Start-up bands--and, let's be honest, those that have been in business for many years, too--are often short of dough. When you start out, you either get mom to loan you her credit card, or you roll pennies for enough money to put gas in the tank to get the van with the gear to the gig. We've all been there.
Most band members will own their own instruments coming into the band, and in a basic rock band, most will likely own their own amps, too. When it gets into mics and mic stands, cables, a PA (or two or three), speakers, monitors, light arrays, and a bigger van to haul it all in, the question of who pays for and owns what can get dicey. Or the logistics might roll along smoothly while everyone is getting along--until there's an issue, and then it becomes, well, and issue.
Conversation and clarity before it all becomes an issue is critical. If your band has chosen to form as a legal entity like an LLC, you might open a band bank account, get a band credit card, appoint someone as the band bookkeeper, and buy equipment that is owned by this separate legal creature that is the band. You might agree to pay off all bills from gig revenue before paying any band members.
A helpful strategy is to put a certain, set percentage of revenue into the band fund before paying anyone out. This is the savings account for your band, that you can draw from to make an equipment purchase or pay for transportation and hotels to an unpaid distant gig that everyone agrees is good exposure and promotion for the band.
What is critically important, however, is to decide how spending decisions will be made, and who is authorized to write checks or use the band credit card. Another critical point of discussion is who owns what. If the band decides to use band funds to buy Freddie a new guitar because her pickups on the old one are totally shot to hell--does the guitar belong to the band, or to Freddie? This will depend in part on the operating or partnership agreement if you have a formal entity--and if you don't have a formal entity, it's something you better be real clear about it before Freddie says thanks guys, and by the way, I'm moving across the country, this guitar will be a sweet reminder of our time together.
Disagreements over money end more marriages, friendships and bands than anyone can count. People have a lot of emotional baggage tied up with money; money is how we keep score and measure our self-worth. A perception that other people are making money decisions and excluding you, or a perception that one person gets to make all the artistic decisions because he is also bankrolling the equipment purchases, can dampen or destroy the bonds that bring a band alive. Frank, businesslike conversations about who owns and pays for what--with the fruits of those conversations written down in a band record notebook so that everyone remembers what the conversation was six months later--may seem incredibly unsexy and boring, but it will keep relationships clear and clean, freeing you up to sink your emotional energy into playing your heart out.
Most band members will own their own instruments coming into the band, and in a basic rock band, most will likely own their own amps, too. When it gets into mics and mic stands, cables, a PA (or two or three), speakers, monitors, light arrays, and a bigger van to haul it all in, the question of who pays for and owns what can get dicey. Or the logistics might roll along smoothly while everyone is getting along--until there's an issue, and then it becomes, well, and issue.
Conversation and clarity before it all becomes an issue is critical. If your band has chosen to form as a legal entity like an LLC, you might open a band bank account, get a band credit card, appoint someone as the band bookkeeper, and buy equipment that is owned by this separate legal creature that is the band. You might agree to pay off all bills from gig revenue before paying any band members.
A helpful strategy is to put a certain, set percentage of revenue into the band fund before paying anyone out. This is the savings account for your band, that you can draw from to make an equipment purchase or pay for transportation and hotels to an unpaid distant gig that everyone agrees is good exposure and promotion for the band.
What is critically important, however, is to decide how spending decisions will be made, and who is authorized to write checks or use the band credit card. Another critical point of discussion is who owns what. If the band decides to use band funds to buy Freddie a new guitar because her pickups on the old one are totally shot to hell--does the guitar belong to the band, or to Freddie? This will depend in part on the operating or partnership agreement if you have a formal entity--and if you don't have a formal entity, it's something you better be real clear about it before Freddie says thanks guys, and by the way, I'm moving across the country, this guitar will be a sweet reminder of our time together.
Disagreements over money end more marriages, friendships and bands than anyone can count. People have a lot of emotional baggage tied up with money; money is how we keep score and measure our self-worth. A perception that other people are making money decisions and excluding you, or a perception that one person gets to make all the artistic decisions because he is also bankrolling the equipment purchases, can dampen or destroy the bonds that bring a band alive. Frank, businesslike conversations about who owns and pays for what--with the fruits of those conversations written down in a band record notebook so that everyone remembers what the conversation was six months later--may seem incredibly unsexy and boring, but it will keep relationships clear and clean, freeing you up to sink your emotional energy into playing your heart out.
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