Start a fact checking business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your fact checking business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a fact checking business?
Opening a fact-checking business doesn’t require a large initial investment — at least if you plan to do the work yourself. You just need a phone and a computer to get started. But, if you want to make more rapid progress, you may find it helpful to have skilled employees and/or partners to cover areas in which you lack expertise. You can only do so much on your own.
Keep in mind that while you may only need $2,000 or so to purchase your basic equipment like a laptop and phone, you’ll need a way to pay your bills while fact-checking. You can certainly work another job while you get started, but your progress will be slow.
What are the ongoing expenses for a fact checking business?
Fact-checking businesses' ongoing expenses can vary considerably, depending on each organization’s size and structure. If you and your employees all work from home, for example, you won’t need to pay for office space. Even if you do rent office space, you can expect your biggest costs to be labor-related. The average salary of an entry-level fact-checker is $30,000 to $35,000 per year.
Who is the target market?
Some fact-checking businesses seek to partner with media organizations, social media platforms, or government entities. Others aim for a direct relationship with the public. Before you get started, you’ll need to create a detailed business plan that establishes how you’ll fund your organization and make a profit if you plan to run a for-profit business. While fact-checking businesses can target multiple potential markets, it’s usually best to focus on just one as you get your business off of the ground.
How does a fact checking business make money?
Many fact-checking businesses operate as nonprofits and fund their operations through grants, endowments, and similar funding sources. But, some fact-checking organizations do operate as for-profit enterprises like Snopes and PolitiFact. Businesses like Snopes make much of their money from ad revenue generated by their websites. Because everyone knows they can go to Snopes to check facts, the business gets plenty of online traffic. That makes Snopes’ ad revenue a significant income generator. One other common way for fact-checking businesses to generate revenue is to partner with larger businesses interested in checking facts – like social media outlets.
How much can you charge customers?
There’s very little information available online about what smaller fact-checking organizations charge their customers. But, the larger organizations publish their earnings from one of the biggest customers in the industry: Facebook. According to the Columbia Journalism Review, Facebook paid Snopes $100,000 in 2017 and $406,000 in 2018. Facebook also paid $188,881 to FactCheck.org in 2018 and another $242,400 in 2019. While these figures may not help you determine what to charge your first client, they do give you an idea of what organizations at the top of this industry can earn.
How much profit can a fact checking business make?
Most fact-checking organizations operate as nonprofits because it’s difficult to make a lot of money fact-checking. If you choose to start a nonprofit because you have a passion for finding the truth, your main focus will involve finding funding for your work from various sources. As long as you can pay yourself and your team a living wage and keep the lights on, you’ll be doing well.
If you instead want to start a for-profit, fact-checking business, it’ll likely take time to start turning a profit. As noted above, the biggest names in fact-checking earn $100,000 to $400,000 per year from large, corporate clients.
How can you make your business more profitable?
The most direct way to boost the profitability of a fact-checking business is to build a stellar reputation. If your target market can identify you as a shining star of fact-checking, you'll be much more likely to secure clients and/or funding. Your target market also can have a significant impact on your profitability. Large corporate clients often pay more than you’d earn from advertising revenue, for example.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your fact checking business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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How to promote & market a fact checking business
The first step in promoting a fact-checking business is to create a portfolio of quality, fact-checking work. Then, you’ll have something to show members of your target market when they visit your site. If you plan to market to the general public, you also can create social media posts about your services. If you instead plan to target specific organizations, you can advertise on LinkedIn or in publications where your potential customers will likely notice your business.
How to keep customers coming back
The most important part of fact-checking is to maintain a reputation for honesty and accuracy. If customers start to suspect you operate with a significant bias or publish inaccurate information, they may leave your business behind and never return. That’s why it’s so important to start your business with a plan for maintaining your reputation and stick to that plan even when it’s difficult to do so.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Fact Checking Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you have a passion for facts and a willingness to conduct thorough research on a topic, you might be an ideal candidate to start a fact-checking business. Journalists or former journalists operate some fact-checking organizations while individuals with backgrounds in the social sciences run others. But, even if you don’t fit into either of these categories, nothing will prevent you from entering the fact-checking arena if you can contact experts, conduct research, and write detailed explanations of your findings.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a fact checking business?
A typical day at a fact-checking business primarily focuses on research. Getting the facts straight takes considerable time and energy because you must identify potentially false claims, determine a plan of action to discover the truth, and then do the legwork to execute that plan. This may involve making multiple phone calls, conducting interviews with experts, pouring over data, and more. Then, once you have all of your information ready, you must write your argument for your readers.
What are some skills and experiences that will help you build a successful fact checking business?
Several skills can help you build a successful business as a fact-checker. First, you’ll need solid research skills — something an academic background or journalism experience can help provide. Strong interviewing skills also can prove useful. Thoroughly verifying facts on complex subjects often requires talking to experts so you’ll need to excel at finding and interviewing those experts. Finally, writing skills will help you present your arguments effectively in your writing.
What is the growth potential for a fact checking business?
While growth potential does exist for fact-checking businesses, the exact potential remains unclear. The number of fact-checking organizations grew by 26 percent from 2018 to 2019, according to Poynter. But, the rising number of these businesses doesn’t tell the whole story. While their number continues to increase, it’s still unclear how many will be able to fund their operations in the long term. Most operate as nonprofits because it’s challenging to generate significant revenue from fact-checking. It is possible, as Snopes and PolitiFact demonstrate, but not necessarily easy.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a fact checking business?
You only have to spend a few minutes on social media to recognize that a fact checker’s work never ends. The number of potentially false claims always will outstrip your fact-checking efforts, which is why you need to establish some criteria for how you’ll choose your tasks. If you simply log onto Facebook and plan to pick the first thing that catches your eye, you may soon feel overwhelmed. Instead, determine the mission of your organization before you get started. Are you going to focus on political discourse, health claims, or another topic? Create a plan so you stay on track.
Reputation represents another important factor for a fact-checking business. It’s very important to set the right foundation for you and your team. This foundation might include a set of rules by which you operate that you publish on your business website for anyone to see. You can research other fact-checking organizations to learn how they maintain a respectable public image and model your business after them or create your own methods from scratch.
How and when to build a team
Some businesses are easier to run solo than others. Fact-checking isn’t particularly well-suited to a solo operation. This type of business just involves too many tasks, and there’s not enough time in the day for one person to complete them all. Going it alone, you also may quickly run into difficulties due to your lack of experience or expertise in much-needed areas. Fact-checking businesses often employ journalists, social scientists, and other experts so they can complete their work as quickly and as accurately as possible.
If possible, aim to start your business with at least one or two other people who have strengths in areas you need. If that’s not going to work, then make it your goal to get to the point where you can hire help as soon as possible.