How to Start a Record Label in 2025: The Ultimate 10-Step Guide

Learning how to start a record label gives independent artists the power to stay in control of their careers while creating opportunities for new talent.

Owning a label also helps music reach a wider audience, attract industry professionals, and gain valuable media exposure.

This guide walks you through the step-by-step process of launching your own record label, from planning and branding to recording and promoting releases.

 

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What Is A Record Label?

A record label is a company that assists in the production and release of music across niche and popular music genres.

Artists signed to record labels can reach a larger audience through distribution channels and adopt the label’s brand messaging.

Labels also often provide resources for artists to help them make music that aligns with the label’s core customer base.

 

What Does A Record Label Do?

The roles of a record label depend on the label’s size and the number of signed artists, but some consistencies remain.

Let’s break down some of the key functions record labels engage in to help music artists develop their careers:

• Music production and distribution: The primary role of the record label is to finance music production, providing experienced producers and access to professional production equipment. The label also releases music across various platforms, including both physical formats and digital ones.
• Marketing and promotional efforts: A key role of labels is marketing and promoting new music releases and their signed artists. This includes leveraging music industry connections to secure interviews and favorable coverage in the music media.
• Artist and repertoire (A&R): Some indie labels actively engage in acquiring new talent through an artist and repertoire department. These employees have a deep understanding of what music producers do and whether or not they complement the label’s style.
• Legal and business administration: A record label is also responsible for handling day-to-day business operations, such as administration and contract negotiation. Copyright issues, licensing, and other legal processes are all handled by the record label.
• Collaborations and brand partnerships: Artist development and cooperation go hand in hand, and labels utilize their industry connections to facilitate collaborative projects. They also reach out to brands that align with the artist’s image for potential partnerships and sponsorship deals.

By serving as investors and supporters of singer-songwriters and producers, labels can foster careers while generating profits.

 

Recommended read: The best music production software.

 

Benefits Of Starting An Independent Record Label

Setting up your own label is about more than just making money as a music producer or singer-songwriter.

Here are some of the many additional benefits you can enjoy if you start a record label and break into the music business:

• Retaining complete creative control: Signing a recording contract for another label sometimes means sacrificing your authenticity. With your own record label, you can keep complete creative control of your musical style and artistic vision.
• Increased share of revenue: Owning your label also ensures you keep a larger portion of revenue, whether through music royalties or ticket sales from shows. This revenue increases with the number of artists you sign to the label, delivering consistent and long-term earnings.
• Learning how the music industry works: Running a label requires close interaction with music industry professionals, which can lead to career growth. This includes dealing with local record store owners, journalists, and engineers who are vital to the recording process.
• Nurturing new and emerging talent: The level of creative freedom afforded by indie labels extends to all artists on their roster. Managing a record label and seeking artists is a hugely rewarding contribution to the scene, fostering emerging talent.

As your music label grows and signs up exciting new artists, your overall revenue and reputation will also expand.

 

How To Start A Record Label: Step-By-Step

Whether you’re drawn to a niche electronic sound or aiming for broader commercial appeal, starting a record label gives you the power to shape the music you love.

This step-by-step guide will show you how to launch a label that connects with your audience while covering the essential legal steps to operate with confidence.

 

Step 1: Research The Market

Before you can initiate the process of creating a record label, you should conduct extensive market research into your competitors.

This research can focus on various factors, including how successful independent artists promote their work and other key elements.

You can begin by researching labels that release music in your niche, whether it’s rock music or underground EDM.

This research should consider how the brand disseminates its content through online promotions across social media channels.

It can also cover broader considerations surrounding the weighing of costs associated with setting up a label as a small business.

As you conduct research, compile references and resources used by most labels to streamline their workflow for later use.

 

Step 2: Outline Your Label’s Vision

Once you’ve conducted thorough research, you can begin the process of outlining and defining a clear vision for your label.

This vision provides a framework for establishing and operating the label in both the short and long term.

Everything from your label’s core genre appeal and target audience to the values you wish to embody can be included in this vision.

Once you’re clear on this vision, you can write it up as a mission statement that can be shared with potential investors.

If you are seeking outside investment, this mission statement will sit at the core of your outreach as a unique selling proposition.

