The 3 Main Categories of Start-up Costs:
Branding, Legal, and Subscriptions

To keep things simple, I’ve grouped the expenses into three categories:

1. Branding: $500

2. Legal: $1,350

3. Subscriptions: $800

Total: $2,650

Now, let me explain each category in more detail and offer suggestions on where you can save money, if needed.

1. Branding/Logo – $500

Your branding is the first impression people have of your label. It includes your name, logo, and overall visual identity. This is something you definitely need, but the price can vary depending on where you get it done.

How did I get to $500?
I recommend hiring a graphic designer from Fiverr or a local artist to create a simple, black-and-white logo with multiple file formats. This should also include social media banners and profile images. While you can find cheaper options, $500 will get you something professional that will last for years and be used across various platforms—album covers, merchandise, your website, and social media.

Can you save here?
Yes, you can design it yourself or ask a friend. However, a good logo is worth the investment and helps make your label look professional from day one.

2. Legal Costs – $1,350

Legal expenses are essential for setting up your business correctly and protecting your assets. There are two primary legal costs for starting a label in the U.S.:

1. LLC (Limited Liability Company)

2. Artist contract template

How did I get to $1,350?

• LLC: The cost of setting up an LLC varies by state, with California being one of the most expensive at $800. I’ve averaged it at $1,000, which also includes hiring a lawyer to handle the paperwork and ensure everything is set up correctly.

• Artist contract template: Hiring a music lawyer to draft a basic artist contract costs around $350. This contract will be reusable, and you can simply modify the artist's name and details as needed.

Can you save here?
In the U.S., an LLC protects your personal assets, so I think it’s worth the investment. If you live outside the U.S., your legal setup might be simpler and cheaper. Regarding contracts, you could find templates online, but I recommend getting one written by a professional for peace of mind.

3. Subscriptions – $800

There are several online tools and subscriptions that will make your life easier as a label owner. These include digital distribution services, website hosting, and marketing tools.

How did I get to $800?

• Bandcamp for Labels: $250/year

• Website: $250/year for a simple website using a platform like Squarespace (including domain hosting).

• Digital distribution: Around $200/year to get your music on platforms like Spotify and Apple Music.

• Miscellaneous: Another $100 for services like SmartLinks, Dropbox, or other marketing tools.

Can you save here?
Yes, you can! You don’t need to start with a paid Bandcamp subscription, and you can use free website options like a Bandcamp page or Linktree. But digital distribution is non-negotiable if you want your music on streaming platforms.

But wait…is $2,650 Enough?

While I’ve focused on keeping costs low, I believe that $2,650 is a modest but realistic investment to start a record label. If you can’t afford to invest that amount, you might want to reconsider how serious you are about this venture. Spending on branding, legal protection, and tools that make your life easier will help elevate your label above the competition.

Remember, these costs don’t include making records, which is a whole other expense. If you want to release physical products like vinyl, you’re looking at another $2,500 to press your first 200 records.

For those going all-in with vinyl, some labels budget around $13,000 for their first year, which includes four vinyl releases and the initial $2,650 in start-up costs. But if you’re starting as a digital-only label, you’re ready to go with just this initial budget.