For many, opening and managing a venue is a dream come true. However, as with every creative endeavor, it requires as much rational planning as passion. The most important part is building a business plan for your live music venue.
It pays to take this part of the process seriously. Research by the Harvard Business Review shows that entrepreneurs with a formal plan are 16% more likely to become financially viable than those without one. Even if you have a good idea of how you’ll handle music venue management, a formal plan can be the difference between success and failure.
Fortunately, getting it done is relatively straightforward. Let’s break down the key components of a business plan for live music venues, before digging into some of the best practices you can follow to build and optimize your plan.
The 8 Core Components of Business Plans for Live Music Venues
At its most basic, a business plan for a live music venue should include these eight sections:
- An Industry Overview that outlines how your venue fits into the larger music scene within your immediate draw area
- An Executive Summary in five to 10 paragraphs that outlines your business goals, explains your business model, and describes its uniqueness compared to other venues in the area
- A Detailed Company Overview that includes your mission statement, ownership structure, the products and services you offer, and other aspects of music venue management
- A Budget Breakdown that shows your current and anticipated expenses, revenues, existing funding, and cash required to build and maintain the business
- A Team Overview that describes the roles and responsibilities of your current team and any additional team members you may need to hire
- A Comprehensive SWOT Analysis that outlines your venue’s internal strengths and weaknesses as a business, along with opportunities and threats your local environment presents
- A Sales and Marketing Strategy that outlines the channels, audiences, and budget required to bring in the performers and audiences you need to maintain and grow your venue
- A Sales Forecast that estimates your growth rate based on your sales and marketing strategy
Some business plans for live music venues expand beyond these factors. For example, you can use your plan to analyze anything from target audiences (depending on the type of venue and music genre) to pricing strategies and secondary revenue streams (such as merchandise sales). At its core, though, every plan should include these eight components.
6 Tips to Build a Plan for Your Live Music Venue Business
Time to go beyond the basics: A strong business plan is key to running your venue like a well-oiled machine, and these tips can help you get there.
1. Get Specific Anytime You Can
Business plans aren’t defined by their narrative. Though outlining your business goals and company overview is undoubtedly important, what separates good plans from great ones are the specifics.
In other words, plug in the numbers. Use data you have about your local competition, past sales, and industry projections. Even forecasts about the popularity of the types of music you plan on hosting can be helpful. When you can back up decision-making with data, you’re on the right path.
2. Cut the Fluff to Focus on the Tangibles
Speaking of specifics: the best business plans for live music venues aren’t necessarily the lengthiest. We’ve seen great documents that are only a few pages long and alternatives that are small novels. The difference is that the good ones focus on tangible data, while the mediocre ones fill out the gaps with fluff.
Every sentence, paragraph, and section of your business plan needs to be intentional. Each has a specific purpose to tell its piece of the larger story of your business. If, in your first or second review, you come across paragraphs or sections that don’t contribute to that larger story, don’t be afraid to remove them.
3. Keep the Focus on Your Core Business and Differentiator
It’s easy to get excited about managing a live venue. You want to talk about your plans for expansion, future renovations, and more. But, while these may have a place in future planning, your business plan should retain a narrow focus.
That focus should be your core business model and what makes it unique among other music venues. If your written plan can highlight that differentiation, you’re halfway there to convincing your audience about the viability of your business.
4. Know Your Audience As You Write Your Plan
Speaking of audiences, most business plans are written specifically for investors. That may also be the case for you. However, don’t underestimate the need to use it as an internal checkpoint or a way to attract potential business partners.
Each of these audiences will require slightly different versions of your plan. Investors want to see the numbers, while potential partners will be focused on your vision. When using it for internal benchmarking, be sure to focus on what you’re looking to achieve in the near and far future.
5. Stay Grounded in Reality
It can be exciting when the business plan for your live music venue comes together. However, projecting 100% annual growth in a competitive music scene may not be realistic.
Instead, all projections should be grounded in relevant data and logical arguments. Investors, in particular, will be happier with a 10% growth trajectory backed by similar growth in your area than with a 100% growth trajectory based on hunches.
6. Vet and Make Adjustments to Your Business Plan
Finally, treat your business plan as a living document. As your venue grows, the numbers will need to be updated. Your audience may change and so may your differentiators, making adjustments necessary.
But even before those adjustments, vetting your business plan may make sense. Run it by your financial advisor, current business partners, and even personal connections with experience in crafting business plans. Their feedback can be invaluable in creating a written document that maximizes your chances of financial viability and future success.
Ready to Advance From Planning to Music Venue Management?
Building your business plan can be a complex process. In the end, though, it’s about making sure that you formalize and define your vision for your music venue, making your plan more tangible and credible.
Once you’ve created the plan, it’s time to start thinking about putting it into action. That’s where a venue management platform like Prism enters the equation. To learn more about our software, schedule a demo to see how we can make managing your venue much easier.