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Sales Taxes for Christian Bands

Sales Tax & Christian Band

Christian bands should collect and pay sales tax on the merchandise we sell.

Should your Christian band be collecting and paying sales tax on the merchandise you sell?

Most often, the answer is “Yes”.

Sales taxes are not controlled by the Federal government, they are governed by states. So, each state gets to set their own rules. For bands that travel from state to state and sell merchandise, sales taxes can be a real headache. Many bands, both Christian and secular, simply sell their merchandise under the table, without collecting or paying sales taxes. This is not legal. There are only 5 states which do not have sales taxes: Oregon, Alaska, Delaware, Montana, and New Hampshire.

Some Christian bands try to get around the system by saying that they do not “sell” merchandise, they take offerings and give gifts in return. This only truly works (is legal) when you are actually willing to give away your merchandise for a donation without specifying the donation amount. Can you afford to give t-shirts away for a penny donation? If not, you are actually selling merchandise and should collect and pay sales taxes.

Most states require anyone who is selling merchandise in their state to get a vendors license before starting to collect sales tax. Most often, there are two kinds of vendors’ licenses available: one for brick and mortar stores and another called a transient license, which is for retail sales made in a variety of locations. Small businesses such as artists and flea market vendors also use this type of license. The transient vendors’ license is what bands need as it allows sales tax to be collected anywhere within the state. Most states require an application form and an application fee, which varies greatly between states. Some states also offer a temporary vendors license, which could be used for a one or two day event in a state that you will not perform in the rest of the year. This temporary license is best for events such as festivals. It usually does not have an application fee.

The amount of sales tax you must collect and how often you must pay them back to the state also varies widely between states. In addition to state sales taxes, most states allow counties and some cities to add additional sales tax. These additional taxes are almost always collected by the state at same the time as the state taxes. Search online for your states sales tax requirements.

Sales taxes are based on the location of the sale,
not the home office of your band.

So your band, even if it is a hobby, will probably need a vendors license for each state that you perform in. Start by obtaining a license from the state in which you reside because that is where virtually all of the bands first gigs will be. As the band expands check with each new state you will perform and obtain whichever licenses they require.

Collecting and paying the appropriate sales tax is one more way to submit to our government. This submission, paying taxes where taxes are due, brings us into greater obedience of all the things God has asked us to do. Our obedience clears the way for God to grant us more favor and blessings.

Irritating and Sinning Christian Band Members

Christian band members irritate each other, it’s a fact of band life. Christian band members sin, it’s a fact of Christian life. We are simply not immune from being human. From time to time we are all going to fail. The real test comes in how we respond to our band mates failure. Have you ever considered that God is just as concerned about how we respond to our band mates as He is with their failure?

Here is an excerpt from The Christian Band Guidebook to help you succeed at responding correctly when your band mate is irritating or outright sinning.

Personnel Issues: Sin Really Bugs Me and So Do YouThe Christian Band Guidebook

The successful ministry of a band hinges on the individual members commitment to holiness (right living). But, defining the boundaries for holiness is a sticky issue between denominations and individuals. Adding to the confusion are personalities that conflict. The guidelines for appropriate behavior and sin must be defined during one of the initial discussions at the start of the band and with the addition of each new member. Gray areas (areas which not all denominations agree upon) to discuss are: smoking, consumption of alcohol, language (are some words acceptable replacements for cursing?), and physical fighting or “horsing around”. Each member will probably have these issues already defined, but personal beliefs must be questioned in light of the goal of the success of the band.

Beyond the gray areas are the definite sin issues: pornography, fornication, drunkenness, illegal drug use, etc. The band must decide, before any of these issues occur, how to handle problems. Ideally, the agreed upon process would be written out in the partnership agreement. Predetermining the process for dealing with sin as a band adds to the consequences of committing the sin, thereby becoming another deterrent to aid the tempted person. Additionally, no accusations of favoritism or unfair dismissal from the band could be rightly entertained if a policy is clearly communicated before the sin is committed.

Personality conflicts can become as intense and confusing as to be perceived as a sin issue. Tempers flair and words are spoken which cannot be taken back, especially on the day of a show when the pressure to perform well is greatest. Remember the adversary is the devil, not your bother.

On the day of a show, defer to you brother, even if you are positive he is wrong, rather than allow any divisiveness to come between members of the band. Deferring is much easier to do if the band understands and reminds members that Satan comes to steal, kill, and destroy—he wants to divide the band to destroy the potential of any further ministry. Determine not to let him win. At the next band practice bring up the issue privately and decide how to handle similar situations in the future. The discussion may be heated and the band may need to table the issue until the next practice to allow tempers to cool off. Agree not to bring the issue up to other people during this cool off time. Come back and try to discuss again, clear thinking will usually prevail and the ministry will not have embarrassed itself in any way. Communicate these issues throughout the life of the band during private band practices, not in front of any extra people. Rumors about the holiness and credibility of ministries are frequently blown out of proportion and devastating to the success of the band.

Do not be naive, grey areas, sin, and personality conflicts plague every band because every band is made up of imperfect people. Band members do not always agree on everything and get along all the time. The successful band plans ahead to deal with each of these problems. The band that stays together does so because of the commitment each member has made to the other, much like a marriage. The band which is the apple of Gods eye loves each other to the point of each member being willing to lay down their life (preferences, dreams, goals, music style, music quality, etc.) for the benefit of any other member.”

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What to do when Your Christian Band Does Not Get Paid

Getting Paid
Christian Bands do not always get paid what they are promised.

It happens to all of us from time to time – we play a show and then, when it comes time to be paid, the booker says he does not have the money. What do we do? What should we do?

Ministry costs money. It costs Christian bands money to put gas in our vehicles to get to shoes and to feed everyone while on the road. It costs venues money to pay for the facilities to put on the show. Sometimes there is simply not enough money to go around.

