8 min
Voice acting is an incredibly rewarding career that can bring great creative and financial rewards. However, to execute it successfully, it is critical to understand the basics of running a business and the associated regulations and responsibilities.
In this article, we'll discuss the definitions and requirements of common business entities such as LLCs, S corps, DBAs, as well as some dispensing some critical tips that every voice over artist should know about running their own VO business. By the way, did you know that the most common business entities for voice actors are limited liability companies (LLCs) and S corporations? We’ll cover that and more, so let’s get started and dive into the business side of VO now…
An LLC, or Limited Liability Company, is a type of business entity that is popular among small business owners due to its simplicity and protection. It combines the flexibility and tax benefits of a partnership with the limited liability of a corporation. An LLC offers members liability protection from debts, obligations, and liabilities incurred by the business. It also allows for pass-through taxation, meaning that profits and losses of the business "pass-through" the LLC and are reported on the individual member’s tax returns. LLCs can also be established in any state and can be owned by any number of individuals or entities. It is often the preferred entity for small businesses since it offers limited legal protection, as well as flexibility in taxation, management, and ownership.
An LLC provides limited liability protection, which means that your personal assets are protected if the company is sued or goes bankrupt. This is especially important for voice over artists who work independently and may not have the resources to cover legal fees or damages in the event of a lawsuit. Because an LLC allows for pass-through taxation, the profits and losses of the business will be reported on your individual member’s tax return rather than being taxed as a single entity. This can provide you with greater flexibility in terms of your tax filings and can potentially save you money.
Another reason it may be in your best interest to start an LLC is it can help you establish a more professional-looking business structure and brand name. On the other hand, operating an LLC requires additional administrative work and can be more expensive than other types of business structures. And setting up an LLC may also require you to register with your state and pay additional taxes. For these reasons, it is important for you to weigh the pros and cons of an LLC before deciding if it is the best option for your business.
Setting up a business entity is not just about protecting yourself from liability, it's about investing in the future of your voiceover business.
An S corp, or S corporation, is another business entity popular among small business owners, and is what I have for my business Anne Ganguzza Voice Productions. Unlike a traditional corporation, an S corp is a pass-through entity for federal income tax purposes, meaning that profits and losses of the business are reported on the individual member’s (or shareholders’) tax returns who face fewer tax liabilities and can obtain more deductions, rather than being taxed as a single entity.
However, an S corp is subject to certain restrictions, such as a limited number of shareholders and a single class of stock. An S corp also provides limited liability protection to its owners, meaning that the owners cannot be held personally responsible for any debts, obligations, or liabilities incurred by the business.
You may need an S corp to benefit from the pass-through taxation of profits and losses. (My SCorp has saved me a substantial amount of $$$ in taxes!) In other words, you will be able to report your business income and losses on your individual tax return rather than being taxed as a single entity. The company's income is passed through to the shareholders, who report it on their individual tax returns. This means that the company does not pay federal income tax at the corporate level, which can result in significant tax savings for the artist. Additionally, S corps can deduct certain expenses, such as health insurance premiums and retirement plan contributions, which can further reduce the artist's tax liability.
S corps have stricter rules and regulations than limited liability companies (LLCs). There are some drawbacks associated with an S corp, such as a limited number of shareholders and the single class of stock. And an S corp must follow certain rules and regulations, such as filing an annual tax return and providing certain documents to the IRS. This can result in more administrative overhead for the artist, which may be a disadvantage if they prefer a simpler business structure. I currently have my accountant, who is on a monthly retainer, handle all of the associated administration and paperwork, which for me, still results in many tax advantages and savings from my previous DBA status.
A Doing Business As (DBA) is a business entity that allows a person or company to conduct business under a different name than the legal name of the business. For example, if your name is John Smith and you want to do business as “Smith Voice Acting,” then you would use the DBA name "Smith Voice Acting" when filing paperwork.
DBAs are typically required by state and local governments to ensure that businesses are operating under transparent and legitimate names. They are also used to help distinguish between different types of businesses that may have similar names.
To file a DBA, a business owner must typically submit a registration form with the appropriate state or local government agency and pay a fee. In some cases, the business may also need to publish a notice in a local newspaper announcing the DBA registration. I was a DBA for ten years in the State of California, and had to do all of these steps in order to declare and operate my business officially. There was a small fee for this, but being a DBA allowed me to officially "open" my business as well as have my own separate business bank account.
It's important to note that a DBA does not provide any legal protection or liability protection to the business owner. It simply allows the business to operate under a different name than its legal name.
