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Unless you're in the fortunate position where you don't need to worry about breaking even, the budgeting for your recording will be one of your biggest concerns. You'll need to manage your finances carefully and know how your money's being spent, so that you can ensure the album becomes a profitable fund-raising venture for your band.
The first question to think about might be: do you need to fund the project yourself? If you've been approached by a commercial record company they'll probably pay all the costs of the recording, and might even give you some sort of fee or free copies for your time. This means you don't have to worry about finding any up-front investment, but your returns on the project might be limited.
The vast majority of amateur choir, orchestra, brass band and similar projects, however, are "private releases", whereby you cover the recording costs and sell the album direct to the public - meaning that you receive all the profits from sales of the CDs. In many cases you'll also own the "rights" to the recording so you'll receive all the profit from any future sales, broadcasting fees and so on.
Sponsorship can be a great way to fund your project. Some sponsors may be happy to donate a sum towards your recording simply in order to have their name linked with the album when it's released. You may be able to find several such sponsors, allowing you to cover a large part of your costs.
Another approach is to ask a sponsor to provide an interest-free loan to cover the initial invoices. This way they pay all the recording costs and you pay them back as sales come in. Once the loan is paid off (i.e. the project has broken even) all the profits from further sales come to you.
If you do need to find the initial investment yourself, it's important to know how much you'll need to spend. Make sure you're aware what is and isn't covered by the recording company's package. The basic components you should expect to need are:
It's worth noting that most of the prices you're quoted will exclude VAT and there may be certain hidden extras ... carriage and expenses are often dealt with in this way.
There will probably be some aspects which aren't covered by the package, for example venue hire, musicians' fees or expenses, piano hire/tuning and sales and marketing costs.
If you're comparing proposals from different companies, take time to explore the details of what they offer. For example, how much recording time is included, how many technical facilities and options will be available to you, what sort of editing and mastering facilities are included, the size and complexity of included artwork ... and at the end of the project will you have ownership of master tapes and album copyright?
Another factor is the payment terms. Check to find out when you'll be expected to pay for each stage of your project. There may be a deposit to pay in advance, so you'll need to make sure you've got access to your funds at the right time.
Once you're aware of all the costs (it's a good idea to obtain a written quotation in advance) you'll be able to set a selling price and work out how many copies you need to sell to break even. This may be the factor that ultimately helps you decide whether the project is viable for you.
Whilst most groups are able to cover their costs quite easily, it can take several months before the project goes into profit, so you need to be sure your finances can handle this. Recordings can be a highly profitable means of raising funds, but you'll need to be prepared for lots of hard work.
If you put real effort into the marketing of the album, as well as the production process, you can make sure your project achieves its full fund-raising potential. There's practical advice and ideas to help you in the following pages.
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