The business manager is the person on your team who handles all your money. He or she collects it, keeps track of it, pays your bills, invests it, makes sure you file your tax returns, etc. Did you know that in California, a person needs no credentials whatsoever to be a business manager?
What this means is that you could be turning your money over to someone who has no more financial training than you do. And when you stop to think about it, that’s pretty scary. SO BE EXTREMELY CAREFUL WHEN YOU PICK A BUSINESS MANAGER!
When interviewing business managers, there are some essential questions you should ask:
What kinds of financial reports are you going to get, and how often? (You should get monthly reports.) Ask to see samples of the reports. Are they clear? Can you understand them?
What is the business manager’s investment philosophy? Will they only keep your money in conservative, short-term paper or in highly speculative pork belly futures? Don’t settle for the gobbledygook that says, “We tailor to every individual’s needs.” Ask what they’d do for you. And why.
How much do they charge?
Does the business manager represent music clients? This may seem like a silly question, but some very talented business managers have no expertise in the music industry, and you don’t want one of them. The music industry is very specialized, and you need someone who understands its intricacies. For example, if they don’t understand music publishing, they can’t do a good job of making sure you’re getting paid everything you’re owed by the publisher. Good business managers know when something should have come in but didn’t; someone without industry expertise may not.
Have they handled people with your particular problems and challenges? If you’re a new artist, you want to be sure they know how to watch every penny so you can survive.
Be sure the business manager wants to educate you, rather than just pat you on the head and say, “Trust me, kid.” Most decisions can be condensed down to a fairly simple summary, and you should make all the significant decisions yourself. Be wary of someone who just wants to tell you what to do and seems offended if you question it.
Remember: BE EXTREMELY CAREFUL WHEN YOU PICK A BUSINESS MANAGER!