Quitting your day job it s the amateur musician s dream. One day, your band gets out of the basement and on to the radio. Then, suddenly, you re a rock star, and it can be all about the music.

Not quite.

Bland as it may sound, the reality is that the music business is still a business and musicians are essentially small-business owners who need to think about contracts, taxes, marketing and building a brand.

They re in the arts, but when they re playing professionally, they re in a business, says Frank Dusek, an accountant with the Chicago firm Weiss, Sugar, Dvorak & Dusek, Ltd., whose clients include musicians. It s about supporting yourself, making a living, making your house payments.

The American Federation of Musicians, an international union, has about 90,000 members in the U.S. and Canada, about 85% of whom are self-employed, independent contractors, according to Paul Sharpe, the union s director of freelance services and membership development. And whether they consider themselves business people or sing about the downfall of the financial industry, many of these independent artists have had to develop some of the same skills and mom-and-pop store owners in order to survive.

See 8 lessons rock bands can teach you

Historically, musicians have always been small entrepreneurs, Sharpe says. But with CD sales slipping thanks to widely available free music online, the industry s business model is changing. The old model was: band goes in the basement, rehearses like heck, writes some songs, tries to get a demo heard by a record label, Sharpe says. As major labels have grown less comfortable taking risks on unproven acts, more bands have become their own producers, a role that requires a deeper understanding of marketing and other business concerns, Sharpe says.

Of course, even a band working with a major record label could suffer from a lack of business savvy. Many well-known musicians may have been swindled because they were only thinking creatively and they were just kind of signing anything, says Wesley Verhoeve, who runs Family Records, an independent artist management firm. Verhoeve says that changes in the music business haven t made business skills more important, but they have made more people aware of the need for artists to pay careful attention to business matters.

From big-picture concerns like building a brand to nitty-gritty details like deducting the cost of a home office on a tax return, rock bands face many of the same challenges confronted by other small-business owners. Here are eight things small-business owners could learn from rock bands.

Nobody becomes a musician because they want to get rich (or they shouldn t, anyway). It s a business that s driven by passion and where playing is part of the job description. But for those who have, or hope to, quit their day jobs, this might be the wrong attitude.

When a guitarist straps on his guitar he s going to work, says Sharpe. Many venues may require artists particularly those just getting started to pass a hat, or sell tickets themselves, in order to get paid while the house sells drinks on the promise of live entertainment. I would encourage young people to make sure that when they do perform that they re getting something tangible in return, Sharpe says.

When your job is also your hobby, it can be difficult to make sound, business-building decisions about which projects to take on. Composer Rebecca Pellett, the sole proprietor of May I Music, says that, as a workaholic who loves her job, she does sometimes take jobs that pay less than her usual rate if they ll be personally enriching. She says she recently spent about $500 to work on a project collaborating with a couple of other young women composers. She didn t get paid, but she says she s generated more than $2,000 in income through the project by making new connections and using it as a sample of her work.

Having a long view is really important, Pellett says. She evaluates potential projects on three criteria: making money, building her career and personal invigoration. If she can accomplish two out of three, the project is worth her time, she says.

Rebecca Pellett (Photo courtesy of Rebecca Pellet)

With CD sales slipping, many of today s most successful musicians are making a substantial portion of their money from ancillary promotional deals. Recorded music is only one part of their financial portfolio, says Todd Alan, the vice president of the entertainment division at Westwood One, a provider of network radio programming. Curtis James Jackson III, better known as 50 Cent, has earned millions from his brands, which include his own flavor of Vitamin Water (Formula 50) and his own scent of Right Guard body spray (Pure 50). Whatever the connection, the increasing importance of these types of deals means artists need to carefully evaluate contracts to make sure they re not giving up potential revenue streams.

Working with a reliable lawyer and accountant will help musicians negotiate these deals, but some basic skills are necessary. The same stuff that you learned in elementary school is critical to being a successful musician, says Bernard Resnick, an entertainment, communications and sports lawyer based in Philadelphia. In other words, reading business papers carefully, writing concisely and doing basic math can go a long way toward building a viable business.

Long before they get to the point of evaluating contracts for multifaceted business deals, up-and-coming bands often run into a problem that may be familiar to small-business owners: trying to collect on unpaid invoices. Many bands don t get paid by venues where they ve performed.

If a band has been hoodwinked by a club, persistence is probably the only solution, Dusek says. The amount of money a band might be owed could be recovered in small claims court, but the band would have to pay a fee, Dusek says. The better answer is to check out venues and other business partners ahead of time, vetting them before you sign a contract. It s better to work for people you know and who have a track record of paying people, he says.

Curtis James Jackson III, better known as 50 Cent (Photo credit: Getty Images)

Many bands are making money by giving away what they make music, in the form of CDs, digital downloads or even live performances and charging for other merchandise like T-shirts.

Many bands report that the revenue from the merchandise is actually greater than the live fee for the music that s played, Sharpe says. If a small band is expanding its audience by giving its music away, the benefits may outweigh the costs.

More-established artists can also profit by looking for revenue streams beyond the obvious. Music used to be the destination, it used to be the engine that drove the train in entertainment, Resnick says. Today music is not the engine, it s just a car in that train. Resnick encourages his clients to pursue deals licensing their work for use in movies, TV shows, videogames or cellphone ringtones. Owning the intellectual property is the way of the future, Resnick says.