Here is an excerpt from The Christian Band Guidebook to help us in that awkward situation:

Taking It Like A Man When You Don’t Get Paid

One of the more difficult situations in which to behave like Jesus occurs when the band does not get paid after performing. The most common reason for lack of payment to a band is lack of attendance resulting in poor ticket sales or offerings. Promoters speculate on attendance, hoping to make enough money to cover expenses and a little profit. Most promoters do not have enough money in the bank to cover expenses if the event is less than successful. The ethics of this method of business are questionable, but they are the industry standard of today. So, if the event did not draw a crowd it is highly likely that the promoter lost whatever money was set aside for the show plus is now in debt. An inexperienced promoter will feel devastated, and let down by God or other Christians after a show which has lost money.

At the end of the show the band should receive payment before leaving the venue. Sometimes a band will leave before the end of the show (in a multiple band show) and the promoter will honestly forget or not be aware that the band is leaving. Usually, that is not the case. Before the band leaves politely ask for payment in full, if it has not been received. When the problem arises take a few minutes to seek Gods counsel before approaching negotiations. Do not ever leave the venue in anger without working out a solution with the promoter. Remember that most Christian promoters are honest but inexperienced and are most of the times embarrassed by the lack of funds. Band members have probably felt the same way when a bill which was due which could not be paid. In this situation, ask yourself, “What would Jesus do?” Allow the promoter to give reasons for lack of payment. If any of those reasons are that the band did not perform up to expectations, both parties should refer to the performance agreement, contract, or confirmation letter. If the band has performed up to expectations, try to work out a solution with the promoter.

Possible solutions are:

● Forgive the debt to the band right there in person
● Arrange for payments to be made over a period of time
● Accept partial payment as payment in full
● Accept assets (equipment) in trade for the debt
● Explain the bands need for money and require immediate payment

Treat the promoter as you would like to be treated and God will be your rewarder. It would be foolish to assume that Jesus would automatically forgive every debt immediately. Occasionally, the band will be impressed by God to demand immediate payment in full or something that seems equally as harsh. Do what you believe God is saying in the nicest way possible. Obedience to God with a loving attitude toward your brother is a key to success.

The Christian Band Guidebook
The Christian Band Guidebook

The Christian Band Guidebook has several chapters that will help your band with difficult situations. CLICK HERE to get your copy today!

Recording Cover Tunes

Free Cover Tunes
Giving away free cover tunes is not free.

Should My Christian Band Record Cover Tunes?

Probably Not,
with very few exceptions.

 

There seems to be a myth floating around in the Christian music market that it is OK to record cover tunes and give them away, as long as the band does not charge anything for the CD or download.

That myth is false.

 

Bands, including Christian bands, have recorded cover tunes under the assumption that as long as they are not making any money, they are not breaking copyright laws.

Wrong. Copyright law is not dependent on how much money is or is not made.

 

Christians often assume that because a song is Christian themed and/or written by a Christian that copyright laws do not apply.

Not true. Ministries, even non-profit ministries, are not exempt from copyright law.

 

Bands frequently pass out free CD’s of recorded cover tunes to potential fans and bookers as a way to get started building a fan base and booking gigs.

That’s not the best strategy and it is not legal unless the songwriters received their royalties.

 

Some Christian bands feel it is OK to pass out free recorded cover tunes because they interpret the word “distribute” in copyright law to mean “to sell through a distribution company”. The word actually is interpreted to means “to pass music from one person (or entity) to another”. The legal description of “distribute” has nothing to do with money exchanging hands (or not) or working with a distribution company.

 

So, now that we know what is not true, let’s see what it true
and how the applicable copyright laws work.

 

Songwriting and Recording Copyrights

Every song that the band would want to cover has two sets of copyrights: one held by the songwriter (and their publisher), the other held by the artist(s) who made the recording. Sometimes these two sets of copyrights are held by the same person(s), if the song was both written and recorded by them. But, even in that instance, there are still two sets of copyrights (one for the songwriting and one for the recording).

For example: When a fan burns a copy of a song to a CD and gives it to a friend, they are violating the sound recording (or master) portion of copyright law. The artist(s) that recorded the CD has the right to sue.

And

When an artist(s) records a cover of a song (without a license) they are not violating the sound recording or master potion of copyright law because they are not using the actual recording. The artist(s) who made the song famous does not have the right to sue. But in this case the songwriters’ rights have been violated and so, the publisher/songwriter does have the right to sue.

So, even if a famous artist tells an up and coming artist that it is OK for them to record a cover tune they made famous, the up and coming artist might still be breaking copyright law because the famous artist might not own the songwriting portion of the copyrights.

 

How to Record and Distribute Cover Tunes Legally

The license required to record a cover tune legally is called a mechanical license. This license allows the artist(s) to use a specific musical composition (song) and distribute it on several audio formats (such as CD’s and downloads). It is important to note that this license does not give the artist permission to use the song on a video. Visual recordings of any kind require a different license called a synchronization license. (Yes, you are supposed to get a synchronization license even if you are posting covers recorded from live gigs on YouTube.) If you follow the correct steps to ask for a license, the owner of the song must give it to you; which is why the license is a called a compulsory license.

The first step to obtaining a mechanical license is to identify the owner of the song. This will be the songwriter and/or the publisher. The record label does not usually own the songwriting copyrights. They often own the master or sound recording copyrights, but as we learned earlier the master copyrights do not affect recording cover tunes. Contact information for the songwriter/publisher is available from the PRO’s (performance rights organization): ASCAP, BMI, SESAC, or you can use a licensing service like the Harry Fox Agency or Limelight (you pay a small fee and they make the work much easier). Go through the search on each organizations website until you find the correct information. If you cannot find the song and songwriter/publisher, the other option is to search the U.S. Copyright Office. This search can be extremely tedious and frankly, if the song you are looking for is not famous enough to be listed with a PRO you probably should not be covering it. You can also hire the copyright office to do a search for you—for the ‘bargain’ price of $165 per hour! There is a form to fill out just to get an estimate for their fees and nothing happens quickly. When you are searching be careful to identify the correct song and songwriter since songs often have the same or similar titles.

