The Nigerian music industry is one of the biggest and many have tagged the industry a multi-billion dollar industry. In recent years, the revenue been generated from the music business in Nigeria has increased exponentially just as Nigerian music is gaining worldwide acceptance and support. Without an iota of doubt, record label play a vital role in the achievement of this feat as they are the ones who harness and promote these talents that blossomed into superstars and are doing Nigeria proud continentally and internationally e.g. (Wizkid and Empire Mates Entertainment)

In line with this, the establishment of a record label can sure be a profitable investment for anyone that wants to venture into the music world. However, in successfully establishing a record label in Nigeria, certain things must be considered and steps followed.

A Business Plan

Memorandum and articles of association, the aims and objectives, vision and mission, type of artistes to sign, type of contracts to sign for artistes and many more constitutes the plans of a record label. A proper business plan helps streamline the goals and defines the path on which the record label treads. An example is the G-Worldwide label policy where the signed artists are not allowed to collaborate with other artists outside the label.


Funding is very essential for a record label to function. In fact, money is the bedrock of any successful label. Money is needed to promote the label’s artist, shop for the wardrobe of the artistes and buying one or two studio equipment amongst others. Since revenue wouldn’t be generated immediately the label starts, the label needs cash to function and not pack up along the line. The sum of three million naira is not a bad idea.


After drafting a business plan and getting enough funds, the next step in establishing a record label in Nigeria is to register the label with the Corporate Affairs Commission. This ensures that the label is given the status of a legal entity which can sue and be sued in that capacity. Registration of the label allows the label to carry out valid transactions without fear, execute contracts with their artistes, the copyright of the artist and every material emanating from the label is protected and the company’s name and logo is exclusively restricted. Registration with the CAC should cost between Two Hundred and Fifty Thousand Naira and Five Hundred Thousand Naira. Without been duly registered, any transaction conducted by the music label is void.

Recording Studio

In order to save costs and motivate the signed artists to give in their best, it is advisable that a record label establishes a well-equipped recording studio for artistes signed to the label. A standard studio should gulp between Five Hundred Thousand Naira to Two Million Naira.

Human Resources

Human resources is very essential in setting up a record label. For a label to properly function, the workforce and staff motivation goes a long way in reflecting on the artiste success and consequently the label’s success. Human resources include the PR/publicity which handles the public image of the artistes and the label, inform the public of their shows, tours as well as promoting the artiste. The sales team ensures that the songs and materials from the label makes physical and digital sales through interaction and negotiation with marketers and online sale sites. There is also the logistics team concerning shows, travelling of artistes, bookings for interviews and more. It is in the logistics team that the artist manager belongs to, serving as an intermediary between the artist and the label. The A & R team handles the discovery of new talents to sign into the label.

With a recording studio, the label will also need a music producer and sound engineer to handle the music aspect of the label, which is the major ‘raw material’ which they must manufacture and generate income from. Finally, a legal team to handle court cases in case of clashes between the artist and the label, draft contract for the artistes and also handle endorsement deals for the label and artist therein.

Signing an artiste

Having fulfilled all these other necessary steps listed above, the next step for the record label is to sign an artiste that matches the record label goals and drive. This is the work of the A & R team. They look out for rising stars in the industry that can successfully recover any money that the label spends on them as no business wants to make loss. Signing a good and marketable artiste is a very vital step in the formation of a record label.

Creating hype for your artiste

Now the record label is all set, all that is left for the continued existence of the label is for the label to continue promoting the artistes in the label. With time, proper planning, promotion and development, the label is bound to be at the top of their game with top notch artists, sold out shows at the same time raking in millions.


This article was written by Sam Synord; he tweets via: IAmSynord

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