By now you’ve most likely heard of the Twitch Affiliates program. I think it’s so cool that they’ve added it! After all, many small streamers were using other services like GameWisp and tips via PayPal that the business model was fairly clearly proven. Now you have the opportunity to participate in what Twitch has to offer. With that in mind, how can you prepare yourself to take advantage of the new program but not screw up your business?
Hobby or Business?
Your first move is to decide whether you consider your streaming a hobby or a business. If you’re in the United States and earning money from streaming the IRS says you’re running a business. However, it’s up to you whether or not you approach it as a business (you intend to earn income and grow) or a hobby (it’s fun to do, income is incidental). There’s nothing wrong with either approach but each requires a different thought process.
The thought process for a hobby is easier. Just relax and have fun! If it’s stressing you out at some point take some time to figure out why that is and adjust.
If you’re planning on growing a business, you need more of a serious mindset. First, you need to plan for how you’ll bring in income and how you’ll keep your expenses reasonable. Both can be difficult to do. Next, you’ll need to know how you plan to grow. While it might be nice to say that just doing your thing and being a fun streamer is the path to growth, you’re hurting yourself by not being more focused. That’s totally a way to grow, yes, but it’s a way that will cause slow growth for most people. Instead, think through how you can meet others who might have a similar audience and see if you can work with them. Perhaps there’s potential for some YouTube content that will bring in stream viewers. It might also pay off to invest some money into better streaming equipment or hire someone to do some artwork for the channel. The key is that you have a plan and are willing to spend time and money to implement it.
Track Business Stats
The first and perhaps most important thing you can do to get yourself prepared for the affiliate program is to set up software to track your business.
So what do you need to track and how do you track it? The two biggest items you should care about are your business income and expenses. Your income is everything you earn from streaming regardless of if it’s a sub, a tip, ad revenue, bits, or merchandise. Your expenses are everything that you spend to keep the business running. For a streamer, it would be common to count games, internet, commissions paid to artists, legal help, and streaming equipment as expenses. You’re basically getting a discount on these! The goal is to have more income than expenses.
So how do you track these? You need to make it a regular part of your routine and you need to find some software to help. There are inexpensive, effective accounting programs that are ideal for small businesses. These include FreshBooks, Quick Books Online, Wave, and Xero. You can use services like Zapier to connect your payment processors (PayPal, etc.) with your accounting software to hopefully reduce your manual work.
Once you have a sense of how much you’re earning and spending you next want to track those stats over time. You can see growth (or stagnation) and try to figure out patterns in your earnings. Is there a time of day that’s really good for you? A particular game? A time of year? Once you have the vital stats of your business you can make much more informed decisions.
Watch Out for Taxes
Taxes are a necessary… I won’t call them evil, but inconvenience. You need to plan for taxes. If you’re in the US you can check out our article on tax basics for streamers. You’ll be responsible not only for income taxes but Social Security and Medicare taxes as both an employee and employer alongside quarterly tax payments. Seriously, check out the article to see more details.
For most businesses, you are taxed on your income after you’ve paid the businesses bill. This is a really nice bonus over personal taxes! While your bill will likely be very, very low when you’re starting out it’s still a good idea to mentally prepare for the fact that you’ll need to do more work come tax time. At some point you will be responsible for reporting the income. You want to do it on a proactive basis instead of having the IRS (or equivalent agency) find out about it later and nail you.
Commission an Artist
Unless you’re awesome at art yourself it makes sense to commission someone to do that kind of work for you. As an affiliate, you’ll have access to one emote so you need to start thinking about it now. Also, if you haven’t yet had someone work with you on channel art it might make sense to use some of that initial revenue to commission something. Again, this is the difference between a hobby and a business mindset. A hobbyist might not consider commissioning art worth it but a business owner knows it’s an investment in their business. You can check out Twitch Creative, a streamer discord, or ask around for someone who does good work.
Most of what you need to do to prepare for being an affiliate involves getting organized and planning. It can be a pain to do and it might not be worth it for you if you just want to stream as a hobby. However, if you’re hoping to take your stream to the next level and you’re starting as an affiliate make sure you get your ducks in a row. If you have any questions on this, leave a comment below!