Once you have identified the owner of the song, the next step is a letter of intent. This letter must be sent at least 30 days before you start distributing the recording (even if you are giving it away free). The letter must be a physical paper copy sent by registered or certified mail.

 

The letter of intent does not have to be written by an entertainment attorney, but it must include this information:

● A clear subject line or title that specifically says “Notice of Intention to Obtain a Compulsory License for Making and Distributing Phonorecords“

● Your full legal name

● All fictitious/assumed names (This would be your stage name or your band name.)

● The names of each individual owning a 25% interest or more in the distribution of the song (This is a usually a list of the band members, unless any member owns less than a 25% partnership in the band.)

● The bands fiscal year (Most often this is January 1st – December 31st)

● The bands full physical office address (P.O. boxes are not acceptable, unless that is the only option for addresses in your geographic region)

● The title of the song

● The name(s) of the author(s) of that song

● The type of configuration expecting to be made (For Example: CDs, vinyl, MP3s; a music file distributed over the Internet is called a “Digital Phonorecord Delivery” or DPD)

● The expected first date of distribution

● The name of the performer/band doing the cover

● Your signature

If there is more than one publisher, it is acceptable to send a letter to only one of them unless they are out of the country. If any of the copyright holders are from out of the United States, it is wise to send letters to all of the publishers.

You should hear back from the publisher in a reasonable amount of time (most often, less than a month). There will be some publishers who do not bother to respond because you have permission as soon as you send the letter. Other publishers will require you to provide more information, a copy of the proposed recording, or to fill out more forms. Many publishers will simply send you a form letter acknowledging your license. Essentially, you should work within their system, but they cannot refuse your request because the license is compulsory. Technically you have permission to distribute the recording as soon as you send the letter (assuming you identified the correct publisher and address). Once in a while your letter will be returned to you. In that case, start over with your search and try to track down the correct information for the publisher.

 

How much does it cost?

Mechanical license fees are governed by Federal Law (in the United States). These fees are called the Statutory Mechanical Royalty Rate. The rates have two tiers of fees: one for songs under 5 minutes and another for songs over 5 minutes. Songs under 5 minutes are charged 9.1¢ per song for each unit distributed. The rate for songs over 5 minutes is 1.75¢ for each minute of the song, rounding up to the next minute per song for each unit recorded. So, a song that is 5 minutes or less long would be charged 9.1¢; songs that are 5-6 minutes are 10.5¢ (6 minutes x 1.75); 6 to 7 minutes long is 12.25¢ (7 minutes x 1.75¢) etc. This fee is for each CD or download that is distributed.

So, if a band records a 10 song CD in which all the songs are cover tunes under 5 minutes long, they would be required to pay 91¢ for each CD or download they distribute (or give away free). If they give away 100 CD’s and/or downloads their royalty fees would be $91, 1,000 CD’s or downloads would be $910. The cost of recording and manufacturing the CD’s and downloads is in addition to the royalty fees.

Royalty fees can be negotiated down and even waived entirely by the songwriter/publisher. The Federal Statutory Mechanical Royalty Rate is the ceiling on how much can be charged, it is also the standard for what is charged, but it is not a requirement to charge that much.

 

How do you pay the royalties?

Regardless of how high the publisher sets the royalty rate, you are required to them a statement every month which shows how many times you distributed the song with a payment for those royalties. A few publishers might bill you or have forms of their own that you must use. But, most of the time, it is up to you to generate the forms and mail them in on time. Publishers do have the right to charge late fees and interest on late payments.

 

The monthly statement must include:

● A clear title that says “Monthly Statement of Account Under Compulsory License for Making and Distributing Phonorecords”

● The period (month and year) covered by the statement

● Your full legal name

● All fictitious/assumed names (This would be your stage name or your band name.)

● The names of each individual owning a 25% interest or more in the distribution of the song  (This is a usually a list of the band members, unless any member owns less than a 25% partnership in the band.)

The bands full physical office address (P.O. boxes are not acceptable, unless that is the only option for addresses in your geographic region)

● The title of the song

● Name(s) of the author(s) of that song

● The name of the performer or band doing the cover

● The playing time (length) of your recording of the song (For Example: 4:25 would be 4 minutes and 25 seconds)

● The number of DPDs made (How many times your recording was downloaded)

● The number of DPDs that were never delivered due to a failed transmission

● The number of DPDs that were retransmitted in order to complete or replace an incomplete or failed delivery

● The total royalty payable (number of total CD’s and DPDs, not counting ones never delivered multiplied by the statutory or agreed upon royalty rate)

● The following statement: “I certify that I have examined this Monthly Statement of Account and that all statements of fact contained herein are true, complete, and correct to the best of my knowledge, information, and belief, and are made in good faith”

● Your signature

Some publishers will allow you to pay them directly while others only work through licensing services such as the Harry Fox Agency or Limelight. You should find out how to pay them as part of your initial publisher search.

At the end of each year, you must also send an Annual Statement of Account, which is identical to the Monthly Statements except that it includes every month of the previous year and it must be certified by a licensed CPA (certified public accountant). To save on accounting fees, you can create the statement yourself but it must be brought to a CPA to check and certify before you send it to the publisher.

 

Should your Christian band record cover tunes?

As you can see from the above information, recording cover tunes requires more work and money than recording your own songs. Most Christian musicians have extremely limited amounts of both time and money. Additionally, recording cover tunes can be detrimental because most people want to hear the songs they know done in the way they also already know. Your recording will always be compared to the most popular recording. So, if your recording of their favorite cover does not sound exactly like they know it, they assume your version is wrong. This mindset leads them to believe that your band is not very good. As musicians we know that this way of looking at covers is not true or good. But most of our audiences are not made up of musicians. They generally like what they already know, without changes.

I personally recommend that Christian bands perform cover tunes live but do not record them. Use covers at live shows to attract the audience and keep them interested by giving them familiar music. Sprinkle your originals throughout the set. Record only your originals to build your bands following. In this age of singles, it is no longer necessary to release a full CD ASAP. Save your money and do an absolutely incredible job on one original single, release that and then repeat the process. After you have 10 or so really great singles, release a full CD.

