 People say you can't make money in music and it's true It's a highly competitive industry and there's a massive gap between the haves and the have nots but Don't you get that twisted because there's a lot of money being made by a lot of people in the music industry And I've worked with quite a few music millionaires and built a few successful music companies myself So in all that understand that there's one thing that these people who are very successful of making money in music Focus on and that's leverage and all they do Strategically is ask themselves five questions that help them gain massive strategic leverage. So today, we're gonna go over those five questions Let's get it So number one what is their business model now when I say what is their business model? This can pertain to a partner a company you're getting with anybody that you're trying to work with or build with they ask What is their business model? So let's take a record label at hand. What is the business model of a major record label? It's not hey I want to take this artist cultivate this artist build them out right and then turn that into revenue It's not that by itself people think that but when you think about a record labels business model at large It's hey, I need to take a high volume of artist right and in that high volume of artists Some of them are going to be successful. I'm playing a numbers game That's why I'm signing so many people and then as some of them show themselves to be more promising I will invest in them right to try to accelerate that but I want to be as strict with my resources as possible So that's a record label right there playing the numbers game just like a venture capitalist investor With that being said that has to alter how you think the best artist right who understand that who say What is their business model when I've seen them work and have success with labels? They understood that that's their position right and that means when I get signed Right that I am not just sitting and waiting for them to give me something Right, I know that I'm signed but I still have to create a spark to get their attention to make somebody turn around Where then they can say yo, we need to accelerate this whatever this is going on because they're just playing a numbers game They play they're playing the safety game. They don't want to invest in something even though they signed you I know it sounds crazy They don't want to invest in something that isn't going to be successful and they're always Trying to lower their risk. That's their business model thing through that this same thing applies To every single situation and you have to always be able to analyze it and number one is so important I'm gonna give context with a few more examples music and non music another music example is got a friend Manages an artist from ground up. They built and they were able to get a great deal 300k for seven or eight months just seven or eight months and the people that they did a deal with They don't own anything don't own the masters none of that stuff They only get money from the music that's made within that deal They're not taking any of the prior music right there only get money from the music that is being made in that deal And they're only getting it from streaming. That's where the money's coming from now great deal amazing deal Congratulations, however now when you have to continue to do business with these people you have to understand your position so here's a small example of The friend not understanding that for a second But of course he analyzed it and realized what it really is because the people were actually straight forward with them Which is rare check this out He wanted to build for his artist in countries that were not the key countries that the people he were doing He was doing deals with right, which was the US they wanted to focus on the US His whole idea was hey if I go target some of these other international countries which working with us He found that they were getting really really great results All right, if I could target these people I can build audiences for cheap and with those cheap audiences We can monetize through these live shows and all these other things right that's kind of the idea behind it The people that were listening to them right the people who he did deal with they're like that's great All right, you should do that, but you're not going to do that with the money that we're investing Why because our investment doesn't pertain to what you can make off of live shows or any of those strategies We don't care about any of that stuff because we don't make money off of that Right so you can't take the money that we're investing in you and apply it towards that great strategy put your own money up put your Tell you the artist to put his money up, but y'all We only care about these streaming things and our strategy is built particularly around America because the money in America Is higher than other streaming platforms right so when you understand that right it's all about your positioning What's the business model of the people you're dealing with some deals can be can have a slightly different Business model than their general business model because in any other situation They would have loved to have Masters and things like that, but it was negotiated. So what's the business model of this particular agreement? What so and what do they care about because of it? You always have to keep that in mind because that is your leverage Understand when you know your position and what benefits them and where they're instead of slide You can leverage that situation far better for yourself, right? And here's another example outside of music before we move on to number two I know somebody who works in Amazon. They they're pretty high up make a lot of money into the six figures at Amazon They have these content creators under them right and they've been merging with Amazon because it started with the company outside of Amazon and in this situation Amazon is a Operationally efficient logistic focused company. That's what they care about more than anything else Not all that creativity and all these cool ideas and the content creators are like, yo, man Y'all aren't taking advantage of all these cool ideas I could keep giving you all this cool creative stuff and these graphic designs, but the company isn't built off of that That's not where their strength and their focus lies Because of that. It's like yo, we're just trying to find the best creative We take that creative and we're gonna optimize the hell out of that creative to maximize the results And that is our primary primary focus. We want our click-throughs. We want our sales That's the focus those people as employees, right? See it applies any kind of situation as an entrepreneur even as an employee as employees They have to understand that it's not about your creativity here Not not to the max now if you wanted to be about your creativity going to a a Business right where it's maybe a content media company or something like that But here you're not on the side of leverage and that means you're not gonna make as big of an impact on that company Right and since you're not gonna make as big as an impact as quickly since that's not their core competency Then you have only but so far that you can go with the skill set that you're trying to lean on All right, you have