How to Start a Live Streaming Business

Live streaming now accounts for 17% of all internet traffic, which has made the live streaming industry worth nearly $60 billion globally. To start a live streaming business, you simply need to choose what kind of content to stream and a platform, such as Twitch, YouTube Live, Facebook Live, TikTok Live, and Amazon Live. Popular content includes live game streaming and live shopping, but any interesting content can lead to revenue from ads, subscriptions, affiliate links, or even tips.

If you consider yourself an entertainer, you could start your own live streaming business and get in on a growing market.

But first, you’ll need to understand the business. Luckily, this step-by-step guide has you covered with all the information you need to start a lucrative live streaming business.

Step 1: Decide if the Business Is Right for You

Pros and cons

Live streaming industry trends

Industry size and growth

• Industry size and past growth – The global live streaming industry was worth $59.14 billion in 2021.((https://www.zippia.com/advice/live-streaming-statistics/#:~:text=80%25%20of%20live%20stream%20viewers,17%25%20of%20all%20internet%20traffic.))
• Growth forecast – The global live streaming industry is projected to reach $223.8 billion by 2028.

Trends and challenges

Trends

• Live stream shopping is projected to become more popular in 2023.
• Live streaming platforms are adding more and more features, and allowing streamers to get paid subscribers.

Challenges

• As the live streaming industry grows, it’s becoming increasingly competitive.
• A large amount of bandwidth is required for live streaming.

How much does it cost to start a live streaming business?

Startup costs for a live streaming business range from $1,500 to $4,000. Costs include a computer, equipment, and a marketing budget.

You’ll need a handful of items to successfully launch your live streaming business, including: 

• Smartphone, tablet, or webcam
• Tripod 
• Wi-Fi Connection

How much can you earn from a live streaming business?

How much you earn will increase as your subscribers increase. Your profit margin should be about 90%. 

In your first year or two if you get around 200 subscribers, you can probably bring in $18,000 in annual revenue. This would mean $16,200 in profit, assuming that 90% margin. 

As you gain traction, you might have 3000 subscribers. With annual revenue of around $70,000, you’d make a tidy profit of $63,000.

What barriers to entry are there?

There are a few barriers to entry for a live streaming business. Your biggest challenges will be:

• Breaking into a competitive market
• Getting enough followers to make money

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a live streaming business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research live streaming businesses to examine their content and customer reviews.

• Make a list of live stream businesses that offer similar content. 
• Review your competitors’ content – features, pricing, and quality – and marketing strategies
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

There are three primary live streaming app types:

1. Live Broadcasting Apps: These popular apps let users stream live video and sound. They’ve given rise to many internet stars. Examples include Twitch, YouTube Live, Livestream, and Periscope.
2. Audio Streaming: These apps offer real-time audio streaming over the internet. Pandora, Spotify, and Apple Music are notable examples.
3. Video On Demand (VoD) Streaming: Users can schedule and watch TV shows online at their convenience. Hulu, YouTube TV, and Amazon Prime Video are common in this category.

You’re looking for a market gap to fill.  For instance, maybe the market is missing a comedy live stream, or an electronics shopping live stream.

You might consider targeting a niche, such as game streaming.

How much should you charge for live streaming services?

Your services will be your content, but then you need to look for ways to monetize it. You can get subscription fees, ad revenue, and affiliate commissions. Once you have a large number of subscribers, companies will likely reach out to you to promote their products.

Your prices will be completely dependent on what advertisers and affiliates are willing to pay.

Who? Identify your audience

Your target market will depend on the type of content you intend to offer, so you should choose your platform accordingly. If your content is designed to appeal to millennials and younger groups, you might choose Instragram Live.

Build a live streaming app

After you have definied your audience and chosen a monetization strategy, here are the steps that you need to take to create a live streaming app:

1. Select a Reliable Platform for Streaming, Hosting, and Storage
   • Prioritize quality over cost; users expect high-quality streams.
   • Inferior performance can result in app abandonment.
2. Focus on UI/UX Design
   • Ensure a standout user experience in a competitive market.
   • A minimalist design often trumps a cluttered interface.
3. Build and Test Your MVP (Minimum Viable Product)
   • An MVP contains only essential features, allowing for easier user feedback.
   • Key tech considerations:
     • Streaming Protocol: Decide between RTMP (high-definition but with delay) and WebRTC (real-time, speed-focused).
     • Streaming Platform: Platforms like Amazon Web Services (AWS) are recommended for content-streaming.
     • Content Delivery Network (CDN): Selection affects stream availability and performance, with options like AWS CloudFront.
4. Release, Maintain, and Improve
   • Post-launch, monitor user behavior analytics.
   • Adjust functionality based on insights and user feedback.