As such, it should also include a plan of action for financial growth, outlining expenditures and how you aim to drive revenue.

You can also create a vision aimed at other artists you hope to sign to your label, explaining your creative ethos.

These can then be refined and further expressed in your guidelines for new artists, which we’ll cover in more detail below.

 

Discover more: How to submit music to radio stations.

 

Step 3: Develop Your Label’s Brand

With a clear vision and understanding of where your new music fits into the industry landscape, it’s time to work on branding.

Record labels have many options when building a brand reputation in the digital age and spreading messaging worldwide.

At the heart of this messaging, however, is the necessity for a memorable record label name and associated visual identity.

Let’s explore these two core branding elements and how you can use them for a consistent and engaging presence:

 

Label Name

As with all branding, your record label name should aim to be both unique and memorable, while still being relevant to your genre.

Try to keep it relatively short and reference your research to see how other labels use wording to express their content.

As with trademarking a band name, you should apply for a trademark once you’ve settled on a name for your label.

This means verifying the label name isn’t already being used by another company, if necessary, seeking advice from an attorney.

 

Label Logo

Just as your label name should capture the spirit of your musical style, so too should the label’s logo reflect your core vision.

An effective label logo should be relatively simple, with bold use of colors and imagery that translates to different formats.

This involves reviewing designs on smartphones and as small logos on digital platforms and merchandise before finalizing.

You can design the logo using Photoshop and similar design tools, or hire a professional if you lack design skills.

 

Step 4: Outline Guidelines For New Artists

Before any additional artists are ready to sign a record deal with your label, you’ll need to outline the relevant guidelines clearly.

While labels typically don’t interfere with aspects like a song’s structure, they can request other terms for artist submissions.

These terms can include expectations on the quality of each submitted track and a baseline standard of music production requirements.

For example, labels can request that music submissions have been professionally mixed and mastered to relevant industry standards.

Beyond expectations for quality production, record labels can also establish standards surrounding existing fanbases and online reach.

This could be a minimum requirement for online social media followers or an existing presence on the major music streaming services.

 

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Step 5: Build Your Label’s Digital Footprint

With your branding in place and guidance to help new artists get signed to the label, it’s time to build your online presence.

This presence should include a high-quality professional website that provides contact information and showcases the label’s artists.

If you’re inexperienced with web design, you can reference the best label and band websites to see what content works best.

Many website builders offer drag-and-drop interfaces, eliminating the need for web development experience.

Once your site is up and running, you can then apply your branding across social media platforms, such as X, TikTok, and Instagram.

With these channels active, investigate how to go viral on TikTok and other platforms as part of your marketing initiatives.

 

Step 6: Network With Other Artists

Independent artists considering launching their own record label are likely already part of a network of like-minded artists.

Whether or not that’s the case for you, networking with other artists sits at the core of establishing and growing a record label.

This can be done in person at local gigs or by attending industry events, such as festivals, awards, and conferences.

As a label owner, you’ll also be expected to liaise with artist management when negotiating contracts and other deals.

Through a broader artist and repertoire strategy, you can follow trending artists and put your resources behind the best possible talent.

 

Step 7: Create An Album Campaign

With a core management team and artists sorted, you’re now ready to create album campaigns and other promotional efforts.

The best music producers often succeed through campaigns characterized by unique marketing of their creative identities.

Such strategies fit into a broader process, beginning with the pre-release phase and continuing through to release day and beyond.

For record labels, this includes creating electronic press kits (EPKs) and press releases to inform the media about the release date.

Additional roles include crafting advertising and social media campaigns, linking these to label offers like pre-order discounts.

Surrounding the actual release date are additional promotional efforts, including live events, interviews, and QA sessions.

 

Also read: How to get signed to a record label.

 

Step 8: Set Up Mechanical Royalties

A primary source of ongoing and passive revenue for record labels is through mechanical royalties, which pay out in various scenarios.

These scenarios range from the sale of physical media, such as CDs and vinyl records, to digital downloads and streams.

To claim mechanical royalties, labels must register works with a collection agency, such as the Mechanical Licensing Collective (MLC) in the US.

