Social media influencers use social media to build their brand. They may get their followers to buy products, support a cause or vacation in a certain place. It might seem like it's something people do just for fun, but some influencers make large amounts of money. Not every social media influencer is an entrepreneur. Still, many of them have much in common with traditional entrepreneurs.

Are Influencers Entrepreneurs?

Entrepreneurs see a need for a new product and start a business to make it. An influencer, on the other hand, has the power to affect people through social media, and they have a more personal relationship with their followers. Influencers who start their own business are definitely entrepreneurs, but are they fulfilling a need? Many say yes. Companies can reach specific groups through an influencer. Their followers seem more likely to buy what the influencer suggests.

Getting Started

Entrepreneurs and influencers start businesses in very different ways. Nearly all traditional businesses have startup costs. They have to spend money to buy materials and equipment and rent an office. But entrepreneurs do not always have to spend their own savings on their new business. They sometimes are able to get money from investors. This money is called venture capital, and often the investors get part of the business in exchange.

Influencers, on the other hand, usually have much lower startup costs. Beauty and fashion influencers may have to get new clothes and buy the latest makeup. However, most influencers only need social media accounts and a smartphone. They don't have to spend money on renting an office, for instance, since many of them work from home.

Building a Brand

Building a brand is important for both influencers and entrepreneurs, but they do it in different ways. Entrepreneurs build their brands slowly over time. Before they even sell anything, they have to first determine how their brand is different from others and communicate that to consumers. For entrepreneurs, the product or service comes first, and the brand comes later. Influencers also develop their brand over time. However, their brand is their personality, so they have to be able to get followers before they can make any money. Influencers develop a message to reach and gain followers, then monetize it by working with product brands. For them, their personal brand comes first, and reaching followers comes second.

Making Money

Businesses try to sell a product or service for more than it costs to make it. This is their profit. After building up an audience of followers, influencers enter partnerships with companies or advertisers. They are paid to post about a product or service. With social media channels, like YouTube or Instagram, influencers can add advertisements to their page, creating a way to make even more money. Most influencers earn money through a combination of advertisements, posts, and sometimes their own line of products. And of course, they advertise these products on their social media channels.

Driving the Economy

An economy is growing when jobs are being created, businesses are starting and people are spending more money on goods and services. Entrepreneurship is a major driver of economic growth. As the number of influencers has grown and they've become more popular, influencers are helping to grow the economy, as well.

Entrepreneurs create new markets and also create competition. For example, Uber was started to fill the need for more taxis, and soon several ride-sharing companies sprang up. As new companies grow, they hire more people. Entrepreneurs also encourage innovation. This is demonstrated by the vast number of startups that introduce new technology to the world.

Influencers can help the economy in similar ways. They have created a new way of making money on social media, and they also create new jobs because they need help creating new content. As more people become influencers, the competition between them grows. Influencers also get followers to join new social media platforms to see their content. As entrepreneurs, influencers create businesses and add a few unique features that boost the economy in a socially connected world.