No Stealing Cover tunes

Don’t Steal Songs

If you do decide to record and distribute cover tunes, do it legally. When we record covers but do not pay royalties, we are stealing from the songwriters. We would not want to be treated this way if we were the songwriter. Furthermore, God requires us to obey the law of our land—we do not receive all of His blessings when we are not obedient. Let’s demonstrate our love for God and for people by paying royalties where they are due.

CLICK HERE for more information about performing cover tunes.

 

Should your Christian band give away FREE music downloads?

Play_ButtonFor most bands the answer to this question will at some point be “Yes”. But, that answer is not the best answer for every band all the time. To make the wisest decision about giving away free music downloads we need a better understanding of how “free” works and how it affects our ministry.

 

What is the Economics of FREE?

Lately we have been hearing more and more about “the economics of free”, especially in reference to music. Chris Anderson made the term “the economics of free” famous in his article in February of 2008 in Wired magazine, Free: Why $0.00 is the Future of Business. He followed up the article with his books “Free: The Future of a Radical Price” and “Free: How Today’s Smartest Businesses Profit by Giving Something for Nothing“. Followed by another article in the Wall Street Journal called The Economics of Giving it Away. These are all very interesting reads for those of us who like to understand the big picture of how technology is changing the economy and even how we view economics.

For the rest of us: the basic premise is that every industry that becomes digital eventually becomes free. We have already seen examples of this in music and book sales with album sales changing to free downloads and physical books changing to free e-books. Years ago, almost every industry including the creative arts made money by selling physical products for a higher price than what it cost to create those products. The challenge now is how to create new products and business models that allow us to make a profit from free. This challenge sounds impossible because we tend to still think using the old business model of selling physical product, but profiting from free can and is currently being done. First, we must change the way we look at how to make money.

 

Free and Music Ministry

The economics of free affects Christian musicians both more and less than secular musicians. All musicians have lost income from music sales. This has particularly hit the record labels hard, resulting in them signing fewer new artists, giving less tour support and taking a bigger chunk of the artists’ income from other sources in their effort to stay afloat.

Historically, Christian musicians have experienced quite a bit more of the economics of free because we have always been expected to give away more products and services than our secular counterparts. We have been expected to fund our own music ministry by donating our time and our services, paying our own gas money, equipment purchases and repairs etc. Fans expect free (or at least extremely low priced) concerts because it is considered to be a ministry, like church. But, people donate money to churches and not to Christian bands. Churches expect free musicians and concerts because they are a nonprofit organization that is funded from donations and use volunteers extensively. Even a national act is not able to charge as much as they could if they were a secular band. Then, concert goers expect free merchandise from the band as further ministry to them. Typically, Christian musicians have sold fewer CD’s than secular musicians because the market within each music genre is smaller. So, losing music sales to free digital downloads affected us because we had so little income in the first place. Christian musicians have struggled for years with how to fund their ministry within the church economy of free.

 

So, how do we survive and thrive in the new economics of free?

Not everything can be free.

Yes, that statement is overly simplistic but it is also very true. Generally, musicians are not money oriented people. In our hearts, we constantly wrestle between giving away everything from our ministry and struggling to pay the bills. We would give it all away for free if we could. Still, we must be able to make money on something in order to continue to do our ministry.

 

The trick is to have the right products available for free
or for sale at the right price and at the right time.

 

What should be free and what should be for sale?

Bobby Owsinski (in his book “Music 4.0: A Survival Guide for Making Music in the Internet Age (Music Pro Guides)“) says that there are 2 kinds of products: infinite and scarce. In our application, infinite products are readily available to the public, easy and inexpensive to duplicate and share, and out of our control to limit. Scarce products have limited availability to the public, are difficult or too expensive to duplicate and share, and we have the ability to limit the product. Most often scarce products are highly personalized, which makes them even more valuable.

By using these guidelines we can determine that, especially for those of us with a younger target audience, digital downloads are an infinite product and autographed band t-shirts are an example of a scarce product.

We can apply this way of grouping products to everything the band produces including: videos, recorded music, live music, website content, t-shirts, stickers, photographs etc. We can then use this grouping to determine which of our products should be free and which should be for sale. Notice that the groups are not determined by how much the product originally costs to create but by how our target audience is using them.

 

Making a Profit from Infinite/Free Products

Infinite products should generally be given away Free as part of a marketing plan. We are not saying infinite products should be given away haphazardly or because it is easier than fighting pirating. What we are saying is don’t bother to fight what you cannot control—instead, use it and even encourage it to get your message out and market your other products. When you give something away free, do it in a big way, as loud as possible too reach as many people as possible. Use “free” to increase your fan base.

For example: What do you think might happen if you gave your best song away free and then encouraged your fans to share it with other people by rewarding them with another free song? What if the second free song is only available exclusively to fans who shared the first song with 10 other people? I’ll bet your fan base would increase and the amount of live shows you are able to book would also increase. Then, if you sang the exclusive song at gigs and explained that it is only available to fans who share the first song, your fan base would increase again because everyone wants to be part of your exclusive group.

 

Free products make scarce products more valuable if they are used to make your bands brand more popular.

 

For example, which is more valuable: a limited boxed set edition of the directors cut of the Lord of the Rings trilogy signed by all the lead actors and actresses or the same type of DVD from a movie you never heard of that failed miserably at the box office? The popularity of the Lord of the Rings makes it a valuable collector’s item, the other DVD is a coaster or material for a craft project at best.

Sell scarce products such as backstage passes, limited edition boxed sets of CD’s or vinyl, signed merchandise. Base the prices on how exclusive and how personalized the product is. Of course, you must take into account the cost of producing the product when determining the price. But today’s market is based on perceived value rather than cost of production plus profit margin. So, ideally we want to take the cost of production into account before we decide if we should create a product.

