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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.
Who is this business right for?
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.
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 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.
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.
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 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 steps to start a social media influencer business?
Once you're ready to start your social media influencer business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your social media influencer business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your social media influencer business keeps your finances organized and makes your business appear more professional to your customers.
- 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.
- 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.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- 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.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I 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.
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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 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.
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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.
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.
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, check out our informative guide, 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.
How much can you charge customers?
How much social media influencers charge depends on how many followers they have. Instagram.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.
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.
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.