If you’re thinking of generating income through your blog, likely through ads, that means that your site will become a business and be subject to taxes and regulations. This chapter will guide you through the basics of turning your blog into a business, including planning the finances, filing the proper paperwork, protecting and copyrighting your work, and creating a business plan for future growth. You’ll find that various parts of this chapter will apply to you at different stages in your blogging path, so take each step as it comes and remind yourself that as serious as some of it may sound, these steps are all signs that your blog is growing and doing well.
Whether you’ve banked $100 or $10,000, once your blog is earning any sort of income, there are things you’ll need to consider to make your new blog official, like getting a business license, a business bank account, and possibly trademarking your blog’s name. You’ll also have to think about protective measures such as health insurance and your legal structure. Following are the basic necessities for getting your blog established as a legitimate business.
The name of your blog can, of course, be the name of your business. Unless your blog uses your legal name, you’ll need to register a fictitious business name (also known as a DBA—“Doing Business As”—in the United States, or T/A—“Trading As”—in the United Kingdom) so that you can apply for various licenses, get a business bank account, and be paid or make payments under that name. Luckily, it’s a pretty easy and inexpensive step. Depending on your location, a DBA can be filed either through the Secretary of State or your county clerk’s office. Two businesses in the same state or county cannot have the same name, so this is what the appropriate agency will be checking for when you perform an initial search in their database. If the name is free and clear, you’ll submit a form, pay the fee, and possibly have to publish a notice in your local newspaper before it can be finalized.
Depending on where you live, you may be required to apply for a license to officially conduct business and possibly need a separate home occupation business license to run your business from home. The U.S. Small Business Administration can give you guidelines for what you need based on your state and where you plan to work. Along with your local chamber of commerce, you can find out the type of license you’ll need, how to go about applying for it, and what fees are involved. Your business license needs to be displayed in your workspace and will be necessary to open a business bank account.
If you want to have complete ownership of the name of your blog throughout the United States (not just your state), you’ll have to file a trademark. A trademark is a name, word, phrase, logo, symbol, image, or a combination of these elements. To register a trademark and protect your name from being used by others, you have to go through the U.S. Patent and Trademark Office (USPTO; see Resources) to do a search and make sure the name is available for use. If the name you’ve chosen is available, you can file an application for use of the mark. The waiting time for a trademark can range from a few months to more than a year, depending on the reason for filing and any legal issues that may arise. If you prefer to leave the legal stuff to the experts, a small-business lawyer can also take care of filing your trademark.
For tax purposes, you’ll want to keep any income made on your blog or any money spent on it separate from your personal finances. Opening up a business bank account will keep your blog finances independent of your personal finances and make it much easier to file taxes. To open a business bank account, you’ll need to show the bank your fictitious name statement (if you’re using a DBA) along with your business license. While you’re at it, open a business savings account as well so that you can deposit a portion of every check you receive. It’s always best to put those tax pennies aside instead of trying to come up with your full tax payment in one lump sum at the end of the year.
Opening up a business bank account will keep your blog finances independent of your personal finances and make it much easier to file taxes.
If your blog is a partnership or you have (or plan to have) employees, you’ll need to apply for a federal tax ID number, also known as an employer identification number (EIN). Otherwise, as a solo blogger, your individual social security number is sufficient for filing taxes. Having an EIN is also helpful when companies who advertise with you require you to fill out a W-9 form (a taxpayer identification form, which is often required before a sponsor or client can pay you). By having an EIN, you can fill out the paperwork they need without giving them your personal social security number. The IRS Web site (IRS.gov) can give you more details on how to go about applying for your EIN.
Every legal structure has its own set of pros and cons. Many bloggers automatically choose a sole proprietorship as their legal structure, since it’s the easiest to do when working solo. However, a C-Corporation, S-Corporation, or Limited Liability Corporation may be options to consider as well. Each one has its own set of tax and asset protection benefits (in case you are sued). You can learn more about the differences between them on the Small Business Administration’s Web site (sba.gov), or you can turn to a small-business accountant or lawyer for additional guidance.
