There’s a void in the educational experience of most opera singers. We’re trained in languages, performance, theory, pedagogy, and opera history. What’s missing? All of these disciplines—with the exception of pedagogy—center around performance. And, yet, the sad truth is that in today’s economy, actually getting to perform can seem impossible and something entirely out of your control.
Let’s put this back in your control right now by giving you the tools you need to create performing opportunities. In this series of five articles, we’re going to cover the five major aspects of starting an opera company. We’ll start with the basics—10 steps that you need to have an entity and get it off the ground. Then we’ll move into building your audience base. We’ll continue with the basics of branding, marketing, and PR so that you can sell what you have—this is more important than most singers give it credit. After that, we’ll finish by talking about hiring and managing a team as well as the creation of a board and fundraising. The goal? To get more opera entities on the ground and more singers on the stage instead of waiting tables.
There are 10 major steps to forming the “entity” of an opera or voice-oriented organization. I’ll break them out so that they seem more manageable, assigning to each step the tools that you need to deploy for success and any costs you can expect.
Choose a Name and Mission Statement
Choosing a name for your company just requires that you have a unique name and a mission statement that goes along with it, explaining the purpose of the corporation. Have this ready to go and prepare to refine it as you move through the process of creating your company.
Incorporate Your Company
Every business in the U.S. needs to be incorporated, and opera companies are no exception. If you plan to do any commercial selling of products or tickets, you need to be an incorporated entity. Nonprofit corporations follow state laws that are very different from those of standard corporations—but the business formation process is very similar.
To start a nonprofit organization, nonprofit Articles of Incorporation must be filed with the state and applicable state filing fees paid. This can be quite confusing for the beginner—and for that reason, I suggest using a simple online incorporation site like BizFilings.com to incorporate your company. This can cost as little as $100 plus state filing fees, which range from $30 to $125 depending on the state.
Which state should you incorporate in as you fill out your online forms? Opinions vary. I suggest either your home state or Delaware. Why Delaware? Because Delaware’s business law is one of the most flexible in the country and nonresidents pay no corporate income tax, among other reasons. But be aware that if you transact business there (selling tickets to a show, for example) you will need to register, which might just make filing in your own state easier, even if the filing fee is a bit more.
Finally, your city or state might require business licenses. Just search online to find out what’s necessary or ask your CPA (Certified Public Accountant)—these usually just require a trip to city hall or a mailed form to state headquarters.
Apply for 501c3 Status
After creating a nonprofit, you want to incorporate your company as a 501c3 nonprofit organization. These corporations can be tax-exempt entities and are regulated and administered by the Department of Treasury through the IRS. With a 501c3, you get limited liability protection (meaning that your directors and officers are not personally responsible for the corporation’s debts and liabilities), access to grants, and the ability to keep donations tax deductible. To apply for status, you need to fill out form 1023 or 1024.
While incorporation processes are somewhat straightforward, 501c3 registration can be difficult. Form 1023, for example, is 28 pages—and with the attachments that it asks for, it can be over 50 pages. For this reason, I do suggest hiring a CPA for this step, but one that charges fees within reason and that has done it before for other companies. Ask the IRS to expedite your process if they can, but also be aware that getting your 501c3 designations can take a long time. OperaModa’s 501c3 status took a year and four months to get, and it was expedited.
In rare cases, you can sometimes “borrow” another nonprofit’s 501c3 status if you need to prior to getting yours, but this should not be attempted without the approval and advice of a lawyer. This step is not quite complete at just the 501c3 filing, either. Forty states require a Charitable Solicitations Registration form to be filled out once a year and require registration before taking any donations. And California also requires you to file a separate state application to create a charitable entity.
Record Keeping
The CPA or website that aids you in incorporation can also aid you in which documents you need to file for your corporation as you run it. Basically, organizations that are starting out need to file three documents in their personal files or with their CPA: the Articles of Incorporation and the Bylaws, which come with your incorporation paperwork once you’ve completed the nonprofit incorporation process through a site like BizFilings.com, and a board-ratified budget for each year. Legally, you must save all board documents in this file as well, which is mainly your board formation documents and the minutes of meetings.
