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Band debt, accounting and taking on new members???


cngracin

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Personally I would try to find a way to "close the books" on Band Incarnation A, for a bunch of reasons.

 

What's the cash-flow outlook moving forward? eg are y'all actually generating net cash at this point?

 

Can you finish your album without much/any involvement from the new band member?

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Well, this is why I stopped working with bandmates: money can rip people apart. I was at the point where I was the songwriter, arranger, producer, engineer, manager, AND I was paying for almost everything. I kicked everyone out and my original music is taking off.

 

Being in an original band takes money, and it sounds like you and your band have your heads on right. You have, essentially, a contract.

 

I understand your trepidation, though. Bringing up financial aspects WILL turn a lot of people off.

 

But, it'll be far worse if you start bringing a new guy in, and then you have this awkward talk further down the line about money. You could end up wasting a great deal of time.

 

You're a financially-responsible band, which is rare and very good. Anyone who joins your band needs to be of the same mentality, or you'll end up with a disaster. Be up front with anyone you bring in.

 

I suggest doing it this way:

 

Hold your auditions, then narrow it down to a few guys you like. Then, have an honest talk with each of them (one on one), where you discuss the financial aspects.

 

And BTW, how on earth are you guys thousands of dollars in the hole? What are you spending your money on?

 

Good luck! :thu:

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If your band from the start, was sharing the finacial load, it was doomed from the start. I mean, how many original bands keep all the members from the get-go.....not many. Im not seeing anybody paying you to join your original group since its just starting. Find a way to tack up the loss as just that. Restart the group with new rules. If you want this group to make a living at it......you need a great plan of attack.

 

Thinking of the band member that left...........I guess alot of the direction depends on how much loss he has left the other members with. Are we talking tens of thousands or a few hundred?

 

The group we started a year ago....I purshased all the sound equipment. Just for the reason I didn,t want someone leaving and then taking 1/4 of the equipment. It was a big investment for my wife and I. I look at it as a long term ivestment. If it lasts 10-15 years, its paid for and I get enjoyment out of it.

 

Right now from the info posted........I'd find a new member, pay him/her per gig......at a set rate while the others continue with the load.......if the load cant be handled, then other options need be addressed.

 

Your only about 1 hr from where I live.........small world.

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Existing band members assume all current debt equally.

New guy comes in, he gets his 1/4 cut of any live gig money, but no proceeds from any album sales until the existing debt is paid off.

He does NOT take on ANY of your existing debt, only takes on 1/4 of any new debt/expenses.

 

Does that suck for you?

Yep, but it's right/fair/the only likely way you're going to get anybody new to join.

Reality isn't easy.

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Ouch! It sonds like you started with the wrong financial principles, and took on way more expense than you could reasonably afford in light of the possibility of someone quitting the group. Well, that's the past - now to move on...

 

If everyone who is left is still pretty committed to the group, one workable way to handle a new guy is to tell him up front that he'll get reimbursed for his expenses in getting to gigs, but nothing above that until the existing debt is paid off. Then go equal shares, or however you decided to do it with the first player. If he wanted to buy in (and don't hold your breath for that), then he could get a proportionate share of revenue to help pay that down. But that's an "Alice In Wonderland" scenario - everything is upside down.

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And BTW, how on earth are you guys thousands of dollars in the hole? What are you spending your money on?


Good luck!
:thu:

 

One 8-song, 45-minute, professionally recorded, mixed and master studio quality album. That accounts for about 75% of what we have spent.

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Existing band members assume all current debt equally.

New guy comes in, he gets his 1/4 cut of any live gig money, but no proceeds from any album sales until the existing debt is paid off.

He does NOT take on ANY of your existing debt, only takes on 1/4 of any
new
debt/expenses.


Does that suck for you?

Yep, but it's right/fair/the only likely way you're going to get anybody new to join.

Reality isn't easy.

 

 

What he said. In every detail.

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If your band from the start, was sharing the finacial load, it was doomed from the start. I mean, how many original bands keep all the members from the get-go.....not many. Im not seeing anybody paying you to join your original group since its just starting. Find a way to tack up the loss as just that. Restart the group with new rules. If you want this group to make a living at it......you need a great plan of attack.


Thinking of the band member that left...........I guess alot of the direction depends on how much loss he has left the other members with. Are we talking tens of thousands or a few hundred?


The group we started a year ago....I purshased all the sound equipment. Just for the reason I didn,t want someone leaving and then taking 1/4 of the equipment. It was a big investment for my wife and I. I look at it as a long term ivestment. If it lasts 10-15 years, its paid for and I get enjoyment out of it.


Right now from the info posted........I'd find a new member, pay him/her per gig......at a set rate while the others continue with the load.......if the load cant be handled, then other options need be addressed.


Your only about 1 hr from where I live.........small world.

