The financial adviser to the world’s top-earning YouTube star, who makes $22 million a year, shares the advice he gives clients to grow their businesses

Michael Bienstock

Some of YouTube’s top creators are making millions off their digital brands at a rapid pace.
The influencer-focused wealth management company, Semaphore, helps creators like these sustain and growth their revenue.
Chief executive Michael Bienstock spoke to Business Insider about what financial trends he’s noticed in the influencer space and the top advice he gives clients.
Bienstock assists clients like Ryan, of Ryan ToysReview, who makes $22 million a year off of his YouTube channel.
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Influencers like 7-year-old Ryan of Ryan ToysReview, who is making an estimated $22 million a year, are profiting in a big way off their digital brands.

YouTube and Instagram are at the core of where most of these influencers make their money, from developing consumer products independently, to earning revenue from Google AdSense on YouTube.

As their businesses grow, creators will often work with a financial advisor. Michael Bienstock, chief executive at Semaphore, runs an influencer-focused wealth management company and helps creators like Ryan manage their finances and further expand their companies.

Bienstock spoke to Business Insider about some of the advice he gives clients and what financial trends he’s noticed in the influencer space.

The rapid growth of an influencer business

Clients typically join Semaphore for bookkeeping and tax help, but Bienstock said these initial services escalate quickly because of how easy it can be for an influencer to expand, adding employees and office spaces.

Influencer clients are different from traditional business owners because they are in constant need of more advanced planning, he said.

"When we meet them, sometimes they are earning $100,000 a year, and then all of a sudden they are earning $100,000 a month, and then a week," he said. "It’s really, really amazing."

Semaphore starts working with influencers once they are earning around $8,000 to $10,000 a month, he said.

"That’s when things start moving fast for people because it’s very difficult when you are starting from scratch to get yourself up to that level," Bienstock said. "But, once you do, then it goes radically quicker."

It can take someone three years to get to that earnings level, but from there, it can often take only 6 to 12 months to double it, he said.

Some of Semaphore’s first clients included the popular longtime YouTube creator Philip DeFranco (6 million subscribers) and the children’s internet sensation Ryan, of Ryan ToysReview (21 million subscribers). Now the company focuses completely on influencers.

"Usually it starts off with the basics, they start making more money than anyone in their family and they realize the part-time bookkeeping person isn’t going to work anymore," he said. "[The book keeper] can’t even understand what’s happening with these clients in their line of business."

The typical financial services

Semaphore helps clients hire employees, set up payroll, workers’ compensation insurance and liability insurance, and has also helped walk clients through the process of buying their first homes.

Bienstock’s most notable creator relationship is with Ryan of Ryan ToysReview and his family.

Bienstock and his team reached out to Ryan ToysReview around 2014, and had a conversation with Ryan’s dad about how complicated things would get financially if the channel continued to grow, Bienstock said.

"I felt like there was a tremendous opportunity to really build a company and a team," Bienstock said. "[Ryan’s dad] had never done it before, which was the case for all of our creators, and after a couple of meetings he hired us to help him turn what him and his wife were doing at home with Ryan into something bigger than just the two of them."

Ryan’s World Google search screenshot.

Ryan’s brand has since expanded into a toy line with the toy manufacturers and distributors, pocket.watch and Bonker’s Toys.

The toy line, "Ryan’s World," can be found at places like Target, Walmart, and Amazon.

Outsourcing is key for growth

The No. 1 conversation Semaphore has with its clients is about getting help, Bienstock said: At some point, a creator needs to outsource and build a team.

"They didn’t set out to build a business, they just did something they enjoyed or were having fun with, and it just started taking off on them," Bienstock said. "They are very much in the mindset that they need to do everything themselves."

A majority of the time, creators will respond back by saying, "I have to do my editing," he said. But he promises his clients that outsourcing is important and will ultimately help them in their success.

"You only have a certain amount of bandwidth, and you could be the best on Earth, but if you don’t bring in other people to help you, you’re only going to do a fraction of what you could do if you built a team," he said.

That’s what he’s seen separate creators in their different stages of growth, he said, and outsourcing should be looked at as a good starting point for anyone.

"If you’re by yourself, you have no ability to experiment or try new things, because you’re spending all of your time doing what works all day," Bienstock said.

From platform to platform

User generated content is only getting bigger, and although a specific platform could go away, the business is more about how you transition between platforms than the actual platform itself, Bienstock said. Having a team will leverage you, allowing you to try new things instead of only having the time to focus on what’s worked.

Internet stars like Liza Koshy and David Dobrik are a perfect example of this transition. They shifted their success on Vine – the short-form video app that disabled uploads in 2016 — to platforms like YouTube and Instagram and amassing massive followings of 17 million and 13 million subscribers on YouTube, respectively.

"You’re building a brand and relationship with your audience and that audience doesn’t care if they can find you through Amazon, YouTube, or Twitch," Bienstock said. "What matters is you and your audience actually building a connection."

Bienstock said addressing how a creator will pivot when their platform no longer exists is a key conversation he has with his clients.

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Source: Business Insider – aperelli@businessinsider.com (Amanda Perelli)