As times change, so too must the tactics we use to connect to the world around us, including our potential customer base. To that end, our collective approach to marketing has evolved tremendously just in the past few years.
Thanks to technology, we have more options at our fingertips than we ever could have thought possible. One of the clearest examples of this is the emergence of the social media influencer.
Although some of these individuals operate as part of a larger organization, many of them have developed enough of a presence on platforms like Instagram, YouTube and Twitter to essentially make each influencer a business unto themselves.
Yet, as the income (often through multiple revenue streams) begins to build, influencers — perhaps like you — must decide if the time is right to register their influencer business as a limited liability company (LLC).
In part due to the notoriety and internet fame that it brings, the notion of being a social media influencer has become aspirational for many entrepreneurs. After all, who doesn’t love the idea of having thousands or even millions of other people not only willing to listen, but actively interested in what you have to say?
But, because of the impact they can make, the seemingly wild amounts of income they can potentially earn and the many instances of fraudulent activity out there, it appears that stricter regulation may be in the cards for the influencer community.
What does this mean for your decision to LLC or not to LLC? Well, if nothing else, you may wish to reconsider how important it is to you to be recognized as a legitimate business. After all, social media influencers are being monitored more and more closely all the time by government agencies like the Federal Trade Commission (FTC).
Since there is clearly money to be made with your influencer business, you’re far better off taking the preemptive measure of registering as an LLC before you wind up in legal hot water.
Benefits of LLCs
If you think an LLC is the next logical step for your influencer business, you’re probably wondering what the key benefits are. While you might opt for a C Corporation or S Corporation, you will likely find that the distinctive set of advantages offered by an LLC will cover most of your needs.
- Limited liability: The first of these is implicit in the name itself. LLCs are, of course, known for providing “limited liability” to a “company.” This means that because you’re operating as an LLC, your personal assets remain off-limits in the event that you find yourself the subject of any legal action. We’re sure many influencers who have contended with such issues wish they had the protection of an LLC.
- Ownership: While many other types of businesses have more stringent requirements with regards to ownership, an LLC gives you more room to handle your business in a way that is most comfortable for you. For influencers who may be one-man or one-woman shows, an LLC is ideal. Larger companies can use the structure to share ownership with stakeholders, but LLCs can be any size. In fact, many solo entrepreneurs go this route.
- Credibility: We alluded to this a bit earlier, but in a world that is continually ravaged by fraud and other misdeeds, your influencer business can use all the bona fides it can muster. If having an LLC in your name means the difference between landing that critical partnership or watching your business plateau, it’s certainly worth making a little extra effort to ensure that you’re as legitimate as possible in the eyes of possible collaborators.
- Tax benefits: Operating as a business means that tax season goes a lot more smoothly too. LLCs serve as pass-through entities, meaning that they are waived from paying corporate income tax and are only responsible for the owners’ individual tax returns. As the head of an LLC, you also retain some flexibility regarding how you file your taxes, including as an S Corporation. If you play your cards right, you might be able to save even more during tax time than you initially thought.
Your Next Move
Whether or not you decide to incorporate, at least you’re beginning to consider what the next logical step is for your influencer business. Although access and opportunity are perhaps at an all-time high due to today’s technology, you still need to remain vigilant about how to protect your own interests, preserve the success you’ve already achieved and set the stage for what the future might bring you.
In instances like this, it’s especially beneficial to have someone like Incfile on your side. We work with small businesses of all kinds to empower professionals to create a solid foundation and expand on it for years to come. To learn more about how we can help, check out our website and get started today!