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Home » Music Business » Music Business: Sorting Out the Decision Process

Music Business: Sorting Out the Decision Process


by John Stiernberg, member Local 47 (Los Angeles, CA)

Planning is important to success in the music business. There are strategic plans, marketing plans, sales plans, and financial plans—the list goes on. They are all important. The primary value of any plan is decision support. A good plan provides a platform for making critically important business decisions that have an impact on your money, your time, and your brand. But, where does the strategic plan end and the operating plan kick in? Do you need both? Can they be part of the same document? How do they work together? This article addresses these issues and recommends three action tips for success.

Your Strategic Plan vs. Your Operating Plan

Strategic plans aren’t just for big companies in traditional industries. They are relevant to any business, including music. A strategy is a decision that you make now that affects what you do in the future. A tactic is an activity that flows from a decision, and is geared to achieving a specific measurable result. 

Some businesses have great long-term strategy, but lack the tactical or operational details necessary to implement their visions. Others have the reverse: a decent budget and operational structure, but no strategic framework or vision beyond the current year.

So what’s the difference between a strategic plan and an operating plan? Here is a quick summary.

Strategic Plan

  • Describes your company three to five years in the future.
  • Answers the questions “what are you going to do and why?”
  • Includes market trends and competitive analysis, in addition to core company strategy.
  • Includes foundation information (mission, vision, values, and brand positioning statement) and financials.
  • Is relatively brief.
  • Is updated annually.

Operating Plan

  • Describes your company one to two years out (this year and next year) in detail.
  • Answers the question “How are you going to achieve planned financial and nonfinancial objectives?”
  • Includes current budgets and tactical projects for all departments.
  • It is longer than the strategic plan and more detailed in describing how things work.
  • It should be reviewed monthly.

A System of Documents

Think of your plan documentation as you would an orchestral score or set of studio charts. They are designed to make sure that everyone is “reading from the same sheet of music,” literally and figuratively. The strategic and the operating plans can and should be combined into a single system of documents. The documentation includes both text files with the narrative and spreadsheets with the numbers. 

Once you’ve created the first version of your plan package, you can easily review, modify, and update it as needed. How often? I recommend that you review actual results, compared to the budget, at least once every three months (monthly is better). However, a review of results does not necessarily mean a change to the strategic plan. 

Update the operating plan once every six months. This includes adjustments to details on sales, marketing, product development, competition, and special projects. There are multiple sections to the operating plan that go into more detail than the strategic plan does (e.g., promotion plan, hiring schedule, or other key initiatives).

Approaching the Decision Process

How do I make a decision like when to hire more people? When should I buy a new van or sound system? Should I align with a booking agent in another city? How do I promote my current business to get enough gigs to survive? Your plan is the foundation for addressing these and other key decisions. Here are three suggestions for how to successfully approach the decision process.

Action Tip 1. Review the decision you are working on in the context of your mission, vision, values, and brand positioning statements. These are the foundation elements of your strategic plan. If the issue at hand is consistent with these principles, then proceed. If not, shut it down or rework it.

Action Tip 2. Run the numbers. Estimate costs and benefits relative to revenue potential. Is it affordable? Do I have enough time and money to do a quality job? Does the project or initiative help build revenue, profits, and brand buzz? What other projects are prerequisites for success? These questions represent the transition from strategic (long-term goals) to tactical (implementation geared to achievement of near-term objectives) decision making.

Action Tip 3: Practice on lower risk decisions. If you have a hard time deciding what to order for dinner, be careful when you are faced with business decisions like buying a building for your office and rehearsal studio or hiring a new manager. Practice on decisions that are important, but less scary, like replacing your lighting rig, leasing a new van, or upgrading your website. Though important tactically, a wrong decision won’t put your business at risk.

Here’s the Point

Whether the project is strategic or tactical, big or small, your integrated strategic operating plan is an essential tool and the foundation for decision making. If you don’t have a plan, every decision is difficult. With a plan, you streamline and inform the decision process and are more likely to make the right decision.

Be sure to implement the Action Tips in sequence: use your strategic plan as a foundation, quantify the financial impact, and practice decision making on projects with lower risk.

About the Author:A member of AFM Local 47 (Los Angeles, CA) and the Recording Academy, John Stiernberg is founder and principal consultant with Stiernberg Consulting, a Sherman Oaks, California, based business development firm ( Stiernberg has more than 25 years experience in the music and entertainment technology field. He currently works with audio and music companies and others on strategic planning and market development. His book, Succeeding In Music:  Business Chops for Performers and Songwriters, is published by Hal Leonard Books. Contact him via e-mail at or find him on LinkedIn, Facebook, Twitter, and Grammy365.