Creator Economy

Creators In The US Are Now Considered Small Businesses

According to a recent press release, the Small Business Administration made it official that creators are now able to be official small businesses. Even though they always have been. Now it's just easier.

Photo by Detail .co / Unsplash

No longer do you have to say that all you do is make content and it's just a hobby. According to a recent press release from the SBA content creation is a legit small business.

So now when you're sitting at the kitchen table with your parents and crazy Uncle Bob you can say you're a legitimate business according to the US government

The recognition of the creator economy has been a thing lately with governments around the world taking similar steps, like Canada and some EU countries.

“Content creators are small businesses, and always have been,” said Daniel Abas, Founder and President of the Creators Guild of America. “Thanks to the vision of the SBA and its leadership, the federal government has unequivocally affirmed this status, and millions of creators stand to benefit. We look forward to our members taking full advantage of the access to capital that the SBA’s guidance provides, and are proud that the professional infrastructure established by the CGA has contributed to this outcome. Committed creators like Shira Lazar, founder of Creators 4 Mental Health and a member of our Advisory Board, and Avi Gandhi, CGA’s Chair of Government Advocacy, played instrumental roles in advancing this effort. This breakthrough is both a testament to their hard work, and a major step forward in the CGA’s mission to help creators.”

To be honest this just means that these content creators can now be taxed as business, so more revenue for the federal government.

There has been ways for content creators to get support from the SBA in the past, but it hasn't always been clear.

The SBA Just Made Room for Creators. Here’s What It Actually Means.

The short version

The SBA has clarified that qualifying creator-led businesses can be classified under NAICS 5121, Motion Picture and Video Industries. That category covers businesses whose main work is producing and distributing original audiovisual content, which takes in:

Podcasters and digital publishers
Video producers and filmmakers
Streamers and gamers
Social media entrepreneurs
Creative agencies

If that describes your core business, NAICS 5121 is where you start when looking for the right six-digit industry code for SBA programs.

Creator businesses didn’t just become real, and podcasters weren’t shut out of small-business support before. The change is that there is now clearer federal guidance on where they fit.

Why a code matters

Most creators don’t run a business that fits in one box. A single podcaster can be a producer, educator, consultant, event organizer, speaker, and publisher at the same time. That makes it hard to describe what you do, especially to systems designed around more traditional industries.

A clearer classification may help qualifying creators see where they stand with existing SBA resources, including financing programs, business counseling, and federal contracting.

To be clear about what this is not: it isn’t a new grant, it isn’t an automatic loan approval, and it doesn’t require anyone to register a business. You still have to meet the eligibility rules for each program you’re interested in. This is about recognition and classification, not guaranteed money.

This is exciting for the podcasting industry... especially the indies

Podcasting is creative work, but for a lot of people it is also the start of something entrepreneurial. That’s true even if you record in a spare bedroom, work without a team, are still growing your audience, or haven’t earned a dollar yet.

Along the way you may be building skills, intellectual property, relationships, and opportunities that could become a business. Plenty of shows never need to, and making something just because you love it is reason enough. But if you are building toward something, this is a signal that the work deserves to be taken seriously.

If you already run a creator-led business, look through the SBA’s guidance and resources to see what applies to you.

One more thing

Beyond the codes and the financing, there’s something worth noticing. For years, creating content has been treated as a side activity.

Just a hobby.

Just a passion project.

Something that might be a “real business” someday.

Creators have been building real businesses the whole time. This Federal recognition simply catches up to what many creators already knew.

So next time you feel like saying it's just a podcast. Consider the fact that it's easier to classify as an actual business endeavor.

This is exciting!

What do you think of this move by the SBA? Let me know in the comments!

-- Seth Goldstein

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