You may need a DBA if you are using a different name for your business than the one listed on your legal documents. Having a DBA can help separate your personal finances from your business finances, as well as help protect your personal assets from business liabilities. Also, a DBA can help you establish a more professional-looking brand name, making you more marketable to potential clients and customers.
As you can see, there are many business options for you to choose from, and deciding on a business entity depends on your specific business needs.
Disclaimer: I’m not a lawyer or tax professional, so you should do your due diligence about legally setting up your business.
Robert Sciglimpaglia is a great resource for this. In fact, when it comes to legal matters in voice over, Rob wrote the book. He’s an expert on all things Voice Over Legal (use code ANG for $5 off!) and with a multitude of recent infringements (including VO BOSS!) taking place, plus confusion over usage rights, we asked him to share his wealth of knowledge. Listen to the Business of VO: Copyright, Trademarks & More episode here: https://www.voboss.com/business-of-vo-copyright-trademarks-more.
Once you have established your business, now it's time to start running it like a BOSS! Here are some additional tips and strategies to help you run your VO business like a pro.
A business plan is a roadmap that outlines the goals, strategies, and tactics that a voice over artist should use to reach success. It should include details such as the target market, services offered, pricing structure, marketing plan, and financial projections. Developing and following a business plan may be useful to you so you can stay focused and make sure you’re on the right track running your voice over business.
It is in your best interest to set up a separate business bank account to track all of your business income and expenses. This will help you stay organized and make it easier to file taxes and manage cash flow. This account should be used solely for business expenses and will help you to keep your personal finances separate from your business finances.
I always recommend that voice over artists create a professional-looking brand name and website to help build their businesses. This can include selecting a unique and memorable name, purchasing a domain with that name, creating a logo and tagline, and setting up a professional website that showcases your services and demo. Your website should include information such as your background, experience, demo, list of services offered, and contact information.
It may be a good idea to research the market to ensure that you are setting competitive prices for your services. This will help you attract more clients and stand out from the competition. When setting your rates, remember that you’ll be paying for your own taxes, equipment, and maybe even retirement and insurance. Make sure your prices reflect that.
Your business is your voice, and you need a demo to promote that voice. A Strategic Target Market Demo can help you promote your services and showcase your work to potential clients. A Strategic Target Market Demo will showcase your individual skills, strengths, and styles and help you to book the work to be a successful business.
To be successful in this business, you should strive to build relationships with potential and current clients. This can be done by networking with other professionals in the industry, attending events, and joining professional organizations.
Keeping track of all your expenses is an important part of running a business and filing taxes as a voice over artist. All business expenses, such as office supplies, equipment, advertising, and travel expenses, should be tracked and documented in order to be written off on taxes. Any business meals or entertainment should be documented and tracked, including the date, amount, type of expense, and purpose of the expense. And you should make sure to save all of your receipts, invoices, and other documents related to your business expenses in order to be able to write them off on your taxes legally.
You will need to understand and comply with the various tax regulations applicable to voice actors. Depending on your state, you may need to pay quarterly estimated taxes, self-employment taxes, or both. It is important to consult a qualified tax professional to ensure you are in compliance with all applicable regulations.
Running your business like a boss means taking charge of your dreams and turning them into reality, one fearless step at a time.
Understanding the basics of creating and running a business is essential for any aspiring or existing voice actor. Choosing a business entity, operating from a separate business bank account, setting up your online store, and understanding applicable tax regulations are all key elements to take you to the next level on your VO journey. With the right knowledge and preparation, you can set yourself up for success in your voice over business!
Thanks for reading!
Keep on rocking your business like a #VOBOSS
Whether you’re a complete novice or an actor, voice over artist, author with some experience and insight into audiobooks, a broad and specific discussion of the “Dos and Donts” of audiobook narration with Peter Berkrot will put you on a path to a deeper understanding of the art form and your personal and professional path forward.
Audiobook Workout with Peter Berkrot
April 20th
Check out my very first interview with Rob talking all about business entities here:
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About Anne Ganguzza
Recipient of multiple Voice Arts Awards for Outstanding Narration Demo - Anne Ganguzza is California-based Voice Over Coach and award-winning Director & Producer specializing in target-marketed voiceover Demo Production. Anne's production team creates SOVAS-nominated demos across several genres, including Commercial, Corporate Narration, and eLearning, and her VO BOSS podcast is the winner of SOVAS Outstanding Podcast in 2022.
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