Most artists never have record labels lining up to sign them. More likely, only one label will be interested in signing an artist at any given point in his/her career. Nonetheless, an artist will want to sign only if the label is reputable, experienced, and knowledgeable about the music business. I advise artists that it’s better to remain unsigned than to get trapped in a bad deal with a record company that can’t (or won’t) help to advance their careers.
What does it mean for a label to have a good reputation, and why is it important? If the record company is not able or willing to live up to its responsibilities (i.e., produce a good record and then promote and sell it), the artist will be out of luck, and his/her music career will be stuck in neutral. This can happen even to established artists, but it can be especially damaging when an artist is just getting started. If it happens to the artists you sign, you’ll develop a bad reputation as a label that does not help to advance your artists’ careers.