You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your jingle company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a jingle company?
Frequent communication is essential, so providing clients with a number of channels to accommodate their personal preferences, such as telephone, text, and email is important. You’ll also need a powerful computer with enough storage space for large files and dependable internet access. Many invest in relevant software programs as well. As an alternative to renting a sound studio with equipment, you can purchase sound mixing equipment, musical instruments and microphones and create a music studio in your home. Depending on the price of real estate where you live, the savings can be substantial.
What are the ongoing expenses for a jingle company?
Ongoing expenses include utilities, equipment maintenance, and salaries for freelance musicians, sound engineers, and singers. (Many larger companies require the use of union workers.) Since calculating fees and royalties can be complex, having a good tax accountant on retainer is a wise investment as well.
Who is the target market?
Preferred clients are individuals or companies who wish to purchase original music, usually for promotional purposes.
How does a jingle company make money?
Depending on the terms of the contract, jingle company owners can make money by earning royalties on original music that is used on television shows or during other theatrical performances. The amount of the royalties depends on factors such as the length of the piece and how it is used. Some writers share their royalties with publishing companies, while others publish their own work. Works can also be sold for a one-time fee. This method is most typical with lesser known jingle writers, as the hiring agencies usually have more leverage.
How much can you charge customers?
Professional jingle writers have been known to earn over $20,000 for writing and arranging a single project. How much you can charge depends largely on the size of your client’s budget, your reputation as a jingle writer, how the music will be used, and how often. Earned royalties can be substantial over time. However, most new jingle company owners charge very little and even provide free demos of their work until they have a substantial list of credits. $500 to $1500 is considered a reasonable fee for an original song for a commercial. The fee for writing a simple jingle for a small company website can be as little as $250.
How much profit can a jingle company make?
Musical composers make an average of $44,000 per year, while writers make an average of $60,000. Jingle writers usually combine both talents and work closely with advertising agencies. Digital advertising for smartphones has become a lucrative new market. In 2011, one digital advertising company sold for $62.5 million.
How can you make your business more profitable?
Registering your work with the copyright office can make your business more profitable by giving you legal recourse in the event that there is any unauthorized use of your work. In addition to television commercials, movies, and radio ads, there are other types of businesses that require original music—the composition of which is a skill most jingle writers have. One example is the video game industry. Most video games have musical accompaniment or a soundtrack. Smartphone companies also offer hundreds of musical ringtones, many of which have become wildly popular. Even small businesses that can’t afford to purchase television or radio ads can have the benefit of an original jingle on their websites to help build their unique brand. In this business, increasing the success of others increases your own as well.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your jingle company is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a jingle company. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In particular, may require jingle companies to obtain a seller’s permit. A seller’s permit enables states to record and collect taxes from goods (and sometimes service) sales.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources
Jingle companies should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership (who will ultimately own the composition--usually the company producing the ad). Here is an example of one such services agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your jingle company when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Jingle writers will need to register with a PRO, such as ASCAP or BMI, to ensure their music is copywritten, and to ensure payment will be properly disbursed.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a jingle company
Many new jingle company owners make connections with creative directors and producers at advertising agencies. Providing samples of your work to various music production companies can also generate more business as well as help make valuable connections with potential future collaborators.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Attracting customers requires gaining a thorough understanding of their needs and demonstrating your ability to meet them. Asking the right questions, such as whether there is a particular song that is similar to what they are looking for or a particular artist’s style that they prefer, is a great form of active listening. Retaining customers requires being flexible enough to make whatever changes are necessary throughout the collaborative process to ensure their complete satisfaction.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Jingle Company In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
This business is ideal for musically creative people who enjoy using their talents to promote business ventures.
What happens during a typical day at a jingle company?
The daily activities of a jingle company owner are varied and can include:
- Musical composition and lyric writing
- Networking with industry professionals
- Brainstorming and project collaboration
- Interviewing musicians, composers, and sound studio personnel
- Contract negotiations
- Obtaining a copyright for original musical works
What are some skills and experiences that will help you build a successful jingle company?
Some of the skills it is most important to have in this business include:
- The ability to read music and play an instrument
- Extensive knowledge of music history for reference
- Sound studio experience to mix and enhance music
- Effective listening and communication skills for understanding the specific needs of clients
- Negotiation skills for creating contracts
- Knowledge of copyrighting and licensing requirements
What is the growth potential for a jingle company?
The growth potential for a jingle company varies according to the size of the team. Some have composers and musicians on retainer to be better able to meet multiple deadlines for multiple clients simultaneously.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a jingle company?
Industry experts suggest providing advertising agencies with a wide variety of musical styles to choose from to increase your chances of landing a contract. That means collaborating with a number of freelancers with different styles and talents. Conducting research on the history and the needs of potential clients is crucial, especially for preparing relevant short demos for their consideration. The importance of persistence cannot be overstated since this is a highly competitive business and it takes time to build a following.
How and when to build a team
This business can typically be started with one member. If you find it manageable to handle the creative process (including the writing and performing and recording of all instrumental parts), the marketing, and the client interaction, then a team may not be necessary just yet.
It may, however, be important to build a team even before beginning the business. There are a lot of moving parts in such a business and having dedicated members to help with the process can ensure your focus is on the parts that matter most. Initial team members might include professional organizations such as ASCAP, (American Society of Composers, Authors, and Publishers) and BMI. Professional unions like SAG (Screen Actors Guild), AFTRA (American Federation of Television and Radio Artists, and AFM, (American Federation of Musicians) can be great sources for locating talent for projects. They also help ensure fair compensation.