For example: An indie band is considering producing a physical CD.
In the past we would have estimated how many CD’s we think we can reasonably sell (say 500) and then estimated the dollar amount we think we could get for each CD ( $10) to come up with our best guess at the total amount of income we could expect from CD sales ($5,000). If we could keep the expenses of creating the CD down to about half of the expected income ($2,500) we would probably go ahead and pay to make the CD (knowing that we had a profit margin that allowed room for overestimating the number of CD’s we could actually sell and underestimated the actual costs of recording and manufacturing the CD).

But now the same band now would probably not sell 500 CD’s. Instead we would be expected to give away free downloads even though our recording costs remained the same. Additionally, the costs of manufacturing each physical CD would probably go up because we would not be able to take advantage of bulk pricing. Should this band still produce CD’s? Maybe, if they can increase the value of each CD by making them a scarce product—limited and exclusive (like autographed by the band and sold as part of a package which includes personal access to the band through back stage passes). When the CD’s are combined with other products that do not cost the band anything but increases the exclusivity of the entire product, they can be sold for a much higher price per unit. This higher price per unit makes the entire CD project profitable. But if the band is not well known enough to be able to build in any kind of exclusive offers that people will be willing to pay extra for, it might be better to wait and focus on producing one or two songs that can be given away free as a video or digital download to build a stronger fan base before recording an entire CD.

The idea of using free as a marketing tool is to build a strong fan base so we can charge more for scarce products. But a scarce product is not valuable only because it is scarce. A scarce product is not valuable because it cost more to produce than another comparable product. A scarce product is valuable because the supply is limited AND there is a demand or desire for it. Create that demand with by marketing free products.

 

Timing is Everything

Three things are true:
the time is always right to increase your bands fan base
the time is not always right to spend money
the times will always change (hopefully growing better if we do great marketing)

So, whenever you can create a reasonable quality product at no cost and give it away free you should include that product in your bands marketing. But spending money by creating product that will be given away free must be done with wisdom, and only as you can afford it. Spending money to create a scarce product is wise, but only after good marketing has created a demand for that product.

How we spend money to create band products has changed with the economics of free because now singles are more important than full length CD’s and building band name recognition is far more important than marketing our latest CD. When we spend money to create band products has changed even more because we no longer need to record a full length CD to get a band started and create a stir. So, we do not have to invest thousands of dollars up front. The economics of free has made it possible to bootstrap our way up with a lot of marketing savvy and very little financial investment.

 

And so, should you band give away free downloads?

…it depends…

Is free part of your marketing strategy to build your bands brand and band name recognition? Then, yes.
If not, go ahead and make whatever money you can by selling your songs.

Here’s the books I referred to, click on the book you are interested in for more information from Amazon.



Financial Advice for Christian Musicians

Christian Band Financial PlanningLast week I had the opportunity to be shadowed at a gig with my husbands’ band by an amazing young woman who is considering a career in music ministry. The gig was a pretty typical youth group lock in, but it was an exciting experience for me because I got to do what I love to do: mentor someone who really wants to learn about music ministry.

The week before the show I found myself trying to decide what would be the most vital information to communicate to someone who is just starting out or thinking about starting out in music ministry. Then, it occurred to me that even people who have been in music ministry for years need to hear the same information. So often, we look back years after beginning our ministry journey and wonder what went wrong. We tend to blame the state of the music industry or the general devaluation of music ministry within the church. But, we usually do not consider that we simply did not plan for the financial stress of music ministry.

So, here it is—the most important things I can say about financial planning to anyone who is considering music ministry or is already in the ministry:

First, make sure music ministry is your calling.
Second, plan ahead so you can sustain your ministry.

 

Aspiring artists need to know before they start what those of us who have been around the block a few times learned the hard way (usually after quite a bit of pain and suffering):

• Most musicians do not make much money, except for top tier artists. There is little to no respect for music ministers except for top tier artists. Music is not seen as a legitimate career or ministry choice until you become a top tier artist.

• Top tier artists are not created overnight. Artists do not magically get discovered by the ‘right person’ or walk into an open position in a top tier band and become famous in a week. Most artists work for years on the local and regional level and only a very few ever ‘make it to the top’.

• So, the most successful music ministers are in it for the long haul and struggle financially for years.

• Nevertheless, you are a minister regardless of the level of success your band has attained or where you perform. You are expected to behave like a representative of the Gospel, an ambassador for Christ; even when you have to pay from your own pocket to do your ministry.

Music ministry is tough. Getting famous is the ‘easy’ part (‘easy’ is in quotes because we all know that becoming famous is not at all ‘easy’). Doing the work of loving people closer to Jesus regardless of what is going on in your life or your music career is much more difficult. During this process it is prudent to protect your heart from being wounded and then becoming bitter over the difficulties of ministry. A wounded heart and bitterness are your enemies’ tools for diminishing your ministry and eventually wearing you down to the point that you quit. Since your enemy has a plan to destroy your ministry, you should have a plan to succeed as well. Part of staying strong to consistently do the work of your ministry is to plan ahead financially.

Financial planning will go a long way toward easing the burden of ministry on you and your family
(and future family).

How do you survive financially in a ministry that is so difficult?

Count the Cost before you start.

If having a lot of stuff or the best stuff matters to you—don’t plan on a full time career as a Christian musician. You can make quite a bit more money consistently working a more normal job and playing music on the side. Examine your heart carefully. A high security need based on a steady paycheck and a desire to live the typical American lifestyle can be clues that you may not be called to be a full time Christian musician. Someday you might ‘make it’ as a Christian musician and be able to make a good amount of money, but most musicians do not. Can you live with serving God full time through music while not being famous or receiving a large paycheck? Remember that saying “no” is not wrong—it is an honest heart assessment that will help you determine where music fits into your life. There are many places to use your gift of music that allow you to work a normal job as well: church worship teams and bands that are hobbies are the most common examples This ‘part time’ service does not make you less of a music minister. It simply means that you do not do the work full time because, like so many who have gone before you including the apostle Paul at times, you have chosen to be a tentmaker.

