Some Info:

You may think you don't need a business manager until you are receiving enough money to justify the expense.

However, when you get to that point, a business manager is a very important individual. A business manager monitors the bands' income, expenditures, budget and insurance. Most importantly, they will be aware of the tax consequences of your career. As all bands realize, the entertainment industry does not take taxes out when they pay you. I challenge the band to find me a show they played where their net pay was $273.54 after taking out social security, state and federal taxes. It just does not happen. When you make enough money, that tax bite can come pretty hard come April 15th.
There are no requirements to be a business manager. Most business managers are CPA's. An accounting degree is not essential, however, be sure that your business manager is skilled at complex financial transactions. Also be sure that he is familiar with the entertainment industry. This criteria is essential because the entertainment industry has many unique aspects which differ from general business. Try to find a business manager who charges hourly as opposed to a percentage of your income. If the business manager insists on a percentage of income, try to include a cap so that if your album goes triple platinum, your business manager does not get to retire. Never agree to pay a business manager more than 5% no matter how much money he says he can make you or save you.

Business managers are compensated on an hourly basis, monthly retainer, percentage, or some combination of the above
The business manager handles the musician's finances so you won't need one until you have experienced some degree of financial success. She helps you with investment decisions, tax matters, monitoring income from contracts, estate planning and other financial matters. Until you require the expertise of a business manager, an attorney or accountant can satisfy most of your financial management needs.
Your business manager should at a minimum have expertise in accounting and general business practices. She should also have specific knowledge and experience in the music business since many music business principles differ from general business principles. If your business manager will be giving you investment advice, your state may require that she be licensed as an investment adviser.

Entertainment Attorney
An entertainment attorney handles any contractual matters conceivable within the Entertainment industry. Entertainment attorneys can be freelance, hired on retainer or as an employee of a company or business within the entertainment industry. Entertainment attorneys generally specialize in one of three separate fields within the entertainment industry: Sports, Film and Television, and Music. An attorney that specializes in the music industry usually has a solid depth of understanding with regard to copyright laws and artist/band agreements with managers, publishers, record labels, booking agents, etc. Successful completion of Law school and a state bar exam are requisites for being an entertainment attorney as well.

Business Manager
The business manager handles the financial affairs of musicians and entertainers. Most have degrees in business administration with concentration in accounting or management. The business manager should have knowledge of negotiating, accounting skills, investments, and a thorough knowledge of tax laws
Music Business Managers handle the day-to-day business of musicians. They meet with the client and gather information and documents that will help them understand their client. They make decisions in the musician's absence and act in the musician's best interests. They work to improve the image of the musician they meet. They help the musician develop professionally and help them set and achieve goals. They work with musicians to avoid making mistakes that could have implications on their entire career. They help design a long-range plan, discover new ways to promote the musician and the music, and provide workshops and seminars to help professional musicians. They may provide instruction on time and money management. They may develop strategies and work with the media. Tasks include: This information lists tasks that may or may not be a regular part of the job. They may also help with public relations. They may help promote a new release campaign. They may make travel arrangements. They may also work with others that work with musicians such as the recording studio, the record company, music arrangers, the publishing company, booking agents, singers, producers, Music Public Relations Managers (specialty), the sound engineersand mixers, the manufacturing of releases. They may also listen to radio, television and video to stay familiar with the music business. They may help with the hiring of personnel

The second type of manager is the business manager. In essence, the business manager is the artist's accountant and financial advisor (and sometimes bookkeeper as well). Many business managers are certified public accountants (C.P.A.). The business manager may administer all of the artist's financial matters, including the paying of bills, preparation of tax filings, handling the royalty or publishing income, as well as frequently advising them on potential investments or significant financial decisions. As with personal managers, there are the good ones and the dangerous ones. The horror stories abound. Choosing a business manager should not be an impulsive decision. Ask around and investigate. Check references and background. Having an idea of what you or your client is looking for is essential. It is easier to lose money than to make it.

As you may imagine, business managers are normally for people or companies that have already achieved some sort of financial success or flow of income. Business managers may charge on an hourly basis, or on a set monthly minimum fee. There are other variations as well, including a percentage of gross earnings, similar to personal managers. There could be a wide range of percentages from the artist's gross.

Remember, there is no such thing as a "standard" management agreement. Although the types of provisions in these agreements seem to be standard; each and every clause of the contract is subject to negotiation. The bargaining positions of the parties and the skill of the negotiator will determine how the final agreement will look. Since these agreements generally last for well over a year, the significance and importance of negotiating these deals should never be minimized. It is essential that a professional representative, or entertainment attorney of your choice be consulted prior to signing any document which obligates you to others, or which may grant another party rights to a share of your income.

 

Business managers, as opposed to personal mangers, focus solely on the artist’s finances.