Among the many changes the Internet has brought to the production and consumption of media has been the growth of a new group of strong and vital voices that have significantly expanded reader options for getting information. Independent publishers of newsletters and Web logs have been able to inexpensively distribute their knowledge, research and reporting, and even to gain a following. And the existence of ad serving programs like Google’s AdSense makes it possible to make a few dollars at the same time.
If you are one of these writers, and if you experience enough success at earning either money or praise for your efforts, you may begin to seriously consider quitting your day job and becoming a full-time publisher. Once you have done that, whether you realize it or not, you enter the exciting world of the microbusiness owner.
Unfortunately, journalists who have no experience in starting and managing a business are just as prone to typical neophyte business management blunders as everyone else. While most of the fun will be researching and writing content, new micropublishers must always remember that they now have a business to run.
Where’s the dough?
Your first task, then, is to decide how your business will acquire its income. This might seem like a statement of the obvious, but you’d be amazed how many inexperienced online micropublishers dive into the business without considering their revenue streams.
If you are coming into this business from a regular job at any traditional media outlet, even a small local newspaper, you might assume that you will support your publication with advertising, the way most online news sites do. But it is relatively rare for advertising alone to support an online niche publication – usually these sites don’t generate enough traffic or accumulate a large enough e-mail subscription base to support publishers in the style to which they are accustomed.
This is not to say that ad revenues are a write-off for the niche publisher. It does mean that you should consider other ways of making money and try to predict which of these revenue streams is likely to bring in the largest part of your income. Some options include paid subscriptions, either for all content or for premium content, licensing and syndication, low cost “reports” and high-cost “special reports,” paid access to archives and even book-length compilations of previously published articles with attendant promotional speaking engagements.
You need to think about these things long before you take the plunge. It is fairly useless to go through the trouble and expense of legally setting up your business if you haven’t figured out how it’s going to make money. The choices you make about your primary revenue streams will affect how you run the rest of your business. Your subsequent decisions about the features you add to your content, how you approach your marketing efforts and your target audience will all depend on your likely revenue streams.
Once you have a good idea of how your business is going to pay its bills, it is time to get set up and get started.
Regulatory rundown
Most small businesses in the U.S. are sole proprietorships, largely because this is the least complicated and least expensive type of business to create. It is also the easiest kind of business for which to file taxes; as a matter of fact, freelance journalists are probably already familiar with the Internal Revenue Service’s beloved Schedule C. However, you might want to think twice. Other business types, such as corporations and limited liability companies may be preferable for the journalist who can’t spring for libel insurance right away but who wants to limit personal liability in the event — unlikely, one hopes — of a lawsuit.
If you can’t pay for libel insurance right away, paying an attorney could also be a strain. Fortunately, many of your legal questions can be answered through a bit of judicious research – no pun intended. A favorite resource among microbusiness owners is Nolo.com, which proudly offers “everyday law for everyday people.” Another very good online legal resource for small business owners — paid for by your tax dollars — is BusinessLaw.gov.
The trade-off between the different business types, though, is that limited liability companies and corporations of both the C and S varieties — normal corporate tax status and small business tax status, respectively — are subject to more regulation than sole proprietorships. When it comes to the publishing business, the difference exists primarily in the realm of taxes. The IRS is very proud of its mini-site for small businesses and self-employed individuals. On the other hand, if you prefer tax information that was not written by bureaucrats, another excellent resource is the Tax Talk e-mail newsletter produced by the National Association for the Self-Employed.
Regardless of your type of business, you will need not only to register with the appropriate agency in your county or state but also to apply to the IRS for an Employer Identification Number. This is a bit of a misnomer, by the way, since we non-employers are also required to have a number for our businesses. Rather, think of it as the business version of a Social Security Number.
You will also need to check with your state government to find out whether it will be appropriate to charge sales tax to residents of your state. Some states do not charge sales tax for electronic product, while others charge for some products but not others. Also note that, for the moment, merchants are not required to collect and remit sales tax on purchases made by residents of states other than the state in which the business is physically headquartered. That may change; legislation was proposed during the 108th Congress that would permit state governments to require remote sellers to collect and remit sales tax. There are some limitations to the proposals that would exempt most micropublishers, but it will be worth your while to watch this issue if you are going into the business of selling anything online.
As a micropublisher, you’ll have few regulatory hurdles to deal with. However, before you settle back and imagine that you’re off the hook, visit the public library and look up your local zoning ordinance. Some locations require registration and payment of a fee, while some have no requirements at all. Some locations will even allow you to post a sign that announces what you do to your neighbors. Even though you will be operating what is referred to as an undetectable home-based business, which is permitted in most locations around the country, some areas are significantly less home business friendly than others. It is in your best interest to make sure that you are in compliance with the zoning laws in your area.
Protecting your content
One matter that will be of primary concern for micropublishers is intellectual property protection, and first on the list is the issue of trademarks. The saga of Entrepreneur Media’s six-year legal battle with Scott Smith over the use of the word “entrepreneur” in a business name is a cautionary tale. When choosing a name for your publication, it would be a wise minimal precaution to perform a search on the Trademark Electronic Search System database at the U.S. Patent and Trademark Web site to avoid stepping on anyone’s trademarked toes. At the same time, investing in a trademark registration for your own publication name may be worth the expense. While the use of a business name in interstate commerce bestows common-law trademark rights, those rights are often difficult to enforce without the actual federal reg
istration.
Copyright registration will also be a worthwhile investment for the micropublisher, for much the same reason. It is unfortunate but true that content theft is rampant on the Web. This is more often a problem for sites with freely available content, since publishers who place their content behind a password-protected barrier limit access to consumers who may hesitate to give away what they were required to buy. Serial publishers can use Form SE to register their copyrights with the Library of Congress in groups of three; this is less expensive than filing individual registrations for each issue of the publication.
You should also get an International Standard Serial Number from the Library of Congress. These eight-digit numbers are not needed to make your publication comply with any kind of government regulation, but they do offer a number of benefits. In a medium that is rife with snake oil salesmen and assorted con artists, the ISSN bestows a certain amount of legitimacy on the new micropublisher in the eyes of many consumers. It also allows you to get your publication listed in Ulrich Periodicals Directory and Bacon’s Information, which should be among your early marketing chores. Best of all, acquiring an ISSN is free.
Think like a manager
Finally, new micropublishers must remember that they are running a business and need to take their enterprises seriously as a business. That may require seeking out business management training, taking the long view of your enterprise in the form of a business plan, and even eventually seeking out debt or equity financing if you decide you want to go that route. Growth, in terms of employees, is wholly a matter of choice for an online publisher; one of the nice things about publishing electronically is that your production costs remain more or less static, no matter how many subscribers you have.
There are numerous management training resources available for small business owners provided by the U.S. Small Business Administration and its partners, as well as relevant classes in local community colleges and adult education facilities. Costs for these training programs range from free to inexpensive and can be invaluable to inexperienced business managers. Material covered usually includes such essential skills as financial management, cash flow, marketing and financing.
There are also a number of trade-related resources available on the Internet, including the Online News Association, the Newsletter and Electronic Publishers Association and the Subscription Website Publishers Association. Electronic trade publications such as MarketingSherpa’s ContentBiz and PaidContent.org can provide additional information about the content market.
Besides enhancing your business skills, using these resources will encourage you to take your online micropublishing venture seriously. The Internet may offer the opportunity for journalists to provide extensive, in-depth coverage on issues, unfettered by the editorial restrictions of working for ad-dependent media companies, but it is up to individual journalists to give themselves the added validation of operating a profitable online enterprise. In the end, if we micropublishers take ourselves seriously, everyone else will too.