If you do decide to pursue a career as a full time Christian music minister, plan ahead and do this: (and if you are already doing full time music ministry start doing this NOW if you haven’t already)

Multiple Streams of incomeCreate Income in Addition to Your Income from Music.

Doing this one thing will make the difference between sustaining a long term ministry and quitting because of the pressure and guilt from financial stress on you and your family.

Receiving income from several different places is called Multiple Streams of Income. The term is very common in the financial world and is recommended for everyone as a buffer from unexpected financial crisis. The principle is particularly important for Christian musicians to apply because we do not receive paychecks in consistent dollar amounts or at consistent times. Multiple Streams of Income is actually a Biblical principle:

“Plant your seed in the morning and keep busy all afternoon, for you don’t know if profit will come from one activity or another—or maybe both.”  Ecc. 11:6  NLT

Unfortunately because Multiple Streams of Income is a financial term, most of us feel it is best left to people who actually have money to invest. However, most Christian musicians already use the principle; we simply do not apply it well. For example: we deliver pizzas in between tours—this demonstrates 2 different streams of income (the part we do not do well is that both tour income and pizza delivery make only small amounts of money; and both require large time investments). Hopefully your band is also using multiple streams of income. Merchandise sales profits, performance fees, and receiving donations are three of the most common streams.

An important ingredient of success is
to diversify the source of the income.

 

Ideally, Christian musicians should have multiple streams of income from a variety of sources. For example:

 Making and selling merchandise at the bands merch table.

Purchasing a duplex instead of a single family home or condo; renting out one side while living in the other.

Working as a freelancer online, designing websites or formatting e-books, for example, which can be done in any location while the band is travelling. (ODesk and E-Lance are great sources to find online work).

Working as an employee for an employer who gives you time off whenever the band is on the road (pizza delivery is a good example).

None of these sources of income are reliant upon any other in order for you to be able to do the work. So, if the band is not touring and the merchandise you make is not selling you still have 3 other sources of income. But, if your only income was from items you make and sell on the bands table and the band paid you extra to be their manager you would have had 2 streams of income which could both dry up when the band is less successful.

How much time you have to spend creating the income
is also important.

 

Two more financial terms you need to know are: Passive Income and Active Income. Passive Income is money that you get without applying your time, such as interest on a bank account. Active Income is when you exchange your time for money, such as being an employee in any company. Wouldn’t it be great if we could all live exclusively off of passive income? Then we could spend our time doing whatever we want! Most people wait until retirement when they can collect their pension and social security to have that kind of freedom. Music ministry is extremely time consuming so our goal is to create as much passive income as possible to free us up to do more ministry. This is why working an active income job (exchanging hours for dollars) like delivering pizza (which is flexible but low paying) may be necessary to get us by in the short term but does not build a future in ministry. Our goal is to create income and free up our time.

Smart musicians recognize that even a little passive income will make their lives easier now and in the future. We usually think of passive income as investments that require large amounts of cash to start. Of course, if you are good at investing and you have the money to do so you should do it. But if you are good at investing you are probably already doing it. There are other kinds of income for those of us who are not so financially savvy and broke: active income that converts to passive income. We invest our time (and sometimes a little money) to create something and then automate its sales. One example of this you are already familiar with is the digital sales of music. Your band spent a little money (compared to other financial investments) and a lot of time writing and recording. Then the band sells downloads of that music with almost no extra time invested. This concept is not limited to music. Anything you can create digitally can be sold almost passively once it has been created and your sales channels are set up. E-books are a very common example of this type of income. (A word or warning: do not get caught up in the get rich quick schemes—there are so many online these days. Be careful and do your work with integrity.)

The key to surviving financially
as a Christian music minister
is to create multiple streams of income
from multiple sources and a
combination of passive income, active income
and active income that converts to passive income.

 

This combination will vary according to each person’s gifts and abilities. No two people will build or create the same income streams. Have you ever noticed or wondered why God has given you other interests and gifts in addition to music? Carefully look at all your talents and consider which ones could be utilized to help you stabilize the inconsistent income you will probably receive from music.

To give you an example of how these income streams work, here are some streams of income that Mark and I have now:

Book sales from The Christian Band Guidebook and The Christian Musicians Devotional (Marks novel, Where Virtue Triumphs, should be available near the end of June!)

Mark does house maintenance and repair for his Grandma and Mom.

Election pole worker (Elections are held on Tuesdays several times a year. The pay is usually over $100 per day for a long but fun day. Call your county elections office if you want to try this—they are usually desperate for workers).

Odd jobs: Mark has some plumbing skills and he uses our band van to help people move.

Creating merchandise: necklaces and purses—CLICK HERE to see what we do.

Affiliate Sales from this website: Yeah! This website is finally paying for itself and even makes us a tiny bit of money now and then because you have been blessing us by using our Amazon and Bluehost links (both are on the sidebar) before you make your purchases so we receive a small commission.

Notice that while some of our income sources are related, others are not. We have not invested in any of the more typical passive income (like the stock market) because we have had to bootstrap our way up with no cash reserves to invest.

Multiple streams of income do not happen overnight. It takes creativity and time to build them up and a little maintenance to keep them going. But these additional streams of income can stabilize your cash flow (the amount of money you have coming in and going out each month). You also gain some peace of mind by knowing that you can pay the bills. This peace of mind makes it much easier and less stressful to do the work of your music ministry.

The Last Piece of Advice: Do Not Go Into Debt!

No Credit Card DebtLive very conservatively. Musicians who have sporadic income cannot commit to making monthly payments. Multiple monthly payments will leave you choosing which ones to pay during the lean months. Hint: pay your utility bills and do not create credit card bills in the first place. Do not buy a more expensive car than you absolutely need and do not take on a larger amount of rent or mortgage than you absolutely have to have. Do not charge equipment and instruments. If you do not have the money for it, don’t buy it… I know, it is much easier said than done.