While this might sound intimidating now, just google each of these documents and take a look at templates online. They’re not too hard to decipher and, again, most come with your incorporation packet when you incorporate online. The main challenge is the creation of a board and the storage of board-related documents as you go. I will tackle this in the final article in this five-article series, when we talk about boards and fundraising.
Insurance
All corporations require general liability insurance, and nonprofit companies are no exception. This can range from hundreds of dollars a year to over a thousand. If the company is just you, however, you can generally operate for a while without this, as it’s unlikely that you will sue yourself for malpractice. But once the corporation grows to several employees, this insurance is important to have.
The really critical kind of insurance for opera companies is event insurance. Ranging from $200–$500 a show, it covers the company in a location, such as a theater, should a performer hurt themselves in rehearsal or performance. If you are working a venue that does not demand this, just be aware that you’re open to liability should something happen if you’re without it. Many other kinds of insurance exist for opera companies, including workers compensation insurance for employees and even instrument insurance should a costly instrument get hurt—but generally, it’s best to start with event insurance on a show-by-show basis.
Banking
Once you have a nonprofit corporation, head to your local bank to set up an account. You’ll want to make sure that you bring proof of identity and also your tax ID number from your incorporation. A normal business bank account is fine, with checking and savings. Business checks should be provided, and a debit card as well. Most banks will ask you to deposit a certain minimum amount into your account to keep it open, like $100.
Bookkeeping
Keeping records is not hugely hard, but you need to make sure you follow some basic rules. Most for-profit and nonprofit companies use QuickBooks Online to maintain their books. QuickBooks Online offers a free month to initial users, and then often charges $25–$50 a month on average for their basic plans. It’s critical that you log every check that is written by the company to an entity (and the reason for the cost), and also every donation that comes into the corporation. Their free online tutorials included in registration can easily show you how to do this. Save your check stubs as well and carefully mark on each who it was to, the amount, and the date, for backup.
Saving your receipts from every purchase is also highly useful—just put them in a file folder as you go along. If you provide this information to your accountant at the end of the year, doing your taxes is easy. If they are not given this information, it can be a bit nightmarish. For tax accounting, I recommend the easiest local alternative. There’s no “secret sauce.” Just use your CPA, or if you incorporated your company by yourself, find a local H&R Block or similar and present them with your QuickBooks login and account, your check stubs and receipts for purchases, and they can take things from there.
Legal
You don’t need to engage legal counsel immediately to open a nonprofit if you incorporate online and make sure that your books are in order using online resources. But it’s a good idea to have a lawyer at hand in case you need someone fast. The best way to find nonprofit lawyers in your area is to ask your CPA and other nonprofits that you know. Good nonprofit lawyers know that they can’t bill for the sun, moon, and stars, and other nonprofit executives should be able to help you get to a good legal firm fast.
Budgets
Whatever projects you have in mind for the coming year, begin budgeting them now. Your yearly budget will be critical for getting grants and organizing your team. If you would like to see a sample opera company budget, e-mail me at gthiers@operamoda.com and I will send you ours to use as a template.
Creating a Team
Having just spent the above to create your entity, you’re likely not eager to spend more on the creation of a team. But it’s a good idea to find some compatriots in your mission. I suggest looking for other singers in the area that are as desperate to sing as you are and assigning them different tasks within the company in exchange for a sung role within your first season. If you’re more of a solo flier, that’s OK, too—but just be aware that fundraising and running shows can really take it out of you, so make sure you have the time to do it all so that you can sing, too.
There’s no “right” way to do the above steps, but I’ve tried to give you the most cost-effective way, because most entrepreneurs are not rolling in dough. If done right, the steps above can cost in the low hundreds; if done wrong, costs can easily skyrocket into the thousands, so be prudent. Next month we’ll discuss building your audience base, so you can take this entity and give it it’s grand debut! Send any question in the meantime to gthiers@operamoda.com.
