How Should a Band Manage Its Finances?
Flickr user aresauburn That's that Spotify* money you're in now.
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My question is more of a means to avoid drama and mistakes than to recover from it, so it might not be worth your time for the column, but I thought I would ask anyway. Are there any books or other resources you could recommend for a band that manages itself? Areas of particular interest are finances and booking, but since I don't know what I don't know, I'm sure any list I could present would be far from comprehensive. At age 30, we're a little old for beginners, and there aren't a lot of people doing what we're trying to do in our area that we could turn to for expertise. What are your suggestions for managing income if and when there is any? Should we start a bank account? Are there unexpected costs that we might encounter or things we should have money on hand to cover in the course of playing shows? Pessimist question: If we split the cost of equipment like a PA, should we discuss what will happen to it when the band ceases to exist?
You are a pessimist after mine own flinty heart: planning for the band's inevitable demise before you have barely played shows! If only more bands were like yours. Sigh.
You are smart to ponder these things now, though as you have figured out already, a new band's cash flow is maybe mid-double digits. "If there is any"--"if" is the optimal phrase here--and it's a big if. Right now your expenses are practice space, gas to gigs, the purchase of a PA. If you have a collectively-held band vehicle (and/or trailer) that is not just one person's ride, there is the maintenance, upkeep, insurance and Triple A. If it's one person's vehicle that is often used for band purposes, they should be reimbursed for an agreed-on share of those expenses, proportionate to use. Included in this talk/agreement: who pays parking tickets? Fender-bender damage? My opinion is whomever did it/parked it/sideswiped that Accord lays out that cash.
Anything that is collectively purchased should be collectively maintained, and if the band fails to "make it" then you sell the PA or one person buys the other shares out at fair market value as determined, by, say, comparable Craigslist postings. That said: No band I have ever been in did things that equitably--there was usually one person fronting money, being the bank/band mom and we would pay them back, or use their PA that they had from the last band where they were the band mom. These are usually the people who have the van. They are GREAT people to start a band with.
My guesstimate is you are still just at the practice space and gas-money level of expenses, which means now is a good time to have the discussion of "our" money convo. Since there is almost no money (and if there is, it's tiny) my suggestion is it defaults to gas money for whomever drove, or distribute it as it comes in, because everyone is probably putting in, what, $50-80/month one way or another towards this venture, if not more, right? Let them keep that $6 share--they've earned it! Also, don't bother with a band bank account until your band is making hundreds of bucks a gig. And maybe still not even then. Cross the bridge when you come to it.
Anyhow, yes, there is a book that explains how to self-manage your fledgling band--I wrote one!--it's probably in the YA section of your public library so go check it out.
*All money belongs to Spotify.