The next step for Mark and I is to sell our house and pay cash for our next home. Over the years I have consistently made money by purchasing run down homes and living in them while fixing them up. We now have enough equity that after the sale of this home I hope to live rent and mortgage free for the rest of my life! The price of this has been to constantly live in a construction zone and to constantly be spending money to fix up another house. The upside is that for the most part I am free to spend that money only when I have it and my required monthly payments have been very small.

I view this type of financial planning as
buying my freedom,
which gives me more time to do ministry.

However, this crazy lifestyle is not easy, and definitely not for most people. It seems like I am always working on something. Some of it is more effective than others but I am doing exactly what I was created to do and I love it!

Finally: This is sound financial advice for anyone and Christian musicians need to especially pay attention and apply these principles. But, I am not a financial advisor, accountant or attorney. This is my best advice from my own experience; it is up to you to apply it to your own situation or not.

Meet the Newest Volunteers at Christian Band Help

Have you seen Christian Band Helps new crowdfunding video on Faithlauncher.com? We are raising money for FREE Christian Musicians Devotionals and a $50 gas card for Christian Bands. What a brilliant idea!

Unfortunately that idea involved someone being on camera, which I really hate doing. But I was rescued from that dreaded fate by Taylor and Megan McCloud. This brother and sister team created the crowdfunding video for us FREE!

Volunteers at ChristianBandHelp.com

Please take a minute to pray for and thank Taylor and Megan for helping raise money to support Christian musicians.

Taylor is currently a student at Art Institute of Jacksonville in Florida studying film, he is also a musician (songwriting, drums).

Megan is in the process of recording her first full length album. She is now a licensed minister through the Assemblies of God. (Graduate of Southeastern University major in Practical Theology and minor in Children’s Ministry). You can catch her music on several internet radio stations and on her webpage – meganmccloud.com. You can also follow her on Facebook at Megan Mccloud’s Official Fan Page

Volunteers Megan and TaylorCLICK HERE to see Megan’s music video which Taylor directed.

Please help us spread the word about this fundraising effort by sharing the video Megan and Taylor made. You can see the video and the project by CLICKING HERE.

FREE Gas Cards and Christian Musicians Devotional Books

Christian Band Help has launched a new crowdfunding project with Faithlauncher.com

Check it out…

 

So, how do you get a $50 gas card and a Christian Musicians Devotional book?

Here’s what you need to qualify:

1. You must be a Christian and a musician.

2. You must be actively gigging outside of (or in addition to) your home church. The reason for this is that the gas cards are meant to help Christian bands get to their shows. (This means that if you are only on your church worship team you do not qualify. But don’t worry, there will be other projects where you will qualify.)

3. Your band or act (if you are a soloist) must have a website or page with a calendar showing upcoming gigs in the United States. (Yes, we are going to check to make sure you do have shows scheduled.)

4. For this promotion, there is a limit of one free gas card and book per act or band. Please note that of you have received a free Christian Musicians Devotional book from any other promotion you do not qualify for this promotion. But, other members of your band can qualify if they have not received a free devotional book.

5. Marie Wise is the final judge and interpreter of the rules. No arguing, no complaining allowed. (Not that any of us would do that anyway, but we are supposed to put something like that here for legal purposes.)

Here’s how it works:

Over the next few months we are going to randomly post to Facebook and/or Twitter that it’s time to e-mail marie@ChristianBandHelp.com to win a FREE $50 Gas card and Christian Musicians Devotional book. The first e-mail we receive that contains your name, physical mailing address and website or page, wins (as long as you meet the above qualifications)! Be sure to put FREE Gas Card and Christian Musicians Devotional in the subject line to avoid confusion. So, be sure you follow us on Twitter @UnLeashedArts and on Facebook/ChristianBandHelp. Please note that we will also be posting about raising funds for the project and do not e-mail us then.

We will post the winners on this website and confirm your contact info via e-mail. That’s it! There’s no forms to fill out, nothing to join. Just one simple e-mail at the right time. It truly is FREE with no strings attached. Cool huh?

The number of gas cards and Christian Musicians Devotional books that will be given away depends on how much money we raise through this crowdfunding campaign. So, of course we would love for you to help spread the word. Feel free to share our campaign with friends, family and fans. There are share buttons just below this post (this one is best to use to tell other musicians about how to win), at the bottom of the Faithlauncher project page (this one is best to use to help us raise money for the project), or you can share from our Facebook and Twitter messages.

Fine print: Books and gas cards will only be shipped to addresses within the United States of America.

UPDATE: The first winner is The Exchange! Congrats guys and keep up the good work.

The Christian Musicians Devotional is Available!

The Christian Musicians Devotional is now available in paperback and as an e-book. Click on the tab at the top of this page to celebrate with us and be the first to get your copy today!

Don’t have a Kindle? Don’t worry, there are a couple solutions:

  • There is a free app available that will allow most devices to read Kindle formatted books. A link is provided on the Christian Musicians Devotional page on this website.
  • A Nook version of the book will be available shortly.  NOW AVAILABLE
  • A PDF file of The Christian Musicians Devotional will also be available soon. NOW AVAILABLE

 

Save Money on Gas for Christian Bands

Hand Holding Gas Fuel Pump Nozzle

Touring season is here! Yeah! For most musicians this is the start of the most fun time of year. But the price of gas… ouch… that can really put a hole in our wallets. In the end, we have to accept that paying for gas is part of the cost of doing business for Christian bands. The expense must be added into our budget for each gig and tour. We do not, however, have to spend more than is necessary.

There are some specific things we can do to cut our Christian bands gas expenses:

Choose which vehicle to drive carefully

The greatest increase or decrease in most Christian bands gas costs is determined by what we drive to and from gigs. Years ago everyone wanted a bus. But for most bands buses were more about status than practicality. They can be very difficult to maneuver into the alleys and parking lots of many smaller or city venues and they almost never are easy to park at house parties. Additionally, when a bus breaks down not every mechanic can fix it. So, because of the rising costs of diesel, parts, and repairs buses have fallen out of favor with all but the largest acts.

