Most bloggers don’t really have any kind of plan when they first start out. They just start writing and posting articles and then learn as they go. Most give up within a couple of months and you never hear from them again. Others keep at it, run their blog as a home business, and slowly learn what it takes to build a successful blog. Then the rules change and they have to learn all over again!
Eventually, bloggers who become successful and start making money from their blogs have a decision to make. Do they want to continue blogging mostly for fun and enjoy the extra spending cash they earn online? Or do they want to continue growing with the intention of one day blogging full-time.
Perhaps you are considering this very question right now as you’re reading this.
There’s nothing wrong with staying small and keeping your blog as a side-gig that earns gas money. But if you want to earn money online full time you’ll need to consider what kind of business structure makes the most sense to you.
Most small-time bloggers are sole proprietors. A sole proprietorship is the simplest business structure and it usually only involves one owner. Taxes are pretty easy for sole proprietors and they still get to take advantage of tax breaks such as the home business deduction.
A significant disadvantage to remaining a sole proprietorship is that you will be personally responsible for the company’s liabilities. If you borrow money for your business and can’t pay it back, creditors can go after your personal assets (including your house).
You could also find yourself personally liable if someone decided to sue you. It may seem silly, but in today’s world people tend to sue first and ask questions second.
To Incorporate or Not to Incorporate?
That is the question. But I’m afraid there isn’t a one size fits all answer.
Most bloggers will be perfectly fine as sole proprietors. But as your income starts to increase and you start imagining doing this full time instead of just a side-gig, you’ll want to at least consider your other options.
When I decided that I wanted to take my online business to the next level I considered a number of options. I weighed the different options and considered the advantages and disadvantages of forming either a corporation or a limited liability company (LLC). In the end I decided that Multiverse Media would be an LLC for now, but I’d keep open the option of becoming a corporation down the road.
Since a corporation is more complex and expensive to form than an LLC, I decided that the added cost wasn’t worth it at my current income levels. But if all goes well in a few years I’ll likely reevaluate that decision.
In the meantime, an LLC still gives me the protection against personal liability and the professional look of a real business.
What kind of business is your blog? Have you ever given any thought to incorporating?
Mike Collins is obsessed with building new streams of income and achieving financial freedom so he can live life to the fullest with his wife and 3 amazing children. Read more about his adventures at WealthyTurtle.com.