How Much Can You Make with a YouTube Side Hustle? Should You Incorporate Your Channel?


How Much Can You Make with a YouTube Side Hustle? Should You Incorporate Your Channel?

To say that YouTube is immensely popular would be an understatement. As seen in the chart below, Pew Research found that YouTube is the most used social media platform among U.S. adults as of February 2021.

A graph from Pew Research showing the social media platforms most used by American adults.


But for the entrepreneurial-minded, YouTube is more than a place to watch videos: It's also a potential source of revenue. But how much can you make with a YouTube side hustle, and should you create an LLC for your channel? Find the answers you're looking for ahead.

Why Start a YouTube Side Hustle?

You already know that YouTube has an astonishingly high number of users, but why should you use it to generate extra income?

For starters, YouTube is all about video, and video content is arguably the most engaging type of content you can make. You don't have to take our word for it — according to a large-scale 2021 study:

  • People watch an average of 18 hours of video content per week.
  • Consumers are twice as likely to share video content with friends than they are any other type of content.
  • 96 percent of consumers say they've watched a video to learn more about a product or service.

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And despite the massive amount of content YouTube already contains, the average number of views per video numbers in the thousands. For instance, videos in the entertainment category receive nearly 10,000 views per video on average.

For those looking to generate income from YouTube, every one of those views represents more earnings potential.

But why would you want to start a YouTube channel to begin with? There are myriad reasons, some of which include:

  • Creativity: If you enjoy creating videos about a certain topic, working with filming equipment or fine-tuning your software skills, then a YouTube channel can prove to be a fun, creative outlet.
  • Connection: One of the reasons that people love watching YouTube creators is the sense of connection and authenticity their videos offer. So if you want to connect with your audience in a more personal way, YouTube will be right up your alley.
  • Traffic: Do you have a website or other social media accounts that you want more people to see? Then a YouTube channel can serve as a great source of fresh traffic.
  • Reach: As one of the most popular social media platforms across all age groups, it can be a fantastic place to get in front of a new audience and expand your reach.
  • Sales: It turns out that creating YouTube content may be able to help you increase sales. According to a survey conducted by Google, 70 percent of people have bought from a brand after seeing it on YouTube.

How Much Money Can I Make On YouTube?

The amount of money you can make on YouTube depends on your acceptance into the YouTube Partner Program (YPP), viewer count and viewer engagement.

Let's start with YPP. Acceptance into this program is required in order to monetize a YouTube channel, and you can only be accepted if you meet several eligibility requirements:

  • Follow all YouTube monetization policies
  • Live in a place where YPP is available
  • Have more than 4,000 hours of watch time in the last year
  • Have over 1,000 subscribers
  • Have a linked Google AdSense account

how much money can you make on youtube

Once you've been accepted into YPP, you can place ads in your videos and start earning money from AdSense. It has a standard payout rate of 68 percent for all types of content, so if your channel earns $100 in ad revenue, then you'll receive $68 total.

The amount of ad revenue you receive will be based on each video's number of views. Most advertisers pay an average of $0.18 per ad view, so for every 1,000 video views, you can earn about $18. That's a cost per 1,000 views (CPM) of $3 to $5.

To quickly estimate how much money your channel could theoretically earn, you can try using a tool like Social Blade's YouTube Money Calculator. There, you can either import a YouTube channel or manually enter the details yourself to see an estimated earnings range:

The user interface of Social Blade's YouTube Money Calculator tool

Is Starting a YouTube Channel Worth It in 2021?

There's no denying that YouTube is already bursting with content: As of 2019, over 500 hours of content were uploaded to YouTube every minute, and given that YouTube has only grown in the time since, it's safe to say that that number has grown as well.

But that proliferation of content has also created an ad revenue boom. From 2019 to 2020 alone, YouTube's ad revenue increased by $4.623 billion. In other words, while there may be more YouTube channels to compete with, there's also more money to go around.

And even if you don't have the raw viewer count necessary to generate a significant amount of ad revenue, you can still make money from your YouTube channel by becoming an influencer and creating sponsored content. Some YouTubers even sell their own branded merchandise or get support directly from viewers via platforms like Patreon.

Moreover, YouTube is a fantastic platform for many different types of content. As seen on YouTube's own Explore page, some of the top categories are music, gaming, fashion, beauty and learning. But that's just the tip of the iceberg — other categories popular with Gen Zers and Millennials include:

  • TikTok compilations and reactions
  • Minecraft
  • Autonomous sensory meridian response (ASMR)
  • Roblox
  • Workouts
  • Tech, toy, shoe and mystery box unboxings
  • Shopping hauls and clothing try-ons
  • Top 10/best of lists
  • Meme compilations
  • Crafts and DIY
  • True crime

So if you're passionate about any of those content areas, you can use your YouTube channel not only to make money but also to share your expertise, put your creativity to good use and connect with people who have similar interests.

The bottom line is that if you want to make videos, are prepared to consistently generate high-quality content and are committed to growing your audience, it's absolutely worth it to start a YouTube channel in 2021.

Should I Get an LLC for My YouTube Channel?

As you accumulate more viewers, subscribers and ad revenue, you may start to wonder if you should create an LLC for your YouTube channel.

There is no hard and fast rule for the perfect time to start an LLC, but in general, it's a good idea to do so when your YouTube channel becomes more of a side hustle than a fun hobby.

That's because starting an LLC for a YouTube channel will grant you certain benefits when tax season rolls around. For example, you'll be able to write off any applicable purchases, such as:

  • Items purchased to create videos
  • Filming equipment
  • The computer you use to edit and upload videos
  • Video editing software
  • Internet costs.
  • Home office expenses.

Starting an LLC can also be beneficial because if your YouTube channel gets sued for something (such as copyright infringement), then only the LLC will be responsible, not you as an individual. In other words, a lawsuit might put your channel and its earnings at risk, but it won't jeopardize your house or car.

With YouTube's established monetization system, incredible popularity and potential for revenue generation, it's a fantastic place for creators to capitalize on their content. And when you're ready, creating an LLC can make your YouTube side hustle even more profitable.

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