Influencers are making a lot of money in today’s economy; this is great. There are many ways influencers are making money whether its merchandise, subscriptions, memberships, sponsorships, or advertising. Yet there are other aspects to running your business than making money. There’s marketing, operations, and administrative things to do. As the CEO of You, Inc., you are in charge of it all including the seemingly boring administrative tasks. Here are some high level things to remind yourself of as the CEO and person that is responsible for it.
This is one of the two things you’ll never escape. (In case you need to be reminded, the other thing is death). While we are not lawyers or experts (the US tax code is especially archaic and complicated), we do know that you have to pay your taxes and if you don’t you’ll be penalized for the amount that you owe plus interest. The interest rate of 3% is enough of an incentive that you don’t want to owe too much after the fact.
The IRS does allow you to pay your taxes in quarterly installments via their website, so after you take in your revenue from all of your sales, keep a portion to the side to pay Uncle Sam (or whomever is the taxing authority wherever you might be living).
Liability (Shield Your Money)
The world (especially the US) has become very litigious. You need to protect yourself. The best way to do that is to form a company around yourself. There are many different options from LLC’s (Limited Liability Companies), to C-Corporations, to S-Corporations, to partnerships and more. The key to this is that it shields you from liability and lawsuits (hence the term limited liability).
The other things to look at are how you are taxed. C-Corps are treated like independent entities so you might be double taxed while the other forms flow back to the shareholders. Each one has its pros and cons that you should consult with your accountant and lawyers about. This isn’t advice but most creators have LLCs.
Invest Your Money
You just sold a boat load (literally) of t-shirts. After expenses you have a million dollars. What are you going to do? Well, if you got anything out of this article, you’d set aside a few dollars to pay your taxes, but then what are you going to do with the rest of it? One thing we do know: Don’t go out and buy a Lamborghini. Invest it back into your enterprise or if you think you’re overextended invest in other assets, whether that be real estate, stocks, collectibles, or bonds.
You don’t want to end up like many pro athletes: after their time in the spotlight is over, they realize that they don’t have anything left over. Plan for your future and watch your assets grow over time (and while investing is preferable to saving where rates are currently less than 1%, saving is better than blowing it on a Lamborghini)
Taxes, shielding your money, and growing your money are the bottom line to being an administrator of You, Inc. Find someone you trust to give you personalized advice on each of the above. Most likely each topic will require a different specialist. One of these: your accountant, CPA, tax lawyer, or financial advisor can give you advice on each of these.
Regardless, while you are having fun building your business, this is a reminder that the nuts and bolts are just as important to ensure the music can keep playing and the party can continue. Have any stories for us? Drop us an email and let us know what decisions you made on the above topics.