Led Zeppelin T-shirt (Photo credit: Getty Images)

For a band struggling to find an audience or a business in search of customers, there is a temptation to start and stop with a Facebook page, but a lot more work is required to turn a grassroots marketing effort into an effective business strategy.

Thanks to social networking, reaching people is easier than ever before, says Lawrence Gelburd, an instructor at the Wharton Small Business Development School and a former record producer. The good news is, it s cheap and everybody can do it and the bad news is, it s cheap and everybody can do it, Gelburd says. Finding a niche to target within a larger market may be critical to standing out in a crowd, he says.

Business owners who once dismissed social networking as a fleeting trend are changing their tunes, says Todd Klingel, the president of the Minneapolis Chamber of Commerce. The passing fad thoughts are now changing to, Oh, darn, there is something going on here, he says.

Web-based tools help lower the tech barrier to entry and allow bands and businesses to track the results of their efforts. When Family Records artists Casey Shea and Wakey!Wakey! had their songs featured on the season finale of One Tree Hill, the company watched the episode together to celebrate but also to gather data on how the show impacted its bottom line. Verhoeve says he watched the episode with his laptop out, monitoring a Google alert set up to catch mentions of the bands online, tracking iTunes sales of the featured songs, and following the conversation on Twitter so he could quickly jump in and correct any misinformation.

Mike Grubbs of Wakey!Wakey! (Photo credit: Victoria Jacob)

Establishing a band or a business can be daunting, but there are many resources available for advice and support. An apprenticeship can offer real-world knowledge before getting started on your own. I wouldn t have been able to tell anyone what a day in the life of a musician was like before apprenticing with another composer, Pellett says. The experience taught her to be versatile and willing to wear a number of different hats -- as a composer, orchestrator or recording engineer -- to help build her business, she says.

An apprenticeship may not be right for everyone, but it still may be worthwhile to look for ways to partner with a more established band or business. So many start-ups and bands want to do their own everything, Gelburd says, but a lot of them would be a lot better off partnering with someone who s already farther down the line. Instead of trying to create your fan base from nothing, go out and find somebody who s already done it.

Many of the American Federation of Musicians 240 local chapters can set musicians up with mentors or offer sample contracts to musicians considering a variety of business arrangements. For other business owners, a local Chamber of Commerce or a nonprofit organization like SCORE could offer similar resources.

Lawrence Gelburd (Photo credit: Getty Images)

Aspiring musicians may dream of quitting the corporate world and starting a band but the band itself may need to incorporate. Verhoeve says all the Family Records bands have formed LLCs to pay taxes properly on any income.

Creating a legal framework also prepares a band for any potential personality conflicts down the road. Bands must create an agreement that defines what happens if the bass player leaves, who owns what, who owns the band name, and so on, Sharpe says.

We often hear that after years of really working at it, it seems like it s harder to keep a band together once it becomes successful, Sharpe says.

Any business owner working with a college roommate or family member should be protected in case personal conflicts impact the business, or vice versa. And the bottom line has to come first when making hiring decisions.

Hiring the smartest people you can find is key to running a successful business, Resnick says. If your brother-in-law has no experience in professional management of a recording artist, [he s] the last person you should have on your team.

Yoko Ono and John Lennon (Photo credit: Getty Images)

A successful artist who will stand out in a crowded marketplace should always be thinking about how each song and album helps create a brand. Verhoeve says he encourages the artists he works with to think about creating an album with an overall theme, message or story that reinforces the band s brand. Casey Shea, an artist who works with Family Records, often makes short videos for the web that deal with the issues of the day videos that might seem irrelevant to creating and selling music, but that help him reach out to new audiences online.

It doesn t really matter what he talks about in those videos; what you re getting is Casey, Verhoeve says. It s just a way to extend the brand and try to get it in front of as many eyeballs as possible.

As the face of a brand, a successful musician might consider creating a kind of character that becomes their public, branded persona. You have to understand your market and create a character and an image that will react with the fans, Resnick says. He cites a female MC he works with, Steph Pockets, who he says has created a sweet, upbeat character that resonates well in Japan, her target market.

Those who spend the time to step back to understand not just what they re creating, but how they re going to sell it, are the ones that will have success in the future, Resnick says.

Casey Shea (Photo credit: Beatrice Evangelista, courtesy of Family Records)

"American Idol" is the exception to the rule. It s not easy to come out of nowhere and become a sudden success. When people see a new artist or a label that they ve never heard of, I ll guarantee you that there s several years of hard work without much success behind that, Verhoeve says.

Much like building a small business, building a band is a risky venture with a high risk of failure. It s typical for a band just starting out to lose money at first, Alan says. It s going to operate at negative cash flow until you get a certain critical mass, he says. That s why it s so important for people to have a vision for themselves.

Everyone -- from the rock band to the largest business -- does need to rethink their brand and their viability in the current challenging economic environment, Klingel says. Now, when its viability is being tested, is when you find out if it s a fun passion or something that is a real business.

Lakisha Jones and Simon Cowell (Photo credit: Getty Images)