to think more about what their incentives are keep keep that in mind, right? So it applies every single situation in every company every person you're doing business with Know where the incentives lies because you can use that as leverage for yourself And you'll see as we get to number two through five I had to spend a lot of time on that one for a reason because it provides the context when we get to levels two through five You'll really see how this plugs in so number two What is my long-term strategy long-term strategies are a key to Leverage because there's a lot of hustlers that focus on the short-term and how can I do now? How can I do now? How can I flip this moment to the best thing possible for this particular moment? But once you open things up right and have a long-term strategy it actually creates far more opportunities for leverage So here's an example people think about record deals and they have one particular Idea of it right? What's a good deal? It's a bad deal But the truth is there's nuances because everybody has their own life There are some people let's say if your strategy is more so just to get famous to a certain amount Right and you use your your fame to flip into other things and music is your entry point But you know you can flip that into acting because you have these other skill sets or or you know how to flip that into Just other types of business and things of that nature You might be looking at music completely different right? Somebody might want to be a career artist and all they want to do is create music and and that's the focus And I'm an artist artist, but there's some people who might say hey my long-term strategy is not really music I want to use music as a launchpad. So the deal they take May not be as good right as it would be for somebody who's just going to be relying on music You know to infinity So that person might take a step back strategically and what might seem like a lesser financial situation but they know they're building this situation as leverage with this deal because Everything you basically are bringing in investors and people helping you create a platform and then make money elsewhere Which so many artists have done and done successfully however a lot of artists having gone into it Right because a lot of art just had bad deals and then had to figure out how do I make some shake But there's artists who are now more and more smartly Understanding that they could use that as that launchpad and keep going you think about somebody like Will Smith how you flip that being a rapper into an Actor and then everything he's done as an actor and business person in general The beauty of this when we go back to the business model situation We understand right when you have a strategy and you understand the business model that you're working within or the Whether you're doing a partnership or a sponsor deal the things that they care about and the things that you care about It allows you to one manage your expectations of what you're gonna get because you know what the deal is right if I'm a Kid who's highly recruited into a college you should know when you get to the college You're a nobody again until they see enough spark into you and you work your way up to a starting position Right. It's the same thing with the deal with a deal with in music or things like that if you manage those expectations You'll know how to navigate better and to right You'll be able to with your strategic long-term vision vision have your leverage in places that doesn't exist for other people Because you have a path that isn't what other people are doing right you have a strategy That's completely different. So make sure you lay out your strategy and have your own business model in mind Don't always just focus on the immediate How can I make the most out of this particular situation at this time right here? There are stepping stones that you can put together that has a far greater result And that's how you build a lot of leverage, right? Whether it's an intern who's building a relationship And I worked super hard right and we're in build a relationship with these people Then I take their knowledge that they've given me and the relationships that they now Give me access to because of the trust I built with them and I build that into a company Which so many music millionaires have done whether it's scooter brawn and just there's so many I've seen personally or work with personally who have used the internship or just hard work route But there's so many ways to build leverage Understand that your strategy long-term is going to open up the world to you to build leveraging ways that other people Can't because they're focused on short-term greedy and needy situations number three cash flow They asked where is my cash flow not where is my money? Where's my cash flow and this actually goes back to short-term versus long-term because you can take a lump sum or you can Take cash flow the beauty is when you have an Consistent cash flow and they focus on building these small cash flows that they might be able to enlarge Whether that's from managing somebody and taking a small color around my artist and I can just figure out How to get a thousand dollars a month over here with my fans and then make another five hundred dollars a month from my Spotify Just starting out all of that Gives you leverage Right. I can get a lump sum of ten thousand or a hundred thousand dollars But the problem that that creates when you just focus on lump sums is you're now still trying to figure out Where's your next lump sum coming right because the flow has stopped But when you figure out ways to build consistent cash flow, even if they're small They give you leverage and it allows you to make far better decisions and it allows you to be far more Discipline to your strategy right because you're not acting out of desperation So what I've seen right and even what I've done right built small Strategic cash flows that are ongoing. You're at one thousand dollars two thousand dollars three thousand dollars Which is a pretty decent way to live three thousand dollars a month you get to this right? But you can start at one K five hundred whatever that number is You build these cash flows and when you know that you're just gonna have more coming in Trust me the level of freedom that it gives you when it comes to making decisions How you get to make deals with people and the way you're thinking Completely different night and day then hey, I've got thirty thousand dollars in the bank Which I've been in that situation thirty thousand dollars in the bank, right? But where's my next money coming out of because I don't have any flow, right? I have no idea. So I have to Hustle hustle, which one is this situation what you're gonna work out? Is this situation gonna work out? It's not the same focus on cash flow It will give you so much leverage even if that number is not as high as a lump sum Keep that in mind it builds strategic leverage and the cash flow is what gives you the ultimate freedom That's all I'll say for that we can go deeper on that in another video now number four They build Systems, right? It's all about building systems versus being Superman or Superwoman And when I talk about building systems, you're leveraging people and technology All right and information to build these systems because the whole game is not to be doing the