EVERYTHING revolves around money; merchandise, payment from gigs, recording, etc. Having the right person to handle the money, even if it is not the main "band manager", is paramount to the band's long-term success.
How much of a hassle, inconvenience and not to mention, embarrassment would it be to travel to an away gig and realize that you forgot your wallet? Now, imagine if EVERYONE in the band was without money. How would you get something to eat, or fill the van with gas, or buy a new cable that you REALLY need because the old one went bad?
I've been there before, and let me tell you … it SUCKS. We were at an away show about 200 miles from home and needed to get gas, and thanks to a member who will remain nameless, the band's account was in the red. He mentioned some excuse about forgetting to deposit money from the previous gigs or something lame like that.
Here's how you prevent something like this from happening:
- Get a bank account – Do not go crazy here. Just get a simple, free checking account with a major issuer debit card (MasterCard or Visa is preferred) at a major worldwide bank. Chances are, you've got a personal account with one already, so simple open a second account. Once things progress, you can always convert it to a business account later if need be. You'll probably be tempted to add a second authorized user on the account. DO NOT DO IT. No matter how trustworthy your bandmates might be, this increases the chance of becoming a victim of fraud exponentially. Better to be safe and inconvenienced every once in a while while ripped off of your band's savings.
- Learn where your money is going – When you get an account, immediately sign up at Mint. It's free, and works with practice ANY bank that offers online banking. Mint will allow you to see a very accurate breakdown of where your money is going. You can set alerts, and set and track budgets with it. It's a great tool for when there is a specific financial goal in mind (like buying a band vehicle or saving for that session at the huge LA studio).
- Everyone gets paid at every gig, but the band gets paid first – No one likes to work for free, even if you're doing something you enjoy. Personally, I believe that it's a huge morale booster to get SOMETHING in the way of cash after every show (free beer only goes so far). However, there's a better way for everyone than simply splitting the door take X number of ways. There are always a certain amount of expenses (both personal and band) that come with playing a show. Make sure you can cover the band expenses FIRST. This might be gas, flyers, hotel room (at some point, I'll touch on how to minimize this huge expense). ALWAYS make sure these costs are covered before anyone gets paid. Next, take what's left (and you may not always have anything left if you're just starting out. That's okay for now), and divide it evenly between the band members, plus 2 extra. So, if you have 4 members, divide the reminder 6 ways, and give each person their share. The 5th and 6th shares goes back into the band fund. Now, this is not going to make anyone in the band rich off the bat. However, it will put a little green in their pocket at the end of a great show, and better yet, put more back into the band's fund for future endeavors. This is something I've personally done, and it usually makes everyone happy.
- The only time the band should pay for gear is at recording time , and it should ONLY be disposables (strings, heads, etc.). Unless you've got a killer endorsement deal, each person should be responsible for their own instrument. If you do a crazy amount of coke and then smash your Les Paul on stage, I hope you have a couple of grand laying around to buy a new ax. An instrument should be a personal investment of the person playing it, both emotionally and financially.
Your first question when making a purchase should be "How is this going to make the band money?" – I see bands ALL THE TIME spend hundreds of dollars on drinks at a bar, throwing parties for their friends, or booking hotel rooms WAY out of their budget, and then they wonder why they can not afford $ 200 for some t-shirts when they'll make $ 2000 off of them. Use the free bar tab that you get from playing a show, let a fan host the house party, and if you MUST get a hotel, make it the Motel 6. If you can not immediately pinpoint how spending a dollar is going to earn you money several times over, I would think long and hard about spending it, and in the end, 99.999% of the time, I will not. It would not be anything to have a $ 200 bar tab for a heavy-drinking band. Instead, you can invest that money in t-shirts that you can easily make 10x your investment back. It seems like an easy choice, right? Learn to manage your money, and you'll be doing better than 99% of the bands out there already. In the music industry, money brings power.