Write a parody record label business plan. Whether soliciting to friends, family or financial institutions, any investor will want to know when and how he can expect a return on his investment. Sample plans are available for labels that work directly with artists and for record companies that work with multiple labels (see Resources).
Obtain financial backing. Compile a list of people or businesses that would be interested in investing in a parody record label. Friends and family or financial institutions are popular choices, but venture capitalists and benefactors are also options. The Association of Independent Music suggests using the music industry as a financing resource by approaching DJs, club promoters or former music artists because they are established in the music industry and may be looking to diversify.
Apply for licenses and permits. Based on your structure---sole proprietorship, partnership or limited liability corporation---you will need to obtain a federal tax ID number/employer identification number, register under an assumed name and possess a sales tax permit and/or vendor's license. Business.gov offers information and resources for acquiring licenses and permits according to your state's requirements (see Resources).
Protect the label's work and obtain the right to use the work of others. In the realm of parody, there is much debate; "Parody: Fair Use or Copyright Infringement" discusses the pros and cons of relying on parody rights under Fair Use (see Resources). Farm to Market Music's website clarifies music copyrighting.
Manufacture the mediums of your choice. You will need access to music production, graphic design, marketing/advertising supplies and music formats. If running a small-scale operation, using personal production facilities and design software may be sufficient. For larger operations, businesses such as Music Manufacturing Services are all-in-one for mass production; all-in-ones save you from having to piece together a team of legitimate industry individuals.
Distribute the creations of your parody record label in a variety of outlets. Putting out tunes is moot if the target audience cannot access them. Sell the products in local stores, on your company website or through a third-party online distributor. Don't be afraid to offer songs/albums in a non-physical format. Digital files allow for global distribution and give customers instant access to goods.
Market the parody record label through multiple promotional mediums. Print, radio and television are classic options. Current social media websites like Twitter, MySpace Music and Facebook are a means of attracting attention by using people you already know. Amazon and iTunes are online outlets that allow you to sell your music. Offer samples to potential distributors; often, distributors may do some advertising themselves to move the merchandise, which in turn draws more attention to your product, and thus your parody record label.