same thing over and over again The whole game is to build a system that's gonna allow you to have this exact same output Right, you know, I can do this and that will happen And then once you get that set you can go focus on building something else Right and then you can go focus on building something else And you're building all these systems that helps give you this leverage because you're building assets That's what a system is a system is an asset whether you know, hey I own this small playlist All right, and I know that from this playlist from the system I built maybe the one person I've hired to run it and get the deals when people reach out to it in the money I know that I'm gonna get this amount of money from my my playlist All right, and that also gives me cash flow But I've set that system up so now to be working on the next type of cash flow Or I could be working on a different part of the business that is my strength But I've built systems in the other places of the business. All right Systems are your assets and it's what allows you to have freedom. I'll tell you this most of the music millionaires and even the just millionaires that I know in general they've Built smaller businesses that gave them freedom to focus on the bigger businesses that they built Most of them have gone that route. It's not this huge. Oh, I'm out of here Here's this big lucky lot all day. It's they built cash flows, right? And they built systems that allow those cash flows to continue without them having to do anything and then They focus their other efforts so helpful elsewhere that applies for any kind of artist All right applies for a general music professional who wants to be an entrepreneur because artists have to be entrepreneurs these days And you have to be able to figure out how can you build your your system out? All right, somebody like Russ is somebody who's done that very well. He has a very tight system Yes, he does operate multiple parts of his system when it comes to the core music production But then there's other parts of his system in terms of monetization Merch and how these other things get managed So you might have your your core strength that you want to stay in and you have to be there But you still have to figure out how to bring in people that are gonna help you build systems and Identifying that we'll do a whole video on team and building with the right people if you want to you know If anybody wants to hear that make sure y'all put in the comment section below to let me know but it's about Identifying those right people and understanding what those right systems are to build in the first place and even the order to Which to build the systems Systems are the superpower of music millionaires and please take note I want you to really not miss that fact that I said in terms of so many of these people, right? They build businesses That get first give them freedom enough to focus on bigger businesses All right freedom usually is coming from that cash flow even if they exit and they get one massive lump sum They've now established something that can help them Focus on building something more or the freedom of the whatever they want to focus on and guarantee They're not gonna sell for a lump sum if you haven't built with systems because nobody's buying some messy Businesses that that doesn't work without you. That just is what it is number five Where do I focus my resources right now focus of resources is massive when it comes to building leverage And I'll tell you I imagine that there's three different opponents All right, and they're all in the same industry, but there's different parts of System that they can focus on or different parts of the industry where they're similar But they're focused on different ways of building their business for one instance Somebody might be using their YouTube channel or like social media really heavy Somebody else might be using ads and that system really heavy to get to get things out And they might be focused heavily on Maybe the operations and establishing back-end industry Relationships then you have this other person that chooses a third round and they try to do social media and They try to be the super super industry people at the same time All right with no operations really strong What happens in those situations is person number one? They win that one thing that they were focused on the social media and all that stuff and they establish a dominance there Person number two wins this music industry situation. They really established those That dominance and they have all those relationships and they're their schmoozers All right, and that person who's trying to focus on both of these things all right and some other third route They don't win anything They lose out in these two areas and they have nothing established that's different at all So they end up getting wiped out as these people become more and more dominant And then as these people become more and more dominant that person says Hey, let me take my social media presence and flip that into the industry somehow and that person's from the industry says Hey, let me take my my industry dominance and use those relationships to create a presence on social media All right They've done it in order first of trying to do things at the same time because focus of resources is a very real thing Right, I'm spending 100% of my time over here All right, and I'm practicing and we're playing basketball or something like that You're playing all these other sports and and all this other stuff, but we have the same equal amount of talent I'm going to beat you out because I'm spending all my time here and you're splitting it up It's just gonna happen. So focusing resources and knowing when To to actually move past to refocus your resources is a massive amount of things because I'll have only but so much time I might have only but so many people on my team and I have to allocate their time Let alone the amount of money that I have right now, right? All of these resources need to be focused and they need to get a specific output Music millionaires are they're Helatious about where they focus their resources and making sure they get a specific output before All right, they're able to move on past something else and what do you do with those focus resources? You're usually going to establish a system So those are the five things that you have to focus on when it comes to building strategic leverage Those are the five most common ways that I see music millionaires build strategic leverage now I know this isn't the type of video that people typically hear or see when it comes to music and but I really want to focus on Helping artists become more of entrepreneurs and music professionals Understanding more of the entrepreneur side if that's something that people are interested in so make sure You not only like this video but share it share it with other people If you think there's something valuable to other people want to see and of course, you know make comments Let me know I'll do about three or four of these type of videos See how it is if it's something that people actually want to see or not and we'll continue on from there So that's it for this video today if you like this video go ahead and like button if you like it in my as well Share it share the video and of course if you're not subscribed, you know what to do hit that subscribe