We often take it for granted, but health insurance is essential to stay protected when sickness or emergencies arise. If you’re no longer at your full-time job, are unable to use the COBRA (Consolidated Omnibus Budget Reconciliation Act) plan, which extends the coverage you had at a past job, or don’t have a partner whose insurance will cover you, there are many health coverage plans out there to satisfy your needs and budget. Your state insurance department can give you a list of health insurance options in your area so you can compare plans and choose what’s best for your needs.
Part of becoming a more established blogger includes taking some protective measures to prevent others from lifting your content. Following are some safeguards you should implement when it comes to protecting your blog.
Courtesy Line. It helps to add a courtesy line to the bottom of your blog that lets others know how you conduct business and how you hope they will, too. It largely serves as a deterrent (similar to placing a home alarm sign outside your house). For example, mine says:
All layouts and graphics on this blog are created solely for the Oh Joy! blog. I enjoy sharing information, and love when others enjoy my finds enough to post the links on their own sites. However, I ask that you do not use my exact layouts or designs without permission or without noting its origins on your post. Oh Joy!® is a registered trademark of Nantaka Joy®, Inc. All rights reserved.
Time Stamp. You have to your advantage the time that your blog existed prior to a blog that copied you, and can prove that the content existed on your site initially before being copied. You can check to see if your content has been duplicated by using a Web site like Copyscape. Similar to an Internet search, after pasting your URL into a search box, Copyscape will search the Web for any copies of your content that were used in other places. You can also install a program like Tynt, which helps protect your content by embedding a code with your URL into any text or images that someone attempts to copy and paste from your site (see Resources).
Creative Commons License. Creative Commons serves as a way to support and protect the online work of creatives like photographers, artists, and bloggers. You can place on your blog the simple and standardized text and icons, which notify users of the copyright permissions of your creative work. By choosing from a set of six licenses, you can tell others which part of your work they can and can’t use, publish, print, or distribute.
Copyright. Copyright is a set of exclusive rights granted to the author of an original work. The original work can include text, paintings, photographs, sound recordings, and motion pictures that you’ve created for your blog. The good news is that you have the Berne Convention on your side. This is a treaty that states that once your content has been published on the Internet, it’s automatically copyrighted, and you are the copyright holder. The United States has signed this treaty with only certain countries, so if an infringer is in a country that has signed the treaty with the United States (and you live in the U.S.), this treaty would be in your favor. Be sure to add a line on your blog stating the current year and the copyright holder (that’s you!) at the bottom of your site. Depending on the nature of your specific blog content, you should check with a lawyer to see if you should also have your blog copyrighted through the U.S. Copyright Office as an added protective measure.
No
CAITIN McGAULEY
NEW YORK, NY
“THE WHOLE REASON I have an illustration career is because of my blog,” says illustrator and blogger Caitlin McGauley. After enrolling in Syracuse University as an illustration major, she worried that she’d never get a job as an illustrator, so she switched to advertising design—which seemed like a more practical major with more job options. However, Caitlin continued to take electives in surface pattern design so that she could still practice her love of illustration. After graduation, Caitlin landed a job at Ralph Lauren as a bedding textile designer but still craved her true passion and sought freelance illustration work on the side. Unfortunately, her desire was met by many rejections from illustration representatives, who said they liked her work but felt that she didn’t have a specific voice. Looking to develop her style and aesthetic and show that she had something interesting to offer, Caitlin started her self-titled blog in 2008. These days, she showcases colorful watercolor illustrations of things such as the gelato she just ate, the espadrilles she’s coveting, or a nook in her bedroom she just spruced up—all in the signature style that she developed through her blog. This didn’t go without notice—publishing her artwork on her blog has brought Caitlin clients such as online Lonny Magazine, kate spade new york, and Hermès. Now, Caitlin has the career she has always wanted and confidence in her style and work due to the time she put into nurturing her talent through her blog.
