Being Your Own Publisher
Some of the money to be made in the songwriting business is on the publishing side. Think about it; half the money goes to publishers, why shouldn't you cash in on that at some point? Of course, there's more overhead on the publishing side, and a whole different set of hassles, but you can start small and build from there. The only certain drawback to starting a publishing company is that you won't be able to blame everything on your publisher anymore.
When to Start a Publishing CompanyUnless you want to be a publisher instead of a songwriter, don't start your company until your songwriting career is established. Even then, the less time you have to spend working as a publisher, the more time you can devote to songwriting. The ideal times to start a publishing company are when you already have publishing income or you have too much money and need to get rid of a few million dollars in a hurry. Assuming that you're not a millionaire, start your company when you've had some cuts and get a co-publishing deal, partial ownership of the publishing on your own songs.
By the time you get a co-pub deal, you'll probably know dozens of other songwriters who have co-pub and/or own a publishing company. These friends and acquaintances can be great sources of information about the pitfalls and strategies of starting your own company.
An administration deal, or “admin deal” for short, is what generally happens when you first get co-pub. At this point, you and your publisher are sharing publishing income on your songs. You need a publishing company to collect your share, but it would eat up all your profits to have an office, employees, and the other stuff that goes with a “real” company. You're in luck; your publishing company only needs to exist on paper. With an admin deal, your publisher still does the pitching, collects the money, and does most of the paperwork, then gives you your share of the net. There are a few differences between this and a staff deal; you'll owe a portion of the publisher's share on demos and have to do taxes on your company but, for the most part, it's business as usual.
PRO AffiliationThe first step is to affiliate with a PRO. Just like a songwriter, a publisher must be affiliated with a PRO. Because a publisher can only be affiliated with one PRO, if you want to be covered all ways you have to start a different publishing company to affiliate with each PRO. At first, you won't really need to do this; when the main purpose of your publishing company is to handle your co-pub, affiliate your publishing company with the same PRO that handles the songwriter's portion of the songs. If you want to handle the publishing for other people's songs or hire staff writers, then you can start another company or two.
PRO forms for publisher affiliation are pretty simple. After setting up with a PRO, you still need to incorporate your publishing company. You may have a few options here; consult with your attorney about incorporation options and how they affect tax structure and liability issues. You also need to file copyright forms reassigning any songs you own to your publishing company.
If you've never run a small business before, you're in for a major learning experience. You have a lot of different options for getting into publishing. You can test the waters, get your feet wet, or dive in headfirst. Regardless, get some professional advice from an attorney and some practical advice from people who have run publishing companies.
At first, a desk, computer, and file cabinet in your home will probably do as an office for your publishing company. It's better if these are 100 percent dedicated to your publishing company and not the same ones you use for writing. The point at which you'll need to actually get a real office is the point at which you start hiring full-time employees. Even if you only hire one person, you don't want somebody hanging out in your house forty hours a week.
Hiring HelpIt's possible (just barely) for one person to run a small publishing company by working lots of overtime and staying very focused. Of course, this means giving up all your writing time. Luckily, the person running the company doesn't have to be you. As a matter of fact, unless you're giving up being a songwriter, it
So, you need to hire someone to answer the phones, do the books, make copies, do pitches and drop-offs, and all the other things that need doing while you're staring out the window, trying to be brilliant. You need someone who believes, who's committed, who has experience — are you starting to miss your publisher yet? As a matter of fact, you might think about hiring someone from your old company, or from a publishing company you've done business with, who's ready to move up.
When to ExpandIn some ways, it's easier to run a mid-sized publishing house than a small one. If the company has only one writer (you), you're paying someone to go make drop-offs for one writer. For the same money, you could drop off stuff from several writers. Your “staff of one” may be a great plugger, but lousy at doing the books or vice versa. Adding someone with the skills your staff doesn't have can free people up to do what they do best. If you're making money hand-over-fist and you know some great writers who'd work for peanuts, it might be time to move up.
