Every successful artist has a manager (perhaps several) and the agreement between the manager and the artist should be clear and in writing. The relationship between an artist and manager may start out informally or may be based on a verbal agreement but should always be thought out and detailed. While the common goal of ensuring the artist’s success can produce a sense of camaraderie and partnership, far too often achieving success (and receiving the money that follows) can result in disputes and even lawsuits.

Early on in the relationship, the terms are often simple: the manager will promote the artist and take a percentage of the artist’s income. But does the manager take his cut before or after the artist’s expenses? And which expenses are calculated into the deal? For example, if a headlining band gets paid $1000 to play a show and the headlining band pays the opening band $200, does the headlining band’s manager take a percentage of $1000 or $800?

The example above is a simple illustration but shows just how many ways things can very complicated very quickly. What are the manager’s responsibilities? And what happens if he fails to fully satisfy those goals? Does he not get his full percentage? Does he not get any commission at all?

Any business deal where money changes hands should be in writing. When a manager begins working with an artist, the manager is investing his time and efforts in the artist’s career. The manager may get the artist a record or movie deal or a sponsorship agreement that continues to pay the artist for many years. For this reason, management agreements often provide for the manager to continue to get paid after the management relationship is terminated. For the artist: do you want to continuing paying your manager after you fire him or he quits? For the manager: do you want to make sure you get paid for your work even if you’re not managing this artist for the rest of his career? All these terms must be in writing or they will be very hard to enforce!

A management contract answers countless questions and lays out the terms of the relationship so that disputes (and lawsuits) can be avoided in the future. While the artist and the manager are on the same “team” for most endeavors, they are potentially adverse parties in the negotiation and execution of a management agreement and therefore should be represented separately. Although a fledgling artist or new manager may not have discretionary funds to spend on a management contract, the money (and resources) it can save in the future makes it a crucial step in any career.

It’s great to get together with fellow musicians and shed. Then you start to get some tunes together and want to gig. All of a sudden, you’re a band! Aren’t there some things you should do before you take the next step?

Starting a band is like starting a business. And every business should start with an agreement. While every venture starts out with good intentions and everyone getting along, things inevitably break down. An agreement can lay out who contributed assets to the business (“that’s my microphone!”), how ownership is divided amongst the members (“I’m the singer so this is my band”), and how decisions are made (unanimous? majority rules?). If the band or business is an LLC, an operating agreement lays out all these details (and more). An operating agreement is absolutely necessary when founding an LLC.

Whether you’re a musician starting a band, a filmmaker embarking on a new project, a designer producing a new line of products, or just about anyone starting any business, make sure you put it all in writing from the very beginning. It saves a lot of headaches and heartache down the road.