Working as a content creator is a modernization of the standard 9–5 workday. As a result, it necessitates a creative blending of a few fresh financial tactics with time-tested advice.
The emergence of the creator economy has undoubtedly represented one of the most significant changes in the way markets operate. Because of social media platforms and the people we follow, a significant portion of the way we find products and decide whether to buy them has changed.
It has been well-documented how the creator economy has grown, and in recent years, it has unquestionably come into its own. One of the most significant industry statistics this year was the discovery by SignalFire that there are more than 50 million professional creators and an additional 139 million semi-pro creators worldwide. The market size of the creator economy exceeded $104 billion in 2016.
Without a doubt, creators are the new business owners in the social media era. However, it’s become increasingly obvious that creators frequently have concerns about the best ways to go about managing the financial side of their businesses as small- and medium-sized creators compete for a piece of the pie.
One of our users, a creator, confided in me last week that she has serious reservations about working as a creator full-time. Her path to becoming a creator followed a typical trajectory: It developed naturally over time. She began sharing her love of her primary hobby on social media because she was so passionate about it. As her fan base grew, businesses began contacting her, and she began to make more money. But she wasn’t ready for the extra work in administration or the new tax issues that came with the income. She had figured out how to make her creativity into a business, but she still had a lot to learn about money.
She expressed her appreciation for the chance to make money from doing what she loves, but she still views content creation as a side job. She’s still sorting out all the financial implications and is having difficulty understanding how to take home as much money as possible after taxes, which is one of the main reasons she hasn’t quit her job as an attorney in the traditional employment. I suggested the following to her:
Choose your rates wisely
It’s a good idea to compile a list of your base rates for the many types of work you do as a creator, if you haven’t already. Standardize your fees for publishing on a particular platform or for a given amount of posts. Is it preferable to be paid on an hourly basis for the work you do?
Join some of the online forums for content producers, some of which are present on the very platforms where you are active as a creator, to share experiences and knowledge – from realizing what the going rate for your work is to learning advice like this on how to handle your funds.
Remember to plan for rate increases as well. I frequently witness creators underestimating their abilities. After a while, they don’t realize they’ve improved and are now undercharging because they’ve been doing it for a while. Have faith in your abilities, and request a reasonable payment.
Get a separate business account ASAP
Although it may not be news, this is important to note. Like so many independent contractors, artists typically begin by depositing their profits in the only account they are familiar with—their personal bank account. Since the sums are initially little, people believe it makes no difference where their wages are placed. However, having a separate company account can significantly impact your bottom line as income increases.
One benefit is that it is considerably simpler to monitor your financial activity. The more time you’ll eventually save, the sooner you’ll make this a habit. You won’t have to manually enter every piece of information on a spreadsheet because you’ll have access to your bank statements at tax time. You’ll be happy you tracked your income and expenses this time around since you won’t regret it afterwards.
Get a systems upgrade
Speaking of tracking your income and expenses, there are programs available to help you with this. Artificial intelligence is being fully utilized by digital products and systems of all types to automate repetitive operations that previously took humans a long time to complete. Being a freelancer who must handle your own taxes, it’s all too easy to leave money on the table, therefore keep good records.
The most important aspect of this is probably appropriately identifying your spending. Make sure to classify your spending as business-related. When the time comes to file your taxes, you might profit from each and every one of them. A creator’s expenses can fall under literally hundreds of different categories, and each one that is correctly identified as a business expense qualifies as a tax deduction from your taxable income.
A creator’s closest buddy is money, not just the tools that make their work simpler but also the money itself. Make sure you are aware of all the expenses that can be deducted from your earnings as a creator and pay them through the company account you have set up. The next time you spill ramen on your laptop, you might be able to deduct the $800 computer repair off your taxes.
Outsource, outsource, outsource
I hear independent contractors of all stripes, especially content producers, boasting about their ability to handle every task on their own, including relationship management, tax preparation, and video editing! Don’t act heroically. To genuinely save money by handling everything yourself is not a sound financial decision. The absurd amount of time you waste on routine activities that someone else could complete would be much better spent on the higher-value work that propelled you to your current position as a creator.
Your chances of success increase the more of these ideas you can implement into how you manage your own business. After all, innovation is the foundation of the creator economy, therefore your financial practices should be as well.
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