How long did it take for you to develop your style? And how did your blog help you do that?By my fourth or fifth post. I did a small painting of Rizzoli, my favorite bookstore in New York City. I had always put these heavy black outlines on my watercolor illustrations because they never looked finished to me without them. But this painting was just a loose watercolor, with no lines to define it or to give it a stylized look, and I just decided to paint more loosely at that point. When it comes to watercolor, practice and experimentation are really important, so a blog can be a great forum to get yourself to paint regularly. Feedback from readers is so valuable. I am so grateful and excited to get comments, and it really encourages me to keep going.
What career opportunities have come to you because of your blog?I had started my blog while I was still working full-time at Ralph Lauren. Before starting Lonny Magazine, Michelle Adams (the editor in chief) had her own blog, which I liked and would comment on. From one of my comments, she went to my blog and really liked my style and asked me to do the illustrations for Lonny. After we discussed it, she had me on board before the magazine launched. One assignment for Lonny was an illustration of the kate spade new york store in New York. From that, kate spade new york asked me to illustrate artwork for dishes and other prints they wanted to sell. And after an article about Lonny in Vanity Fair (where they mentioned me as their illustrator), Hermès contacted me to see if I’d paint portraits of people at their events—like a cooler version of the caricatures they do at the circus! Then DailyCandy did a video on me about being an artist who did commissions and portraits, so I started getting inquiries from people (not just businesses) to paint a scene of their house or someone’s favorite pair of shoes. It was just one great thing that led to another.
Was it difficult at first to put your work out there, since it was still a work in progress of sorts?It was not difficult to put my work out there because I didn’t have any readers at first! Even though I am more confident with my style now, I always ask myself, Who will be reading this and is the story interesting enough to tell? So I definitely put more thought into my posts now. The initial response was slow going, but it just makes me appreciate all of the feedback I get now and the work that it took to get to this point. I was posting more in the beginning than I am now, because back then I just had my full-time job and the blog to work on.
How long does it take you to create your drawn blog posts?If I have a concept in mind, it usually takes about an hour to draw it, scan it, and post it. I don’t sketch things in advance. I make a mental note of things I want to paint. Sometimes I can go home and paint it from memory, or—say it was a pair of shoes I’m lusting after—I might look them up online to get a better image to paint from. I often love the watercolor illustrations I do for my blog more than those I do for clients, because they’re more natural and less thought out.
When did you decide to freelance full-time?I was still at Ralph Lauren as a bedding textile designer when this was all happening, and I was working around the clock. In early 2011, I started thinking about going full-time with my freelance work when I was pregnant with my first baby. I knew I couldn’t work full-time, freelance on the side, and have a baby, so I left my job because I had enough freelance work that I could really make a go of it.
You sell some of your work as prints. Why did you start your print shop?I was getting a lot of inquiries about prints from readers. It’s probably the most common e-mail request I get. When developing the four prints I started with, I wanted to show a variety of subjects—a room/décor scene and a fashion girl, because those were the types of things readers requested, and then butterflies and necklaces, because those were objects that I liked. My goal is to change the prints I offer every couple months, maybe with something specific to the season each time.
How has blogging enhanced your skills and talent as an illustrator?It’s definitely given me a lot more confidence and practice in my art. I can look back on my work and see how much easier it has gotten for me to create new images, how much less time it takes than before, and how much better it looks than it used to. It’s also helped me to understand what people like and respond to best from the comments I’ve received.
Also, the people I’ve met in the blogging community have really been incredible. Michelle and Patrick from Lonny really put me on the map. I’m so appreciative of the people who leave me comments and how they care about what’s going on in my life. The overall connection with people has been the best part of all of this.
What tips do you have for someone who wants to use a blog to develop their style and talent?I cannot stress enough that a blog is the best way to develop a style. Sometimes people e-mail me and ask about technique or how to achieve a certain look with watercolor. I always say the same thing—it just takes a ton of practice! You can’t help but develop a style, or get better at your style, if you have the discipline to paint nearly every day.
A huge benefit of blogging is that you don’t need a whole lot of capital to start. Aside from a possible monthly fee for your blog host and the cost of a computer (which you may already have), overhead is usually low, especially if you’re blogging from home. However, if you’re at a point where you’ve turned into an income-earning professional blogger, you’ll need to consider how you’ll live off this income (see more about becoming a full-time blogger in chapter 7).
