and of themselves. They both create the properties and are the properties. There is a real need for expert help with the financial aspects of a career in Music. A business manager’s main responsibility is to keep the artist financially solvent, in compliance with tax laws and growing. Often business management responsibilities are confused with artist management duties, but they are NOT one in the same. Artist Managers deal with all aspects of career development while Business Managers deal with all aspects of financial development.
What Does a Business Manager do?
Accountant, investment counselor, bookkeeper, a music Business Manager is tasked with everything having to do with money; collecting income, paying expenses, investments and financial planning. They are asked to consult on compensation terms for contracts and deals. They seek out and review investment opportunities and help to collect income or recover unpaid fees or royalties. They will handle real estate transactions, and the accounts receivable, money coming in and accounts payable, money going out activities for the artist. They are tasked with overseeing the client’s assets and can change the trajectory of a career from one of security, opulence and solvency to a tragic nightmare of debt, tax problems and ruin. The Business Manager works with the artist development team from a financial perspective.
What to look for in a Business Manager?
Like the artist’s manager, the relationship between an artist and business manager is based on a fiduciary relationship, simply put a relationship based on unwavering trust and clear communication. There is a great deal of power that comes with the role of a business manager. They can sign checks, move money from one account to another, apply for mortgages and loans in the “name” of the artist and usually have power of attorney status which means that they can act as if they ARE the artist. That’s a great deal of power and the temptation is great so the individual should be free from scandal and completely above scrutiny of any kind. Besides understanding business and finance at a very high level, the individual must be of strong moral and ethical fiber. They must be ambitious confident and honest.
Most business managers begin their careers as interns with established business management firms. They learn how to handle assets, bank accounts, tax returns, investments and other highly confidential and important financial activities. They should have a solid grasp of record company accounting, tour budgeting and reconciliation, estate planning and asset protection. It helps if they are creative themselves but at the very least, they must be, intuitive, articulate and possess strong communication and explanatory skills.
While a specific degree is not a requirement, top business managers possess a degree in accounting or business administration, but they should have an extensive grasp of applicable tax laws. They should understand entertainment business accounting as it relates to music sales and streaming, music publishing, sponsorships, endorsements, marketing, and promotion. If they don’t know the business, move on to someone that does.
Business management for an artist is not a typical nine to five job. The more popular the artist becomes the more demanding the hours and intense the work. Millions of dollars can hang in the balance.
A good business manager is a multi-faceted member of the artist development team. Interview candidates and ask the “hard” questions, the ones you feel are invasive or rude. You are not forging a friendship at this point in time, that may come later on in the relationship. You are hiring an integral member of your team, an individual that can easily exploit, steal or extort so be tough. Ask about terms of payment. Ask the individuals to provide you with a list of tasks he or she will be responsible for. Set up a method to check their work regularly. Make them accountable. Stay involved and stay “hands on” throughout your career. You should make it a point to learn what the individual is doing for you, who they work with and how they handle your day to day financial operation. It’s not about autonomy. It’s about accountability.
It is also important to understand exactly when, in the course of your career, you will need the services of a Business Manager. It usually coincides with the level of success an artist has achieved. It is tied to the amount of revenue an artist is earning and the number of people working for and with the artist. The more complicated a career becomes, and it can get very complex, the more you need a Business Manager and an Artist Development team.
How to Work with a Business Manager
You and perhaps your career/creative manager, the artist manager, will have to provide the Business Manager with the information that will enable them to handle a typical day as your financial guru; cash receipt, bill payment, income tracking, bank reconciliation, cash flow management, tax planning and preparation, and budgeting. You will be able to call them for assistance and information for anything having to do with money; setting up utility accounts for a new residence, filing an insurance claim, bill paying over the phone or online or even a problem with one of your credit cards. Your Artist Manager will also help to oversee the work ethic and skillsets of the Business Manager. Remember this is a very powerful position and an artist is quite vulnerable when it comes to finances so there can never be enough oversight.
Ask about the accounting system, such as QuickBooks, that they use and make sure that you will be able to access your records at any time. Be sure your accounts are not co-mingled with other clients.
Set parameters and triggers that prompt your Business Manager to alert you to specific situations like losses, overdrafts, lawsuits, bonuses, etc. You need to be involved and you must understand your financial health at all times.
Some Business Managers work for a percentage of gross income while others work on retainer. The latter, working under retainer is preferred. However, as your career increases in magnitude so does the workload so you have to treat your team right and retainer agreements should be reviewed to ensure the individual is being paid for the work and for what he or she does.
Please refer back to this series for instructions on how to assemble your artist development team. Each installment contains a great deal of valuable, useful and applicable information. The time will come in an artist’s career when they will need each and every member of the Artist Development Team to conduct business and to enjoy a successful career. You can’t do it alone. You can’t do it with a group of experienced, honest and trustworthy professionals. Take the time to find them. It has been an honor compiling this information for those interested in a career in Music. Thank you for reading. I sincerely hope it helps you. Make Music, Make Money. Be Happy.
Camille Barbone is an entertainment industry professional with over 25 years of experience. She has worked for major companies including Sony and Universal, Warner Chappell and other major publishers. She has owned two state of the art recording studios, developed and managed high-profile artists such as Madonna, produced major concerts and provided music for major motion pictures producers such as Wes Craven, Steven Spielberg Productions and Cinepix Films. She has conducted numerous seminars, panels and workshops at SXSW, the New Music Seminar and other entertainment conferences. She has been featured in many books and has appeared on many news and talk shows. She holds a degree in Psychology and an MBA specializing in Marketing. Camille coaches and consults via her company, Camille Barbone Coaching and Consulting, a business that provides guidance and structure to individuals and companies aspiring to success in the Entertainment Industry. She guides people through viable planning and constant progress. Please contact Camille at firstname.lastname@example.org