As traditional media declines and social media emerges, marketers are increasingly incorporating social media influencer marketing into their strategies. Ste Davies reports that this is both a smart and popular advertising strategy, with 94 percent of marketers saying it’s effective and an increasing number of companies planning on using it through 2020.
Marketers pay social media influencers because they’re the gateways to their followers. When stars on Facebook, Instagram and other platforms post about a company’s service or product, followers see and engage with whatever is being promoted.
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Learn how to start your own Social Media Influencer Business and whether it is the right fit for you.
Start a social media influencer business by following these 10 steps:
- Plan your Social Media Influencer Business
- Form your Social Media Influencer Business into a Legal Entity
- Register your Social Media Influencer Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Social Media Influencer Business
- Get the Necessary Permits & Licenses for your Social Media Influencer Business
- Get Social Media Influencer Business Insurance
- Define your Social Media Influencer Business Brand
- Create your Social Media Influencer Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your social media influencer business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
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 social media influencer business?
The startup costs for a social media influencer business are minimal, and it may even be possible to start a business for free by using library resources and a friend’s camera. Influencers need little more than a computer, internet connection, and camera or smartphone to get started.
Many influencers use software, some of which costs money. There are plenty of free software options that influencers who don’t have any capital can use at first, though. HootSuite and Buffer are two fo the most popular tools used for managing profiles and scheduling posts. They both have free and paid plans.
What are the ongoing expenses for a social media influencer business?
The ongoing expenses for a social media influencer business are minimal. The main ongoing expenses are the cost of internet access and any paid software that’s used.
Who is the target market?
Social media influencers try to appeal to as wide an audience within their niche as possible. Marketers who hire social media influencers may sometimes ask about the demographics of an influencer’s followers, but the sheer number of followers is usually more important.
How does a social media influencer business make money?
Social media influencer businesses usually charge marketers for posting about a company’s services or products. Marketers might purchase a one-off post or set up a more lengthy campaign that involves several posts.
In some cases, influencers may receive a commission for every pre-defined engagement that a post leads to. Such a commission usually replaces a posting fee.
How much can you charge customers?
How much social media influencers charge depends on how many followers they have. Influence.co compiled data on Instagram influencers that bears this out. Influencers with:
- Fewer than 1,000 followers charge $82.60 per post on average
- Between 1,000 and 9,999 followers charge $107.50 per post on average
- Between 10,000 and 99,999 followers charge $240.20 per post on average
- More than 100,000 followers charge $763.30 per post on average
Rates for other platforms vary, but the correlation between followers and fees remains true.
How much profit can a social media influencer business make?
According to Davies, social media influencers’ earnings range from very little (“pocket change”) to seven-figure annual revenues. Whether an influencer is able to make a living depends on how many followers they have and what niche they’re in. Some industries (e.g. fitness) pay better than others (e.g. tea).
In addition to monetary revenue, the most successful influencers also get experiences they otherwise wouldn’t be able to do. Often, experiences are offered so that influencers can post about them.
How can you make your business more profitable?
Social media influencers can add another revenue stream by including affiliate links that pay a commission if anyone buys something through them. This is an easy way to monetize non-sponsored posts.
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 Social Media Influencer 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 social media influencer 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:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
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
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report 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 best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
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 social media influencer business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
Social media influencer businesses should consider requiring clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and so on.
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.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a social media influencer business
Social media influencers grow their audiences by regularly posting content. Posting with regularity is more important than being creative or noteworthy. Influencers should strive to be unique whenever possible -- but not at the expense of regularly posting.
How to keep customers coming back
Influencers should be experts in their respective niche so that they stand out from others social media personalities. Expertise may be established by authoring books, earning relevant certificates or degrees, and offering informative insights.
Another good way to keep your customers is to build trust; to do that, you can get your Instagram account verified. What this means is that you are proving to your customers that you are the original owner of your Instagram business account, which will help build trust and notability. Check out our How to Get Verified on Instagram guide to learn more.
In conclusion, to retain your customers, stay relevant and be trustworthy! Know where your market is going before it gets there. Use relevant hashtags. Find out what your customers have to say and prove to them you are a reputable business.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
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. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Social Media Influencer Business in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
Anyone who enjoys spending time on social media platforms and is passionate about a particular niche might enjoy being a social media influencer. Influencers must know and love their niche, for they talk about it constantly on the platforms they use. They also have to like social media itself, as they’ll be spending hours on it day after day.
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 social media influencer business?
The most time-consuming aspect of running a social media influencer business is creating original content. After coming up with an idea, actually producing content might require creating a meme, staging a photo, or making a video. Influencers might occasionally post a quick update that doesn’t require much planning, but more intentional posts are needed on a regular basis to keep a loyal following.
When not creating original content, influencers spend their time curating and reposting others’ content, interacting with followers and finding marketers to work with.
What are some skills and experiences that will help you build a successful social media influencer business?
Because business owners are paid to post advertisements, they should be well acquainted with the nuances of social media marketing in general and influencer marketing more specifically. There are several books, such as The Road to Recognition and Influencer, that cover these topics. Additionally, a number of organizations offer influencer marketing conferences.
What is the growth potential for a social media influencer business?
One of the metrics closely followed in this type of marketing is the number of followers a social media influencer has. The most successful have millions of followers. For example, Zach King, and Huda Kattan have over 20 million Instagram followers. The smallest influencers have at least 5,000 followers.
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 social media influencer business?
Growing a social media influencer business takes time, and business owners shouldn’t look for shortcuts that jump-start the process. Specifically, buying or otherwise acquiring fake followers can backfire. Artificially inflated follower numbers may look good initially, but they lead to low engagement rates and potential penalties.
How and when to build a team
Most social media influencers run their businesses themselves, but some hire an assistant if the workload, demands, and revenue allow for it. An assistant can help create posts, interact with followers, and otherwise manage the profiles used.