For any expenses you incur for your blog, using cash you have in the bank is ideal. However, you can consider using credit cards to help cover some blogging expenses as long as they are used with caution! As appealing as a 0 percent APR credit card may be now, there are often hidden fees that pop up at some point down the road. Since your blog may not earn income right away or even for a few years, be careful when getting spend-happy. Look into refurbished scanners, cameras, or other blogger gear on Craigslist or a trusted equipment shop, and buy these supplies and tools only when you really need them and they’re essential for increasing the quality of your blogging abilities. Work from home (or a local café with Wi-Fi) for as long as you can to save on expenses before considering a shared studio space. Also, consider trading or bartering with those skilled in other areas. You could call upon a graphic designer to design a banner for you in exchange for ad space or ask a photographer to take your head shot for your About page, and in return you’ll link to their site when the photo is featured.
Once your blog is a business, you’ll want to track two very important things—your income and your expenses. Using programs like Excel, Quicken, or QuickBooks will help you log every check or payment you receive. As soon as you receive a payment, be sure to record the date, the company who paid you, and the amount received. Try not to let the records build up, as it’s much easier to record a check or PayPal payment each time it comes through (or at least once a month) than have to spend days logging a pile of invoices at the end of the year. The great thing about keeping an up-to-date account of your blog income and expenses is that you can track how much you’re making each month and start to see your potential earning power. Also, when you’re ready to tackle your taxes, you’ll be ready to go! At the end of every tax year, the IRS requires any companies that have paid you more than $600 that year to fill out a 1099 form and send you a copy by January 31 after the completed tax year. Make sure to match these statements up with your records, as you’ll need to include copies of each one for your accountant.
If you’re a self-employed blogger, filing taxes won’t be just a yearly occurrence anymore. When your blog earns a profit of more than $1,000 for the year, the IRS requires you to pay state and federal taxes quarterly. Typically, you’ll need to pay anywhere from 25 to 48 percent of your income in taxes, depending on how much you’re earning per year. Any time you receive a payment, it’s best to put part of those funds into your business savings account so that the money isn’t touched until your tax payments are due. You may have to file quarterly (and potentially make payments each quarter)—on April 15, June 15, October 15, and January 15—as an estimate of what you will owe at year-end. While you can certainly tackle this on your own with the help of the IRS Web site (irs.gov), you may choose to seek the help of an accountant to get you on track and explain all the details to you in layman’s terms if you’re not feeling savvy in this area.
EXPENSE IT!
As a business, you should begin to take advantage of any items that can be considered a business expense to help reduce your taxable income. Any materials or tools you used or trips you took in order to create and compose your blog posts can now be counted as expenses and should be logged and submitted to your accountant quarterly. Obvious business expenses include your computer, scanner, camera, and any software (like Photoshop) that you use to create your posts. But you can also expense items like the baking supplies you used to make a recipe, the new beauty products you bought to review and share with readers, any business lunches you had with advertisers or clients, and your hotel stays for blogging conferences.
Since most blogging is done from the comfort of your own home, a portion of your home bills (including rent and utilities) can be deducted if that space is dedicated to blogging. So your dining room table or your living room doesn’t count if the rest of your family uses that area of the house for meals or recreation. If you do have a room you use solely for blogging, then you can calculate the percentage of space it occupies within the full square footage of your home. For example, if your blogging office is one-fifth the square footage of your home, then one-fifth of your expenses such as rent, Internet, and electricity can be deducted and accounted for when filing your taxes. Now, this doesn’t mean that you should take advantage of this tax deduction and expense everything in your life. If you appear to have too many expenses that overlap into personal territory, that can be a red flag for the IRS, so think carefully about what is a true business expense.
