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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 step guide to starting your social media marketing business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
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 long it will take you to break even?
- 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 marketing business?
Most people can get started with a computer, Wi-Fi, and small advertising budget. If you’re planning on incorporating graphic design skills into your business, you may need additional equipment to maximize your impact. There is no need to rent out a professional space though unless you’re planning on offering full agency services.
What are the ongoing expenses for a social media marketing business?
Owners will have to account for administrative costs (including computer equipment), as well as advertising and travel. They may also want to invest in ongoing education. As consumer preferences change, so too do platform algorithms and configurations.
Who is the target market?
The target market is anyone who wants to advertise themselves or their cause. This could be commercial companies, non-profits, or even private parties. You may end up working for an up-and-coming socialite who becomes the next Kim Kardashian!
How does a social media marketing business make money?
Social media marketers charge for their services in a variety of different ways. They may charge per post, per campaign, per hour or per project. For those who are just getting started, they may even consider charging on a commission-only basis. Start-up and incidental costs in this profession are low, so marketers are typically charging their preferred rate based on the scope of the work.
How much can you charge customers?
A full-time social media specialist will earn an average of $50,000 a year. Owners will want to structure their rates so they can pay for all relevant business expenses (including healthcare, transportation costs, etc.), plus additional compensation for their time. It's not unusual to see people charging between $5 and $10 for a single post, or up to $75 an hour for a full campaign.
How much profit can a social media marketing business make?
Top-paid social media consultants easily make more than $100,000 a year. But the amount you make is highly dependent of the amount your clients make. The more success you bring to them, the more you can demand from both new and existing clients alike.
How can you make your business more profitable?
Social media marketers may want to consider branching out to become full advertising consultants. Or they may choose to start their own social media consulting business on the side where they let other hopeful social media marketers know how to get started.
What will you name your business?
Choosing the right name is very important. 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 prevents you from being personally liable if your social media marketing business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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?.
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.
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.
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 social media marketing 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 marketing 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
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
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.
How to promote & market a social media marketing business
Most companies need social media to thrive, but that doesn’t mean that all companies care about social media. A CEO may recognize that his services need to be advertised on Facebook, but they may have no interest in learning about the platform's features or benefits. Social media marketers will need to be able to work with all types of populations in order to be successful.
Besides social media, marketers can turn to paid Google ads to get the word out about their services faster. Quality content is always going to be the best type of marketing, but it can also take months or years to develop (and most startups don’t have the luxury of time.) And like all every other kind of business, owners should be prepared to network whenever they can. This includes scheduled events but also cold-visiting companies in your area to drop off business cards or set up meetings.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Meeting deadlines, creating creative campaigns, and maintaining a professional attitude are all excellent ways to keep customers coming back. However, the best way to inspire return clients is to increase their ROI based on your social media strategy.
STEP 9: Establish your 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.
Start A Social Media Marketing Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
People who love social media and marketing will thrive in this business. However, this love must extend beyond just checking Twitter and Facebook every 15 minutes. If you want to start your own social media marketing business, you should know how people interact with different platforms, where your target demographic is most likely to live, and what type of content will spark the most interest. You should also know how (and why) different platforms evolve over time.
What happens during a typical day at a social media marketing business?
This type of niche marketing demands a lot of content. Owners will spend a lot of time brainstorming, drafting, and creating campaigns that will drive a brand’s message home to their audience. The other part of social media involves learning more about the background and reputation of your clients.
What are some skills and experiences that will help you build a successful social media marketing business?
Those who have a lot of experience studying social media will do well in this business. A marketing degree may help, but it doesn’t guarantee success. What companies are really looking for is someone with proven success when it comes to engaging their audience.
Most people love social media, but very few understand the nuances behind it. They may puzzle over why one campaign succeeded on Twitter but failed miserably on Instagram. Marketers must have an innate sense of how audiences are interacting with individual posts in order to determine their marketing strategy on a larger scale.
What is the growth potential for a social media marketing business?
The forecast is excellent for social media marketing, especially considering its popularity is only proliferating. While individual platforms may rise and fall, the base audience of social media users is only skyrocketing worldwide. This mass adoption means huge opportunities for those who can find ways to connect with an ever-jaded population. People want less advertising and more substance, and they're looking toward social media to get it.
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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.
What are some insider tips for jump starting a social media marketing business?
The best way to start your social media business is by creating a killer social media campaign for yourself! Decide who you want to target and then start using different platforms to get more eyes on your website. Optimize and promote your posts to further generate more publicity, and make sure you have a solid mobile presence so people can find you via tablet or smartphone.
Make up your own companies and campaigns to use as samples for your portfolio and ensure you showcase your ability to use different voices to reach out to a variety of demographics within the same niche. After all, a retiree buying a home is going to have a wildly different outlook than a millennial buying a home.
How and when to build a team
There is no need to build a team at first, especially if you only have one or two clients to start. Once you have more clients than you can handle, look for an assistant who can support your campaigns with new ideas and content without changing the tone or the brand message.