 

 

Howdy neighbor! :wave:

 

I probably should have been more clear using the word

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Existing band members assume all current debt equally.

New guy comes in, he gets his 1/4 cut of any live gig money, but no proceeds from any album sales until the existing debt is paid off.

He does NOT take on ANY of your existing debt, only takes on 1/4 of any
new
debt/expenses.


Does that suck for you?

Yep, but it's right/fair/the only likely way you're going to get anybody new to join.

Reality isn't easy.

 

 

Far simpler than anything I have come up with so far, and it sounds reasonable for the most part.

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Far simpler than anything I have come up with so far, and it sounds reasonable for the most part.

 

 

I'd be interested in what you find about it that isn't reasonable.

 

IMO, asking a new member to assume ANY of the debt you've incurred thus far in any way, or to accept ZERO income potential moving forward until that debt is paid off, is what's unreasonable.

Sure, I get your comment about a truly business accounting scenario and buy-in to that debt, however I think you have to agree that that's an unlikely solution even in the 'real' business world.

 

You propose that to me, and no matter how hot {censored} I think your band is, no matter how great a fit I think I'd be for what you have planned or how much I want to play with you, the first thing out of my mouth would be "Fine, I'll assume my share of that debt, just show me the financials that go along with the solid business plan you've developed that shows me your exact airtight projections for when, and at what rate, the profits will kick in".

You want to act 'real business' in this, you have to put up on your end of things as well.

 

Actually that's not true...the first thing out of my mouth would be 'f*$k off', just like you expect.

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Offer the guy 2 plans.

 

1) Pay him his quarter and then, with what's left work out a way to disolve the debt of the three of you. Under this plan the new guy would receive NO proceeds from the album that was finished before he even joined up with you.

 

2) He joins in the effort to pay off the debt but then gets to share in the proceeds from the album even though he had nothing to do with it's creation.

 

He'll make his decision based on how much faith he has in the band's future revenue stream.

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I'd be interested in what you find about it that
isn't
reasonable.


IMO, asking a new member to assume ANY of the debt you've incurred thus far in any way, or to accept ZERO income potential moving forward until that debt is paid off, is what's unreasonable.

Sure, I get your comment about a truly business accounting scenario and buy-in to that debt, however I think you have to agree that that's an unlikely solution even in the 'real' business world.


You propose that to me, and no matter how hot {censored} I think your band is, no matter how great a fit I think I'd be for what you have planned or how much I want to play with you, the first thing out of my mouth would be "Fine, I'll assume my share of that debt, just show me the financials that go along with the solid business plan you've developed that shows me your exact airtight projections for when, and at what rate, the profits will kick in".

You want to act 'real business' in this, you have to put up on your end of things as well.


Actually that's not true...the first thing out of my mouth would be 'f*$k off', just like you expect.

 

 

Here

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Especially, and sorry if my post came across a tad hostile. Because if I read it I would think it was. But this is an original band. By nature, it's not like he's going to be laughing his way to the bank on your dime. He'll make gas money and change on the dime of the departing member, in exchange for his time and talent.

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Kmart's suggestion is spot-on. You past debts for an already-made recording aren't a new guy's problem. Keep the live revenue and album sales seperate. If you guys decide to put show money back in to pay for the album, that's a decision you three have made.


Welcome to the wonderful world of operating in the red as an original band. I prefer to just pay up front for recording/duplication costs and then just kiss the money goodby rather than thinking about it in terms of recouping anything. Then I can at least pretend, when stuff sells and we plays show, that we're actually "making money".

 

 

YES ^

 

OP, you should also consider the option that the departing member can buyout his his share and be able to recieve any residuals from the album sales (however unlikely).. or you can apply 1/4 of album sales to the super-debted member until the balance sheet moves forward.

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Re the album, it seems to me that it is the property of the original band members, and the new guy shouldn't be involved at all, either in the debts or in any revenue stream.


Then, like I said, basically start over from today with new expenses/revenues moving forward.

 

 

Yeah, pretty much... I've been thinkin' about a way to maybe reset the balance sheet between the remaining three. If we can figure that out, it will make the going forward a lot easier.

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You kind of made a mess of things from the start, & added to the mess as you went. Undoing that is going to be hard, even if you have records of everything taken in, spent, or paid in by anybody.

 

Another option might be to organize the remaining original members as the "owners" of the band, & treat any new guys as employees (contractors actually; 1099 rather than W-2). Guarantee them a set rate, split, salary, etc. but no share of ownership in the band itself. New guys might get paid more for awhile than the original cast, but if the thing takes off (don't laugh; it happens sometimes!) the owners could come out ahead. It all depends on how much you believe in yourselves, each other, & what you're doing. It could also serve as some extra incentive for the owners to work that much harder, so that they'll start seeing some decent returns.

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