Are blogs hobbies, or can they be a business? Many people start blogs to work on their communication skills, document their story, and to connect with other like-minded individuals. Some people start blogs as a money making pursuit.
I started The Mastermind Within to explore entrepreneurship. I wanted to work on my communication and writing, but also learn more about marketing and making money online. In my blog traffic and income reports, I make it clear that I’m looking to grow my blog in an effort to gain experience in the online marketing space, and potentially create The Mastermind Within into a money making vehicle.
It’s year 2, and I’m seeing the potential of this blog. I decided to officially make The Mastermind Within a business. In this post, I will be discussing why my blog is now officially a business, some of the benefits of making this decision, and why I chose a sole proprietorship for The Mastermind Within.
Making The Mastermind Within into a Business
I went to FinCon 2017 last October and was inspired by many wealthy and successful individuals. Many of the people I chatted with at FinCon were looking for tips and tricks to grow their blog, make more money, and grow their business.
For the first year, The Mastermind Within was just a website I posted on and shared my thoughts on personal finance, entrepreneurship and self-improvement.
While thinking about what I wanted to do in the second year, I decided it was time to make The Mastermind Within into an official business – registered with the State and everything.
By officially making this blog a business, I could continue to establish my brand with potential advertisers and sponsors, take advantage of all of the tax benefits of small businesses, and continue to gain experience as an entrepreneur.
Does an LLC or Sole Proprietorship Make More Sense for a Solo Blogger?
First, what is an LLC? What is a sole proprietorship?
LLC stands for Limited Liability Company. An LLC is a business structure where the members of the LLC are protected from some or all liability for acts and debts of the LLC, depending on state shield laws.
In addition to the protecting personal assets, LLC’s have flexibility for the tax treatment of business income.
A sole proprietorship is another business structure. A sole proprietorship is a type of enterprise which is owned and run by one person and there is no legal distinction between the owner and the business entity.
The sole owner is responsible personally for all assets and debts of the business, and can also be held personally liable.
Why I Chose a Sole Proprietorship for The Mastermind Within
Right now, The Mastermind Within is not bringing in any serious revenue. I make a couple bucks from ads and some affiliate links each month, and I’m not collecting payment in any way on this site.
Right now, the price of forming an LLC would far outweigh any revenue brought in to offset the cost of running the blog. While, a person can try to sue for practically anything, I’m not too worried about that.
I am very careful about the recommendations and advice I give on this blog. Anything is I recommend is vetted by me personally. I don’t talk about any of my investments directly (I’ve never shared the composition of my retirement portfolio, and I don’t intend to).
In the future, when the blog continues to grow, I will consider transferring the assets in to an LLC. Until that point, a sole proprietorship is fine for now.
Getting a Bank Account and Credit Card
When setting up a business, it’s good practice to separate your business expenses from your personal expenses for accounting reasons – it’s just easier.
For me, opening a business bank account was pretty straightforward. For a sole proprietorship, all that was required was my social security number and the business registration with the state.
Now, I have a separate account for The Mastermind Within. In addition, I have a company credit card for any expenses I have for the blog (hosting, tech support, networking events, etc.)
Setting Up a PO Box
When a blogger sends out emails to their email list, it is required, by CAN-SPAM Law, that you must include a physical address where people can send you mail in the email.
I didn’t want my home address to be sent out to 500 people I don’t necessarily know. That’s why I’ve paid 90 a year to get a PO Box. For my subscribers, you can see that PO box address at the end of each email.
Tax Benefits and Treatment for a Sole Proprietorship
Finally, now that this is an official business, I can deduct the expenses against whatever I make. With the bank account and some of my awesome spreadsheets, tracking this will be straightforward.
A sole proprietorship is not able to take advantage of some of the tax structures an LLC can take advantage of. I’m not an expert on this, but with LLC’s, members can structure organization’s tax treatment in a few different ways to reduce the amount of tax the individual pays on the business income. As I mentioned above, at my level of blog income, the tax benefit from these structures I would get is very little.
Does my Choice Make Sense? Am I Missing Anything? Have You Ever Started a Business?
Becoming more serious about The Mastermind Within is something that excites me. Registering this blog as a business was a step that was necessary for my entrepreneurial life.
While I have a lot going on in my life (many side hustles and responsibilities), writing for you on The Mastermind Within is one of my true passions and something I love doing.
I’m really excited to see where this blog can go in 2018. 50 weeks to go until 2019. Consistency is the key to successful blogging, and I’m in for the long haul!
Does my choice make sense? Am I missing anything? Have you ever started a business?
Become a MASTERMIND
Sign up for our mailing list and receive instant access to all the Mastermind Within freebies (tools, spreadsheets, and an eBook), and exclusive content.
Your future self will thank you.