Guide to Managing Band Finances [Set Up Funds for your Band & Music Tour]

You're focused on mixing new releases at the studio. You're busy sounding out brand new guitar licks. In other words, you're busy with your band. And it's paying off. Your audience is growing.

And now that you're graduating from garage-band status, you need to manage band finances. But you need to do that without missing out on precious jam time. This article can help.

Keep reading to see how most bands make money and start generating more income to support your group. We'll show you the most common band expenses so you know what to expect when it comes to spending — and saving — band money.

You'll also see how musicians grow their tour fund and stay financially secure on the road. Finally, we'll show you how you can manage band expenses in a way that's almost as smooth as that new chord progression you just sounded out. Almost.

Contents:

• How to make money and fund your band
• Band funds and how to set one up
• How to split income among band members
• How to finance a music tour
• How to manage band finances on tour

How do I fund my band?

Money money money. How do most bands make money? No, that's not how the ABBA song goes. But even these megastars had to make money before a Eurovision Song Contest launched them to fame.

These are the top four ways your band can generate income on your way to the big time.

1. Live shows

Live gigs are the main source of income for most bands — especially new groups. Chances are, you're already making money from ticket sales and venue guarantees.

2. Selling merchandise

Band merchandise requires an upfront investment to pay the graphic designers and production costs. But it's well worth it. If your products have good design and quality, they can be highly profitable and bring in as much money as your ticket sales.

3. Album sales

Like merchandise, album sales require an upfront investment to cover studio time and production costs. But selling your music is an important way to promote your band.

Whether you choose to sell exclusive content via QR codes or on LP vinyls, album sales are a great way to build exposure.

4. Other income sources

In addition to playing live shows, offering cool merchandise, and selling music, there are several other ways to increase your band fund. YouTube ads and royalties can create streams of passive income so you can continue to hone your craft.

Some bands also increase their income through sponsorships and fundraising, which we'll get into later. No matter where your income comes from, you can collect it all in a dedicated Pool with Pool.

What to do with band income

Your gigs sold out. And so did your new t-shirts. That's awesome. Your band is making money. What should you do with it?

It depends on what your band is comfortable with:

• Some groups set up a band fund to save money and cover expenses
• Some start a band fund and split earnings evenly
• Others forgo the band fund altogether and divide their income

Whatever option you choose, Pool can help. Pool is where you can collect, manage, and spend band money together and transparently.

What is a band fund, and how to set one up

Many musicians manage their money with a band fund. Here's what that is, why groups use them, and how to set one up.

What's a band fund?

A band fund is money you pool together to cover band expenses. Pool is a great place for your band fund because it's already designed for multiple users who need to manage money as a group.

What are band funds for?

You can use your band fund for lots of things. This list isn't exhaustive, but it covers 9 of the most common expenses:

1. New PA
2. Studio time
3. Rehearsal space
4. Music production
5. Merchandise
6. Advertising and promotional content
7. Web hosting fees
8. Performance fees for musicians and sound crew
9. Tour expenses

Some bands say it's better to have short-term band funds for specific goals, not ongoing band funds without a definite purpose. You decide what works for you. Whatever you decide, Pool can help manage your band's finances.

How to set up a band fund

A band fund works when everyone's on the same page. Use the following guidelines to set yours up.

1. Set clear goals and rules If your income is coming from a variety of sources, decide how to organize it. Does all income go toward the new PA? Or, does 60% go toward the PA and 40% toward merchandise?

Do ticket sales go to your band fund, and merchandise sales get split among band members? With Pool, you can set up a direct deposit straight to the Pool — no need to worry about having one member transfer band income.

2. Create Pools for your band fund categories Sign up at poolmoney.com and create as many Pools as you need. It's fast, easy, and free. If your band fund is for one specific category, like equipment, you can create a Pool where you can collect and save money together for it.

If your band fund is structured to pay for several categories, like merchandise or tour expenses, you can create as many Pools as necessary and divide your money accordingly.

3. Set budgets for your band fund Clearly defined budgets are essential for your band fund.

• How much do you need to save for x, y, or z?
• How much are you agreeing to spend on merchandise per month?
• If you reach your savings goal ahead of time, will you reinvest the remaining money back into the band, or will you split it among the band?

Figure out exactly how your band fund is going to be organized to avoid confusion and problems.

4. Make an agreement about how the band fund gets divided if members change or the band breaks up No one plans for their band to break up. But if you have a band fund, you need to decide what happens to it in the event that the group changes or dissolves.

Here are some different scenarios to consider:

• If your band purchased a PA with the band fund and the band breaks up, will you divide the equipment evenly?
• If a member leaves the band of their own accord, do they receive a partial payout from the band fund?

5. Save and spend the band fund transparently Shared money can get messy and confusing. Pool allows band members to track Pool transactions in real-time directly in the Pool website. This helps everyone build their band savings with greater trust and lets everyone save and spend transparently.

How do bands split income?

You might not jive with a band fund. You might prefer to split income instead. But before you can divvy up the earnings, you need to pay out your crew and team members, like side musicians, engineers, producers, managers, publicists, promoters, and more.