No
EMILY HENDERSON
LOS ANGELES, CA
IT STARTED with just a dozen blog posts, but these triggered the events that would lead to the launch of Emily Henderson’s own show on HGTV. Emily began her career in 2001 as a prop stylist working on sets in New York and Los Angeles, styling food, fashion, and still-life scenes for advertising and editorial clients like Target, West Elm, Martha Stewart Living Omnimedia, InStyle, and Domino. She started her blog, The Brass Petal, in early 2010, just a month shy of auditioning for the second season of Design Star, an HGTV competitive reality show. The support she received from blog readers gave her the confidence to try out for Design Star, which she won, leading to the launch of her own show, Secrets from a Stylist, on HGTV in 2011. Punctuated by her quirky personality and style of writing, her newest self-titled blog, Emily Henderson, lets her continue to connect with fans and viewers by giving them a behind-the-scenes look at her work and process and also lets her share personal experiences from her Mormon upbringing.
In the beginning, how did blogging change your work as a stylist?It was the first time I felt like I was interesting to other people. When you’re working on shoots, you’re not always credited for styling, or the credit is so minor. Oftentimes, people didn’t understand what I really did or if I was any good at it. Once I blogged, I got instant positive feedback about my work, which gave me more validation and confidence. For some reason, people related to me, and in a good way. After seeing that type of feedback, I gained more confidence to go on Design Star … and then you know the rest!
Why should someone start a blog?I think that people often feel intimidated and feel like they might not be as accomplished in their field as others to justify having their own blog. It’s okay if you’re still learning your craft or you’re not exactly where you want to be yet—you still have something to offer. I started my blog because I knew I had something to show people about the world of styling, and I just had to put myself out there. You have nothing to lose.
You started your blog before you went on the second season of Design Star, and blogged throughout the entire season once it aired. How do you think that helped you interact with people watching the show?My blog helped me connect with other bloggers and readers, because when they watched the show, they felt like I was one of them (having known me from my blog prior to being on the show). I felt like I had an advantage over the contestants that didn’t have blogs, because fans and viewers got to hear about my real feelings and what really happened on each episode from my point of view. Even though fans had no control over who won (and it was the judges’ choice in the end), it showed the humanity of what it’s like to be on a reality show, the constraints of each challenge, and my perspective throughout. People empathized with me when they knew more about the process.
You write in a very quirky, stream-of-consciousness manner and also share bits of your former Mormon lifestyle. Why did you choose to stay casual in your tone of voice and share this part of your life?I knew I wouldn’t blog if it wasn’t easy, and writing the way you talk is easier than trying to be super-formal or structured. It would be forced if I didn’t write that way. As for the Mormon posts, it’s undeniable that what I do is a direct result of having grown up Mormon. Coming from a big family with six kids, crafting and canning in everyday life, and learning to be so resourceful at a young age really makes for pretty creative adults. One of my most popular posts is about why there are so many Mormons or former Mormons who are design bloggers, crafters, and work at Martha Stewart! Readers enjoy hearing about it, because either they know nothing about the religion or they’re Mormon and like that I’m talking about it in a positive way.
If your blog is gaining momentum and especially if it’s growing quicker than you expected, that’s incredible news, and means that you’re obviously doing something right. If you find yourself with new opportunities knocking on your door from companies who want to work with you, establishing a business plan is a great way to come across as a professional blogger. It could also help you gain respect if you’re looking to collaborate with another company, seek additional funding, or even someday sell your blog. A business plan essentially outlines your goals and what you’d need logistically and financially to maintain and take your blog business to the next level. The five major components of a basic business plan include:
1 A mission statement, describing the focus of your blog, your goals for it, and why it’s of value to readers.
2 Background information, giving more insight into who you are. You should mention if you had previous professional experience in the industry, or if you or your blog received any notable awards or press.
3 A list of capabilities, indicating what types of ads you can offer potential sponsors, articles you can write for other blogs or magazines, benefits future investors might receive, or any strong concepts you have for book publishers. This part of the business plan should be tweaked depending on whom you’re looking to reach or attract.
4 A market analysis, discussing any blog competition in your specific genre. This should state why you stand out from the rest and what you have to offer that’s different from everyone else in your blog’s niche.
5 Financial projections, including how much you have earned or expect to earn, your expenses, and a plan of how and when you expect your blog to be profitable. In most cases, you’ll be putting this plan together once your blog is earning income, but even if it’s not, it’s helpful to gather this information to prepare you for the possibilities ahead.