Is a singer-songwriter the owner of a small business?
A singer-songwriter, as the name indicates, sings and writes songs. He has revenues essentially from performances and recordings. He needs to cover his costs, e.g. living costs, travel costs and investment in equipment. Hence, the fundamental equation applies Profit = Revenue - Costs A singer-songwriter typically bears the risk of economic failure. In the worst-case scenario, he might need to search for revenues outside his core business.
First, let’s look deeper into the revenues of a singer-songwriter. Performances, often called ‘gigs’, happen live in front of an audience. The singer-songwriter gets paid a typical fee. Typically, there is only one fee per performance and only one performance per day. The fee depends not primarily on the quality of the performance, but on the expected revenue of the overall event. A famous singer-songwriter gets a much higher fee than a newcomer. For a costly event, mostly well-known musicians are hired. Recordings nowadays are mainly monetized in dependence on number of streams on platforms. There are physical devices, e.g. CDs, records. However, these ‘other revenues’ can be modelled in dependence on the number of streams.
Second, on the cost side, there is mainly the cost of living of the musician. Equipment is an investment, but typically a one-off investment and it can hugely vary in size with low budget entries available. Both performances and recordings imply costs. Typically, the costs for a performance, e.g. travel, is outweigh by the expected revenue. For recordings however, substantial costs for a high-quality recording and publication bear the risk of no revenue at all.
Third, on the profit, a good mix of performance and recordings might be of advantage. Performances increase the awareness of an audience and increase the reputation of the musician. Recordings deepen the bond with this audience. Currently, performances are said to be more profitable than recordings, whilst in the past it was vice versa.
In conclusion,though the work of a singer-songwriter might seem extraordinary, his need for maximizing revenue while minimizing costs is the same as for any owner of a small business.