Step 3: Brainstorm a Live Streaming Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “live video” or “live stream”, boosts SEO
• Name should allow for expansion, for ex: “Stream Verse” over “Chef Stream”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Live Streaming Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Provide a brief summary of your live streaming business, highlighting its unique value proposition and target audience.
• Business Overview: Describe the nature of your live streaming business, its mission, and the types of content or events you plan to stream.
• Product and Services: Explain the specific live streaming services you will offer, such as event coverage, gaming streams, educational webinars, or entertainment content.
• Market Analysis: Analyze the live streaming industry, identifying trends, viewer demographics, and the demand for different types of content.
• Competitive Analysis: Identify competitors in the live streaming space, their strengths, weaknesses, and what sets your streaming business apart.
• Sales and Marketing: Outline your strategies for attracting viewers and content creators, including social media marketing, partnerships, and advertising.
• Management Team: Introduce the key team members responsible for running and growing the live streaming business, highlighting their relevant experience.
• Operations Plan: Describe the technical aspects of live streaming, including equipment, software, streaming platforms, and scheduling.
• Financial Plan: Present financial projections, including startup costs, revenue forecasts, expenses, and monetization strategies for your live streaming business.
• Appendix: Include any supplementary materials, such as sample streams, testimonials, or partnerships, that support your live streaming business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to live streaming businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your live streaming business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a live streaming business. You might also try crowdfunding if you have an innovative concept.  

Step 8: Apply for Business Licenses and Permits

Starting a live streaming business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your live streaming business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Watch Now”. This can sharply increase purchases. 

Marketing

Here are some powerful marketing strategies for your future business:

1. Leverage Social Media Trends: Utilize popular hashtags, challenges, and trends on platforms like Instagram, Twitter, and TikTok to increase visibility and reach a wider audience.
2. Collaborate with Influencers: Partner with influencers or personalities in your niche to co-host live streams, tapping into their established fan base for increased exposure.
3. Engage with Your Audience: Foster a sense of community by actively responding to comments, asking questions, and incorporating viewer suggestions during live broadcasts to build a loyal and interactive audience.
4. Offer Exclusive Content: Create a subscription or membership model that provides exclusive access to premium content, encouraging viewers to become paying subscribers for extra perks.
5. Cross-Promote on Multiple Platforms: Extend your reach by simulcasting on various platforms such as YouTube, Facebook, and Twitch, ensuring you capture diverse audiences where they are most active.
6. Optimize Video Titles and Descriptions: Craft compelling and descriptive titles and video descriptions, incorporating relevant keywords to enhance discoverability through search engines and platform algorithms.
7. Run Contests and Giveaways: Generate excitement and attract new viewers by organizing contests and giveaways during live streams, encouraging participation and sharing for broader exposure.
8. Scheduled Programming: Establish a consistent streaming schedule to create anticipation among your audience, making your live sessions a regular and eagerly awaited event.
9. Utilize Email Marketing: Build an email list of subscribers interested in your live stream content, sending regular updates, sneak peeks, and highlights to keep them engaged and informed.
10. Invest in High-Quality Production: Enhance the production value of your live streams with professional equipment, clear audio, and engaging visuals to create a more immersive and enjoyable viewer experience.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your live streaming business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your live streaming business could be:

• Delivering captivating and interactive live streams that keep viewers entertained and coming back for more.
• Offering exclusive access to behind-the-scenes content, special events, or private live streams for dedicated subscribers or members.
• Collaborating with other live streamers, influencers, or experts to bring diverse perspectives, cross-promote audiences, and enhance the live stream experience.

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a live streaming business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in live streaming for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in live streaming. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a live streaming business include:

• Camera Person – film live videos
• Marketing Lead – create and implement marketing strategies

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Live Streaming Business – Start Making Money!

Are you ready to start entertaining? The popularity of live streaming is growing by the day, so it could be a great time to start your own live streaming business. If you’re successful, there’s really no limit to how many followers you could get and how much money you could make.

Now that you understand the business, you’re ready to hit the record button and get your live streaming business on the air!