Dear Dave,
I am on Baby Step 2, and I started a YouTube channel earlier this year that led to a new opportunity to make additional income. I try on and review clothing, and Im paid $30 for each clip thats anywhere from 30 seconds to two minutes long. Right now, I have about 1,000 viewers. This requires me to buy items from several brands. I usually return the items when Im through filming, but Im currently funding this with a credit card I only use for this project. I only pay the minimum each month until I get the refund, so at any given time there can be up to $4,000 on the card in rotation. I make about $86,000 at my normal job, so is this an okay way to fund my project and chalk it up as a business expense?
Amber
Dear Amber,
Youre taking a risk here, from a business perspective, by playing around with $4,000 in debt to make $30 a pop. Thats inordinate. And you shouldnt be paying for the clothes in the first place. These brands should be giving you clothes to reviewthat you keepfor the marketing exposure, but Im not sure youve got enough eyeballs on you yet to justify them giving you the clothes for free.
Basically, it sounds like youre trying to put yourself in a position to be an influencer. And the way influencers get paid is by monetizing eyeballs. Obviously, YouTube and other platforms will pay you if you can get the eyeballs. But 1,000 viewers really arent a lot these days. Youre getting there, though, and Im glad youre working at it and trying to make things happen.
You make good money, Amber. I want you to set aside $2,000 or $3,000 for this business, maybe out of the business income, and prime the pump one time. By that, I mean open a separate checking account thats for your clothing exchange process only. Heres the thing, lets say you bought $1,000 worth of stuff from one of these companies, and they suddenly decide theyre not taking it back. You just ate that $1,000. And guess what else? Now, you really have credit card debt.
There are three things you can always be sure of in business. One, its going to cost twice as much as you think it will. Two, its going to take twice as long as you think it will. And three, you are not the exception to these things. While were at it, add this to the list of stuff you can always be sure ofyoull never find me advising or endorsing credit card debt!
Dave