If you haven’t picked up on it by now, I LOVE affiliate marketing. I believe every business could benefit from making affiliate marketing a part of their business model. The best part is, it’s SO EASY to get started. But, there are some things you need to do BEFORE you start affiliate marketing.
And…affiliate marketing can be very lucrative.
But you need to make sure you cover all your bases so you can take full advantage of all that affiliate marketing has to offer.
Below I have 7 things you need to do before you start affiliate marketing.
Now, I don’t share any of these things to discourage you from getting started. Just the opposite, in fact. Most of these are very easy and will show you just how easy it is to get started.
1. Incorporate Your Business
Before you do anything business related, you need to incorporate your business. This could be an S Corp, an LLC or at least a DBA (Doing Business As).
You simply cannot do this the right way starting off as merely an individual.
Sure, you can start as a sole proprietor, and in most states that could be as easy as just declaring that you are in business.
But if you plan on bringing in any revenue whatsoever and in order to protect yourself, you need to incorporate before you really feel like you need to.
Now, I’m not in the business of offering legal advice, and I certainly recommend you seek qualified legal advice before making a decision, but my opinion is that you create either an LLC or an S Corp just for the legal protections that they offer you.
And here’s a really cool side benefit of doing this: It makes you feel legit.
I remember when we incoporated our business. Suddenly, it felt more real. I felt like a real business owner.
And, ultimately, that helped my bottom line.
2. Get a Business Banking Account
Trust me on this, you do NOT want to mix business and personal banking. I’ve made that mistake and it flat out sucks.
You need a specific banking account for your business.
In most cases, this is as simple as going to your bank and setting up a free (or low cost) checking account that is specific to your business.
For accounting reasons you absolutely need to have this.
3. Get an EIN (or a tax number specific to your country)
The obvious reason for this is so that you don’t have to share your social security number or other identifying information.
I don’t know about you, but I’m not going to share my social security number or any other personally identifiable information with anyone online.
Especially random affiliate programs I sign up for.
That’s why I make sure to always use my company’s EIN (Employer Identification Number).
Most countries have an equivalent to an EIN so you don’t have to share any personally secure information.
If you live in the U.S., here’s a link to the IRS website to learn more about EINs.
4. Create a Spreadsheet to Track Earnings, Expenses, Etc.
Promoting affiliate offers should be profitable. In fact, it should be incredibly profitable if you are doing it the right way.
So, when you’re first starting off, it’s important to create a system to not only track your earnings, but any expenses for any campaign you promote.
This is important so you can see how profitable individual campaigns are.
The earnings part is easy, typically programs will have a dashboard that will show you how much you have earned, but how much did you SPEND to make that money?
That’s why you need to create some sort of spreadsheet or system so you can track each of these things.
5. Don’t Forget Taxes
Remember, you have to pay taxes on your earnings.
I am not a Certified Public Accountant, and again, I recommend talking with a CPA or other tax professional when planning for your individual situation, but I do have some general guidelines that I recommend you follow.
Make sure to set aside at least 25% of your earnings for taxes.
Depending on your tax bracket, what state and country you are in, this could be higher, but for most of you, it will be at least 25% of your earnings that you will have to pay taxes on.
Once again, I am not a professional, so it’s important that you contact a tax professional to determine exactly how much you need to set aside for your taxes, or at the very least, do some research on your own to figure how much you should set aside.
Remember, profit is what matters.
Going back to #4 above, you don’t necessarily pay taxes on your earnings, you pay taxes on your profits.
For example, if you make $5,000 on an affiliate campaign, but you spend $3,000 to generate it, in most places you are only paying taxes on the $2,000 profit.
Don’t try to cheat.
I know this probably goes without saying, but don’t try to hide your affiliate income.
It’s not “play money.” Just because it’s in your PayPal account and not in your bank account doesn’t mean the IRS or other government agencies can’t see it.
And it’s just the right thing to do.
Don’t try to cheat the system.
6. Set Up a PayPal Account
Speaking of PayPal, that is the number one way that affiliate programs are going to pay you.
In fact, I would guess that 98% of the time that I’ve been paid by an affiliate program, it has been through PayPal.
So, before you even make your first dollar online, make sure you have your PayPal account set up.
If nothing else, it’s sending a subconscious message to yourself that you are ready. You’re in this to make money and you are prepared to make your first dollar online.
7. Create Your First Affiliate Promo Strategy
I have a free template that will walk you through how to create an affiliate promo strategy, but as soon as you sign up for your first affiliate program I want you to create an affiliate promo strategy.
It is much easier to be successful in affiliate marketing when you have a strategy to actually follow.
So be sure to get my free template to create your affiliate promo strategy:
As I mentioned above, none of these things are prohibitive to getting started in affiliate marketing, you should get started today.
In fact, I’ve listed 20 reasons why you should start affiliate marketing today.
None of these will hold you back. Most of you can complete ALL of these within two hours, and then, you’re on your way to affiliate marketing success.
Question: What is one thing that you would tell somebody they need to do before they start affiliate marketing? You can leave a comment by clicking here.