Some bands have substituted RV’s for buses. But RV’s have some serious drawbacks. They were designed to drive for a while and then be parked for longer periods of time. So, RV’s tend to break down more frequently than buses for bands that play in a different city each night. Getting great gas mileage is not a high priority for most RV designers either. Bands can save some money by sleeping in their RV, but parking in a campground where there is electricity and water plus paying to empty the septic system can offset the savings. RV’s are still fairly difficult to maneuver into the load in area of many venues and they difficult to secure, so they are targets for thieves. Additionally, RV’s are not designed to haul the weight or the size of band gear. If your band travels with a sound system you will need a trailer, which puts more strain on the engine and decreases gas mileage.

Now most bands prefer to use larger vans coupled with a trailer when needed. My husbands band found that a 15 passenger van with the back 2 seats removed and a 12’ trailer suited our needs best. If we packed carefully we could do without the trailer for gigs that did not require us to bring sound or lights. Shows that required more equipment or longer tours required the trailer. The van is relatively easy to maneuver, park, and secure. The gas mileage on the van is not great but it was the most cost efficient option for us.

Some bands choose to drive multiple vehicles. Usually, this choice is made because the band cannot afford to purchase a van so everyone drives their own vehicles separately to the gig. Most of the time band members are not reimbursed for their gas. If you have to start out this way, do whatever it takes, but understand that this is very expensive in both gas and vehicle maintenance. Serious musicians who want to play in a band should consider purchasing a van as soon as possible. In the case of my husband’s band, I purchased a 15 passenger van personally, which I then drove as my personal vehicle. Whenever the band needed the van they paid for the gas and from time to time contributed money towards repairs. When I needed to drive longer distances without the band, one of the members traded me their car for the van. It would have been more ideal if the band could have purchased the van themselves, but most Christian bands simply cannot afford to do so.

Drive Less

OK, so we can’t exactly ride our bicycles to gigs to save money on gas. We have to drive to shows and to tour. But the #1 way we can decrease the amount of miles we drive is to not get lost. Know where you are going and how to get their efficiently. Use a GPS or at the very least swallow your pride and stop and ask for directions when you need to (not an hour later). Make sure the band has a correct address to the venue and confirm that the show is still on before hitting the road.

Routing your tours is critical to save gas money. In fact, tour routing can make the difference between a tour that makes money or one that costs money. Spend extra time on booking shows that make sense geographically and financially. The exposure from playing that one big prestigious show is not always worth it.

Maintain your Vehicle

We know our vehicles run better when we do this stuff: tune-ups, tire inflation and rotation, and oil changes. The trick is to actually do it. How many break downs could we have avoided if we would have taken the time to have the maintenance done (and needed repairs spotted) BEFORE we hit the road? We can save the time wasted breaking down and save money on gas by keeping our vehicles in good condition. We all agree with this, we even remind ourselves to do it as we are reading this article. But somehow this task is frequently forgotten in our busy schedules. So, stop right now and make an appointment to have the work done and them come back to finish reading.

Buy Cheaper Gas

Gasbuddy.com is your friend, but the app only works if you actually take the time to plan ahead and use it. Do not wait until the gas tank is on E before starting to look for a gas station, you will then have to buy from whichever gas station is at the next exit no matter what the price. Instead, develop the habit of starting to look for a less expensive gas station when your tank is at 1/4.

Buy gas during the week before the show. Statistically, Wednesday is the least expensive day to buy gas. But, this is not always true. Gas prices can jump up at any time. Gasbuddy has an app you can get to alert your phone when gas prices are going up in your area. Fill up when the prices are lowest, even if it is a few days before your gig.

Drive like a Grandma

Maybe that was a bad example… my Grandma had a lead foot. But you know what I mean. Slow down just a little, accelerate and stop more slowly. It does not have to be an extreme change to get better gas mileage. Remember that your band vehicle is carrying quite a bit of weight with the people and equipment. Be safe and put a few extra pennies in your pocket at the same time.

The primary reason most of us speed is because we are late. It seems like someone, often the same band member is consistently running late. So, we start the trip late and try to make up the time on the road. But, if you save even an average of $3 in gas per show and play 100 shows a year that comes to $300 (you could buy a nice bit of equipment with the savings). The person who is habitually late is not only inconsiderate but is costing the band money and is putting pressure on the driver to speed up, endangering everyone in the vehicle. Allow plenty of time to load up and confront a band member who has a lateness issue.

Carry Less Weight

A heavy vehicle burns more gas. So, lighten the load whenever possible. You do not need to take every piece of equipment the band owns to every show. Needed equipment should be discussed during the booking process. Bring what you need but try to cut back whenever possible, especially on the heaviest gear. If you are doing a longer tour and will need some heavier equipment at only a few venues, call ahead and check the cost of renting what you need upon arriving in that city. The expense of renting may be worth it especially if it means the band can leave the trailer home.

Gas is an expense your Christian band will always have. But why pay more than you have to? Cutting gas expenses consistently over a year could allow your band to play one more free show, buy some needed equipment or help pay to record your next song. Be smart, don’t throw your money away at the gas pump; keep it to further your Christian bands ministry.

Happy Easter

Happy Easter

There’s a New Page on Christian Band Help!

Gig Opportunities for Christian BandsGig Opportunities is the newest page added to ChristianBandHelp.com. You can find it next to the State and County Fairs, Christian Fests, and Christian Venues tabs across the top of this site.

This page is where we will post requests that we get for Christian musicians to play specific shows. Check it out and check back often.

We get requests every week for us to be the booking agent for Christian bands. Unfortunately, we simply cannot devote our time exclusively to one band. But we can help you do your own booking with our lists of Christian Venues, Christian Fests, State and County Fairs, and now Gig Opportunities.

Have a gig you cannot play? Ask the bookers to post their gig on our new page of Gig Opportunities. Let’s fill every show with Christian musicians!