Once this has been done, the collection society will monitor, collect, and distribute mechanical royalties to the relevant parties.

When considering royalties, take the time to understand the differences between mechanical and performance royalties.

Since many independent record labels also serve as publishers, this can help maximize your royalty generation.

 

Step 9: Establish Multiple Distribution Channels

With the proliferation of streaming services, managing distribution can be a complex and time-consuming process.

Labels can utilize digital distribution services to manage uploads to Spotify, Apple Music, and other streaming platforms.

Such services provide detailed insights into performance, with robust data collection that can be used to drive decisions moving forward.

This data outlines everything from platforms favored by fans to emerging markets and where potential fans are online.

Using these services frees up time, which labels can use to focus on delivering high-quality, limited edition physical albums.

This ensures a release strategy that encompasses both digital distribution options and brick-and-mortar store sales.

 

Step 10: Review & Improve Business Decisions

As your record label continues to expand, monitoring and reviewing performance is vital for driving future growth.

This includes reviewing sales data to assess which songs resonate with your audience and where to focus music marketing efforts.

It also involves assessing streaming platform data and using it to optimize distribution channels accordingly.

By continually assessing performance, you can focus your efforts on attracting fans and signing artists who align with your style.

 

Top 3 Major Record Labels

While indie labels are on the rise, the role of the Big Three major labels in the industry is worth considering.

Let’s explore the top three major labels and how they’ve helped shape the music industry by driving record sales globally:

1. Universal Music Group: With a dominant position in the music industry, Universal Music Group represents many international stars, including Kendrick Lamar, Taylor Swift, and Elton John.
2. Sony Music Entertainment: Emerging in the industry following Sony’s acquisition of Columbia Records, this major label has helped artists such as Michael Jackson and Beyoncé achieve global fame.
3. Warner Music Group: The third major label in The Big Three, Warner Music Group shares similar connections to broader music publishing as its counterparts in the industry.

These labels own the vast majority of copyrights, handling royalties and dealing with high-profile copyright disputes.

 

Tips For Starting Your Own Record Label

As with launching any company, there are tips to help you start a record label in a streamlined and effective manner.

Follow these best practices to ensure your independent label is launched and optimized to achieve the best results:

• Build a great team: Running a record label requires a variety of skills that many musicians often lack, particularly surrounding legal and business decisions. If your strong point is production, seek out a team with the skills to fulfil your label’s legal and administrative responsibilities.
• Diversify your income streams: Diversification of income is prevalent throughout businesses, and record labels are no exception. You can encourage artists to apply for music grants and explore revenue options across multiple streaming platforms.
• Provide clarity on contracts: Setting up a new label means ensuring everything is above board, from the formation of a legal entity to other requirements. If you’re unfamiliar with legal contracts, seek clarity from a professional before signing on the dotted line.
• Invest in a dedicated recording studio: If you have the means to build a recording studio, this can save time and money on hiring spaces for recording sessions.

You can renegotiate contracts with artists, distributors, and other third parties based on their performance and profitability.

 

Read this next: The best music production schools.

 

Tools For Starting Your Own Record Label

As many producers understand, AI music production tools can have a place in the production pipeline without compromising integrity.

When it comes to setting up a label, there are plenty of robust business tools that can streamline the process, including:

• Graphic design tools for branding: Many indie labels hire dedicated designers for their branding, but graphic design software like Canva and GIMP can produce eye-catching designs on a budget.
• Business administration tools: Numerous business plan toolkits are available to help assess your available budget and make informed spending decisions. Additional business-related tools, such as royalty and accounting software, can also help overcome challenging processes.
• Digital distribution services: Managing the back catalog and release schedule of multiple artists across multiple streaming platforms can be incredibly time-consuming. By utilizing a distribution service for digital platforms, the label’s job is simplified, allowing for a focus on artistic development.

Since many of these tools offer free trials, you can explore their features and suitability before investing in paid subscriptions.

 

Summary

The music industry is highly competitive, but knowing how to start a record label allows indie artists to reach fans worldwide.

With free-to-use design tools and other resources available, the process has never been more affordable and straightforward.

Once your record label gains traction, you can expand your roster of talent and work with multiple artists on release schedules.