Influencer Marketing for Small Business: 7 Steps, Costs and an Example

Step 1. Pick one goal and the number that proves it

Write the one goal’s number down before the first DM.

A first pilot for an online shop usually aims at sales, the bottom of the marketing funnel, because codes make the result countable.

Step 2. Size the budget before you pick anyone

Our method uses two formulas:

• Pilot cost = sum over all creators of (fee + gift cost) + your hours × your hourly value
• Gift cost = product cost + shipping
• Margin per order = price after the creator’s discount − product cost

Shipping the customer pays stays out of the margin.

Ten nano posts (assumption) at $10–$100+ each³ come to about $100–$1,000+ in fees. Two micro feed posts (assumption) at $100–$500 each³ add $200–$1,000. A gift-only round swaps fees for product and shipping. The candle shop below spends $908 in cash on 14 creators (example by our method; every input there is an assumption).

For commission setups, see the affiliate program for small business.

Step 3. Find creators without paying for a platform

Four free routes cover most of a small shortlist:

1. Your own followers and the posts that tag you. Someone who already posts about you needs no pitch.
2. Customers who leave reviews with photos. The same habits that help you get reviews surface them; see how to get customer reviews.
3. Hashtags from broad to local. For a soy candle shop that could be #candles, then #soycandles and #handpouredcandles, then a city tag such as #portlandmakers if the shop ships from Portland.
4. Creators who tag your competitors. Open each competitor’s tagged posts and note who posts there.

Step 4. Vet them before you write

On each profile, check five things:

• [ ] Fit: the creator posts in your niche and reaches your customers’ location.
• [ ] Engagement rate: computed with the formula below.
• [ ] Comments: they read like real people, not emoji strings or generic praise.
• [ ] Disclosure: past branded posts carried one.
• [ ] Brand safety: nothing in the recent feed you would not want next to your product.

Our engagement rate is (likes + comments + shares + saves on the last 10 posts) ÷ (10 × followers). The 10-post window is an assumption of our method. Rank candidates against each other on the same platform and in the same niche. Published benchmarks differ by source and platform; Sprout Social puts the average for nano Instagram accounts at about 2.19%².

Here is a worked example; every figure in it is an assumption:

A ranks first with half the following. Don’t rank by follower count.

You now have a ranked list.

Step 5. Send a short DM, then a one-page brief

Keep the first message to five lines:

1. Who you are and what you sell.
2. Why this creator: one specific post you liked.
3. Decide whether the offer is a gift or a fee; you can also combine the two.
4. What you would want in return: one post, by roughly when.
5. A question that is easy to answer yes or no.

Here is a filled-in sample for the candle shop: “Hi, I run a small shop that hand-pours soy candles. Your post about your reading corner is why I’m writing. I’d like to send you our cedar candle as a gift. If you like it, one post with your own code would be great, any time this month. Can I send it?”

If they say yes, send the brief.

If the deliverable is a giveaway, the formats are in small business giveaway ideas.

Step 6. Put it in writing and disclose every post

The agreement fits on one page. Tick off each clause:

• [ ] Deliverables with dates
• [ ] The fee or the gift
• [ ] The personal code and the tagged link
• [ ] The disclosure wording
• [ ] One review round before posting
• [ ] The payment date
• [ ] Your right to reuse the content

Reuse rights decide whether you can run the creator’s video as an ad; see facebook ads for small business.

The FTC rules that apply:

• Free product is a material connection. A creator who gets an unsolicited gift should disclose it clearly and conspicuously⁴.
• The disclosure must be hard to miss and placed with the endorsement message itself⁵.
• A platform’s built-in label may not be enough, so the creator should add their own disclosure too⁴.
• The advertiser should monitor its creators’ compliance and act to remove deceptive posts. A brand can be liable for an undisclosed endorsement⁶.

These come from the FTC’s Endorsement Guides, revised in 2023⁷. The FTC’s separate rule on consumer reviews (16 CFR Part 465), which also covers testimonials, has been fully effective since October 21, 2024. Under it, a court can impose civil penalties of up to $53,088 per violation⁸.

Tax: for payments made on or after January 1, 2026, the Form 1099-NEC threshold is $2,000, up from $600⁹. A creator you pay $2,000 or more in a year needs one.

Step 7. Count orders per creator and decide

Cost per order = (that creator’s fee + gift cost) ÷ orders with that creator’s code or link. Compute it per creator and per tier, never only for the whole pilot.

Keep any creator whose cost per order is no higher than your margin per order. Cut one above it, unless you track repeat purchases and they cover the gap. If a creator brought very few orders, run one more round before you decide.

Compute ROI on margin as (orders × margin per order − cost) ÷ cost; an ROI on revenue treats product cost as profit. Codes undercount buyers who order later without the code, so treat the result as a floor.

You now have a keep or cut list.