Start a live streaming 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 live streaming 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 live streaming business?
A high-speed Internet connection costs about US$50 to $100 per month. You will also need a gaming computer for about $1,000, with a high-resolution monitor(s) that costs around $350 each and game players with controls (Xbox, Wii, Sony PlayStation) for each type of game you want to play, which are around $300 to $400 each.
There is a 30-day free trial for Twitch.TV and after that, there is a monthly subscription fee of $5.99 to $10.99 per month depending on the features desired.
What are the ongoing expenses for a live streaming business?
The ongoing expenses are a high-speed Internet connection, updating gaming equipment and a computer with a high-resolution monitor(s), and buying the games (although sponsored streamers can get games for free). This is about fifty to several hundred dollars per month.
Popular streamers also typically hire one or more assistants to help manage the workflow of communicating with fans, talking with sponsors, updating website information, setting up paid appearances, and organizing attendance at conventions and gaming tournaments. Assistants make about $250 per week for part-time help.
Who is the target market?
The customers are video game enthusiasts who want to learn how to become better players by watching how professionals play certain games.
How does a live streaming business make money?
The revenues come from advertisements, profit-sharing from channel subscription fees, sponsorship, in-person appearances at events, and earnings from winning game tournaments.
How much can you charge customers?
Streamers who have enough followers to qualify as partners are allowed to have a subscription button on their individualized web page within the streaming system. Subscribers to their streaming channel pay a monthly fee of $4.99 for that certain channel and get to have special features as well. Around 50% of the $4.99 goes to Twitch.TV, while the other 50% is paid to the streamer.
Viewers can also give donations to the streamers they like. Streamers who are top-rated, with lots of followers, can get fees from sponsorship just like professional sports players.
How much profit can a live streaming business make?
Professional streamers, who have enough subscribers (500+) to become partners, make US$3,000 to US$5,000 per month for full-time streaming. This means playing at least 40 hours each week. Additionally, they earn a portion of the advertising revenues which equates to about $250 per 100 subscribers for each month. The highest paid and most popular streamers make over $300,000 per year.
How can you make your business more profitable?
In addition to having a streaming presence, it is important to create a following by posting videos on a YouTube channel. There are two video gamers in the top ten YouTube channels and they earn millions of dollars per year. Here are the latest figures reported by Forbes of the top ten highest paid YouTubers that are also gamers (at least part-time):
Mark Fischbach who goes by the name Markiplier on YouTube brought home a cool US$5.5 million during 2016 for his video commentaries on video games, along with his other eclectic content.
The Swedish PewDiePie who shows video snippets of himself playing video games and his comedic sketches was the top earner on YouTube during 2016 with an astounding US$15 million in revenues. He had over 13 billion views on YouTube during 2016 and lots of profits from his best-selling book, entitled “This Book Loves You.” He also promotes mobile games. His latest game is “Tuber Simulator.” It is the number one mobile game app in the Apple app store. It was so popular it crashed the servers due to the excessive demand.
Streamers who also become YouTube celebrities can make a lot of money from advertisements, sponsorship, endorsements, public appearances, and winnings in professional gaming tournaments.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Live Streaming Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
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 live streaming 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.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Live Streaming business
- Check with your town, city or county clerk’s office
- Review Federal and State licenses and permits on the U.S. Small Business Administrative website.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Intellectual Property Agreement
This live streaming company will operate through a partnership with a larger streaming platform which initially requires a prerequisite membership account to be able to post live streams.
- By agreeing to the Terms and conditions of the Streaming Site (I.E Twitch), you are agreeing to allowing users to view your intellectual property (Live Stream) even after the time that you post it.
- Once the Partnership is established, this agreement holds a higher priority due to money being exchanged for a advertising space on the page where the video meets a minimum average number of viewers.
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 live streaming business
Social media is an effective way to promote your gaming skills. Joining Internet associations of video gamers and participating in game forums are great ways to establish a network of friends that like the same games. Another good strategy is to play games online with as many people as possible, in order to to get good at them and build up a following of those who respect your gameplay.
How to keep customers coming back
Making success as a streamer is about being popular on the Internet. Be respectful of your audience and play the games when you announce in advance that you will on the times that you say you will.
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 Live Streaming 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?
One prerequisite for a successful live streaming business is to have top-level gaming skills in order to gain a following of viewers who will take time out of their day to watch and learn gaming styles from the streamer.
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 live streaming business?
Each day a professional streamer needs to answer the comments and emails from fans and make updates on Twitter. Then, the streamer needs to update news and perhaps make a posting of previous game play on social media. After this, the streamer plays video games live for the audience to watch according to a preannounced schedule. The streamer may play continuously for many hours (up to 18 hours in a row).
The average gaming session is at least four hours long. It is best to play continuously to keep viewers interested and take as little time out for intermissions as possible. The most popular streamers usually eat and go to the bathroom without stopping the gameplay. The typical times of day for gameplay start in the afternoon and continue until late at night or even until the next morning.
What are some skills and experiences that will help you build a successful live streaming business?
The ability to play the video games extremely well is critical, along with the ability to make interesting comments that keep viewers intrigued. Moreover, having excellent skills at becoming an influencer on social media will help bring more viewers to your streaming channel. It helps to be very friendly with popular streamers. Some of the nicer ones will help smaller streamers gain an audience by making recommendations to their subscribers to check out the newbies’ streams.
What is the growth potential for a live streaming business?
Using Twitch.TV as our example, there are about 14,000 professional streamers on the system. Each month, Twitch.TV has about 100 million unique visitors. Dividing those visitors by the number of streamers, shows there are about 7,000 visitors per streamer. This number continues to grow each year.
Not sure if a live streaming business is right for you? Try our free Business Idea Generator and find your perfect idea.
TRUiC's YouTube Channel
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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 live streaming business?
Successful live streamers are highly strategic and effective gamers. This allows them to excel above the competition. Others may be less adept gamers but capitalize instead on their unique personality traits, including a humorous voice, or offering clever commentary on their games.
How and when to build a team
The time to add an assistant is when the maintenance of the fan communication is interfering with the time needed to play the games online. Most streamers get one of their friends to help them as they become more popular.
If a streamer becomes a top earner there is plenty of money to share with an assistant. Working as a professional streamer, playing your favorite videos games with your best friend helping you is a dream job for many people. You have to be very good and stay motivated to be your best because the competition from other excellent game players is severe.