Pool can help you manage this part of the band's finances, too. Create a main Pool where band income is collected and managed. Then, create separate Pools for individual band members, crew members, or specific expenses.

When it's time to distribute earnings, transfer funds into the appropriate Pool and invite the recipient to join. Once they sign up and join the Pool, they can access the funds, track activity, spend directly from the Pool if granted permissions, or transfer funds to their linked bank account.

How do you finance a music tour?

It's hard for small- to mid-level artists to make a living on the royalties from online streaming and album sales. If you're in the same boat, you might decide to take your band on the road. It's a smart move.

In the age of digital music, tours can be a reliable and lucrative source of income for music groups. Plus, tours are an excellent way to market your music and to interact with both fans and music industry professionals.

But tours can be a financial nightmare if you're not prepared. Here's how to pull yours off without a hitch.

Budget and forecast for your tour

No one needs financial stress when you're traveling and setting up a new show every night.

Here are the most common expenses you may have to budget for:

• Rehearsal space: practice in spaces similar to upcoming venues
• Rental equipment: clubs and arenas usually require different equipment compared to smaller venues
• Tour and equipment crew: prepare to pay your managers, agents, and crew
• Transportation: costs depend on the band size, equipment, merchandise, tour route, and tour length
• Food and lodging: costs include hotels, restaurants, groceries, etc.
• Musician fees: budget for any musicians you hire
• Merchandise: how much will you need to bring?
• Promotion and marketing: this includes your killer website, press releases, tour posters, YouTube ads, etc.
• Venue payments: which venues require the band to pay to perform?
• Insurance: this covers rented equipment, transportation, audience safety, theft, etc.

How to raise money for your tour fund

Once you've created a budget for your tour, it's time to start making and saving money. Here's how.

1. Set up a Pool A Pool is a fantastic place for your tour fund. It's free to set up and free to run, and everyone in the band can join. Together, you can contribute, manage funds, and track activity in a transparent, shared place. There's no need to mix money with personal bank accounts — it's a shared wallet for your group.

Your tour fund stays in the Pool until you need to spend it on any of your tour expenses. And you can spend directly from the Pool with the free Pool debit card that comes with it. Tours are expensive, but the debit card doesn't cost you a penny. There are no transaction fees, service fees, or overdraft fees — it's 100% free.

2. Band fundraising GoFundMe and Indiegogo are popular places to raise money. But platform fees and payment processing fees can reduce the amount of money you ultimately receive. With Pool, you can collect, manage, and spend funds together in one dedicated place.

Once your tour fund Pool is set up, invite band members and supporters to participate. Then focus on building excitement around your fundraising goal with these tips:

• Promote your fundraising goal on your website and social media channels.
• Share updates on your band's progress and how funds will be used.
• Give fans a compelling reason to support the tour.
• Reward supporters with free tickets, merchandise, exclusive content, or VIP experiences.
• Partner with local businesses or charitable organizations to expand your reach and attract additional support.
• Host smaller fundraising events or performances to build momentum before the tour.
• The more connected people feel to your band's journey, the more likely they are to support your fundraising efforts.

3. Play small, local shows In the run-up to a big tour, bands sometimes perform smaller shows to save money. Typically, you don't need crews or managers, transportation is cheaper, and home equipment works just fine. After each show, put your earnings in the tour fund Pool and watch your savings grow.

4. Find sponsors Network with your local fanbase and get in touch with small businesses. Invite them to sponsor your upcoming tour. Not only does it give your band timely cash flow, but it also gives small businesses greater exposure and more business.

How Pool helps you manage band finances on tour

Life gets hectic on the road, but band finances shouldn't be. Pool helps you monitor and spend your tour fund in a straightforward, transparent, and convenient way.

1. Quickly track expenses

It's so easy to forget about expenses or lose receipts when you're traveling from one city to the next. Leave it to Pool. Your Pool shows every transaction on poolmoney.com, and also generates a monthly statement if you need to cross-reference any transactions later on.

2. Your tour fund stays in the Pool

You admire your drummer's structure. You're a big fan of your lead vocalist. But it's pretty clear: music is everyone's forte. Not accounting. With Pool, no one needs to collect, manage, or spend the tour fund on their own or in their personal bank account.

Your tour fund stays in the Pool until you spend it or send it for band expenses. Keeping tour money separate also helps everyone avoid overdrafting accounts or maxing out credit cards. Your tour fund is safe and there whenever you need it.

3. Spend directly from the Pool

Take your tour fund on the road with you. Your Pool comes with a free digital Pool debit card that spends directly from your tour fund. You can also request a physical debit card for easy in-person purchases while you're traveling. Both can be used everywhere Visa is accepted.

As Pool admin, you can set permissions so other band members can spend with you. If, for any reason, you need to lock the card, you can do it quickly on poolmoney.com.

4. Create separate Pools for each spending category

Pool keeps tour funds straightforward by keeping them out of your personal account. Simplify your band fund even more by dividing it into separate Pools, each one for specific spending categories. For example, one Pool is for hotels, another for food and drink, etc. This allows you to track spending easily and quickly.

Band finances might be new for you. But, now you know how to increase your band income, set up a band fund, and finance your tour with Pool. Start managing your band's finances with Pool so you can get back to the studio and do what you do best.