Dangers Of Growing Too Fast in the Music Business

Boo.com has spent $125 million in 18 months and was yet to make sales. At launch their whole business model collapsed because the site needed broadband which at the time was only available to a few people. Sales were so poor and complaints were mounting and in the year 2000 the company went bust. The name and some of part of its systems sold for $250,000!

Ambition is good yet every ambition has to be tempered with some element of patient endurance. Growing, learning; then growing and learning, fixing the problems and growing and learning. When anyone; either artists, labels or other music businesses try to circumvent this simple method they most of the time end in the liquidators office.

So how do you know your music business is growing too fast, or that you are beginning to bite off more than you can chew?

Unable to pay running costs - When any business is incapable of paying the small bills like telephone, gas, electricity they are probably in a dangerous zone especially if the business is embarking on an expansion programme of some sort. When a company is growing and expanding well they are well positioned to meet their day to day expenses but the ones without a good growth plan will struggle.
Little or no cashflow- Where is all the money going!? Money/cash is the life blood of any business and we must always have a reserve of about 20 - 30 per cent of the profits if the business is to survive a lean period. If an unexpected event takes place in the business cycle i.e. a distributor goes bust owing money; that could cause a rapidly expanding business to go bust too. However with cash in reserve it becomes easier to ride a business storm.
Poor level of sales in comparison to expansion/activities- Expansion has to be funded by money. It could either be borrowed money of money that has been saved over a long period. Whatever the method a business decides to pursue, sales become even more important during an expansion period because increase sales will affect the cashflow of the business. So when a music business is financing a new product or service it is essential that they keep their eyes on the need to increase the level of sales to match the planned growth.
High gearing- Any business that borrows too much is simply asking for trouble in future because borrowing is and will always be the most expensive type of debt. The finance of a company which has 1/3 of its finance as debt can still survive as opposed to the one who has about 70-80% of its finance on debt. Here is the ultimate question about borrowing -"When the financers call for their money can you pay up without putting the business in danger!?"
Accepting orders you cannot meet or are unable to say no to- At a particular staging of one's business there are certain types of suppliers or service providers you cannot afford to deal with. For example, if you are just starting a label you may not be in a position to trade with a major distributor who may ask you to supply a minimum of 2000 - 10,000 CD's. If you do supply them it means you will need to wait to get paid and waiting affects the cashflow which affects the business.

Do you want to learn more about making money with your music? If so, download my brand new free 5 week music business training course here: http://www.musicbusinesstools.com/

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The Multitrack Recorder - Still Growing After All These Years

When the digital recording revolution first got it's legs back in the early 80's I believe, it was the multitrack recorder that we used and not the computer-based recording studio that is perhaps more popular today. From the first 4 track cassette's from around 1980 to the latest feature packed 24-bit / 44.1kHz sampling rate one from Zoom.

As the computer became front and center in our digital recording studios some might have wondered if the multitrack machines would become extinct. Not only did that not happen but they've become as intricate and advanced as any computer-based recording system.

If you are into recording at home you basically have 2 choices for how to set up your home studio: computer-based recording system or a multitrack recorder. Both have their pro's and con's but in this short article I want to focus on the advantages of going with the portable recording studio also known as the multitrack recorder.

The Benefits of a Multitrack Recorder:

Portability - Pick it up and take it to your next session, where ever that may be.

All-In-One - Basically bring it home and you can literally be recording right away. This probably won't happen so easily with a computer-based studio setup.

Stability - Also, unlike a computer you won't need to worry about different operating system compatability or stability issues.

Expandable - As complete as they are to get recording right away, you can still go a little nuts and add onto the multitrack studio with monitors, various microphones, even outboard gear like effects processors and compression.

When talking about multitrack recorders I must admit I'm a little biased towards the Tascam ones since that was what got me started back in the early 80's with the Tascam 4 Track Cassette Recorder.

Being primarily a saxophonist my fun with experimenting sometimes went on forever! I could be a horn section or a sax quartet... not only was it a blast but working this way with a multitrack recorder taught me a lot about harmony, chords, what worked for certain things and what didn't.

We are fortunate to have so many companies putting out so many good models with cutting edge features as compared to that old 4 track cassette I used back in the 80's. As companies like Tascam and Fostex continue to improve and develop their recording machines it's great to see new ones like Zoom come along and still take the multitrack recorder to new levels.

As the computer digital recording world grows it was only a matter of time before a multitrack recorder would come along and be able to integrate so well with the computer recording system. The Zoom R16 is an example of this. With all the benefits of the traditional portastudio it can also integrate with a computer in ways a multitrack recorder never did before.

With this new breed you can lay all 8 tracks simultaneously and then use it as an audio interface for your computer's DAW. So, now you can really have the best of both worlds... a multitrack recording studio that's totally portable and when you bring it home it becomes the audio interface for your computer recording system. It can be used one way or the other or both, making this possibly the most versatile piece of gear in the multitrack category... up to now anyway.

Johnny Ferreira is a professional musician and editor of YourHomeRecordingStudio.com featuring articles, tips and reviews on recording studio equipment. Learn more about Tascam Recorders and the exciting Zoom R16.

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