The Foundational Five Steps
1. Write a business plan for your record label.
2. Pick a name for your record label and trademark it.
3. Incorporate your business, preferably in Delaware.
4. Apply for bar codes from the UC Council.
5. Register a domain name and build a web site.

The Next Seven Solid Steps
6. Start signing artists and pressing up records.
7. Hook up with a record distributor.
8. Hire a publicist (or do it yourself).
9. Hire a radio promotions company.
10. Start selling records.
11. Get a good accountant.
12. Pay your artists, on time and in full.

Once you've gained some local buzz with your self-distributed CDs, it will be time to step up and start dealing with a regional or national record distribution company. This can be either an exclusive or non-exclusive relationship, depending upon the scope of distribution. The relationship begins by the distributor placing an initial purchase order for CDs to be shipped to the distributor's warehouse. Some distributors ask that their labels advertise a page in their monthly new release mailing which goes out to retail accounts. The distributor will charge back the cost of this advertising against your account.In order for them to effectively solicit your product, most distributors ask that you provide them with a suitable quantity of "One Sheets" and promotional goods with your initial shipment. Distributors prefer at least a box of promotional CDs (Also known as DJ's). In store play is a great way to sell CDs. A lot of stores try a new CD only if the distributor can furnish them with an in-store promo copy. What about your price to the distributor? As a general rule of thumb, labels sell to the distributor at 50% of the list price. This works out to between $5 and $8 for a single disc release.

Go to Step #8: Hire a publicist (or do it yourself).