In 2020, millions of people found themselves at home with little to no hope of making money. Some are still trying to figure out how to create steady streams of revenue in this world of stay at home and social distancing.

That’s why sites like Patreon have exploded in popularity. In the first few weeks of COVID-19’s arrival in the United States, tens of thousands of artists, musicians, and other creators turned to Patreon as a new source of income.

The number of users has only grown since then and so has the number of subscribers. Through Patreon, people have found new, previously untapped streams of revenue to help them survive.

What is Patreon?

If you haven’t heard of Patreon before, it’s a pretty simple concept. In fact, the root idea has been around for centuries under a different name.

During the Renaissance period, royal and wealthy patrons would pay money to support the livelihoods of popular artists and musicians. The artists could then continue to work on their art without having to worry about how they were going to pay rent or buy food.

These days there are fewer wealthy patrons out there willing to gift an artist $1,000 a month to live off of. However, there are plenty of everyday people willing to each give their favorite artist $10 a month to live off of.

That’s the idea behind Patreon. Artists offer special insights, perks, and videos to their work for a small, monthly fee. When an artist pulls together enough patrons, they’re able to work on their art while not having to worry about everyday living expenses.

Who uses Patreon?

While artists and musicians are the most likely to use Patreon, it’s something that can also be used by other types of creators. According to the website, Patreon creators include podcasters, video creators like YouTubers and Twitch streamers, visual artists, gaming creators, writers, educators, and more.

If you can think of a way to create content for your fans, Patreon may be a good option for you.

How does Patreon work for creators?

When you create a Patreon account, you’ll be asked to create membership tiers. The number of tiers is up to you and so is the price. Each tier includes a price and details on what the patron will receive in return for paying that price.

Take for instance Patreon creator Amanda Palmer. Amanda is an artist, writer, musician, etc. with more than 13,000 patrons. She created three tiers for her patrons.

· $1 gets a patron access to her patron-only posts and early invites to her events.

· $3 gets a patron everything in tier 1, plus content emailed directly to them that they can keep.

· $5 gets a patron everything in the previous two tiers, plus “random surprises”. They get to see work she doesn’t want to share with the public.

While that may or may not excite you, it does excite her followers. To them, $5 a month is a small price to pay in return for an exclusive insight into their favorite creator.

Through Patreon, creators can create a semi-steady form of monthly income that will allow them to continue their work.

What kind of content would I have to create?

The great thing about Patreon is that you’re already creating, now you’re just monetizing the process of creating. With Patreon, you keep doing what you do, you just offer fans exclusive access to it.

Take for instance the user Kurzgesagt — In a Nutshell. The company creates YouTube science videos and has more than 5 million subscribers on the YouTube platform.

For $5 per month or more, a Patreon subscriber gets to see his or her name in the YouTube description of one of Kurzgesagt’s videos. That’s it. It takes Kurzgesagt less than a minute to add a name into a YouTube description and earn $5.

Just like all the content you create, you need to offer someone an ample return for what he or she pays. $5 might be something you’d pay to see your name in a YouTube description, $25 probably isn’t. That’s why $25 patrons of Kurzgesagt get their name in the description as well as autographs, access to music, and more.

The idea of Patreon is not to make more work for yourself, but to use your work to make more money for you.

What does Patreon charge?

Obviously, Patreon does not provide this service for free and so it’s going to take a cut of the profits. There are three payment plans Lite, Pro, and Premium.

The Lite members pay 5% of what they make to Patreon, but they receive fewer benefits from the service. The Pro members pay 8% of what they make and the Premium members pay 12%.

That’s not the bottom line, either. Before you see the money hit your account, Patreon also charges a credit card processing fee for each Patreon pledge.

In other words, you may get 100 subscribers at $5 each, but you’re not going to make $500. The odds are you’ll make closer to $400 when all the fees are taken out.

How do I know if Patreon is right for me?

While Patreon may appealing, it’s not for everyone. Before you open an account, consider the following.

Does it help me meet my overall goals?

Artist Nate of Nate Does Art wrote an interesting blog post about just this issue. In it, he tells the story of an artist who had a Patreon account and then canceled it because he never felt like he wasn’t giving enough to his patrons.

Nate ultimately comes to the concludes that if Patreon helps you meet your professional or artistic goals, it’s worth it. If it doesn’t, then it’s going to take up more time and add more stress than it’s worth.

Do you work well under a deadline?

Patreon user and artist Emily Hare wrote down her thoughts about Patreon in a recent blog post. Emily says she’s found that offering a monthly plan is the best way to make money through Patreon.

However, that monthly plan also means accountability. It means that you have to post regularly to fulfill your commitments to your patrons. The ability to work well under a deadline will be very important if you want to be successful with Patreon.

Do you already have a following?

Probably the most important question of all is do you already have a following or are you trying to create a following?

Andrew Sims at Hypable Impact looks at this very issue. According to Andrew, if you already have a following and you’re looking for a new way to monetize that following, then Patreon may be a great solution for you.

However, if you don’t have a fan following already and you’re trying to use a Patreon account to create one, then Patreon is not for you.

Patreon is not the ultimate solution

No matter what your situation, remember that Patreon is not a get rich quick solution. It’s not going to solve all of your financial problems. If you think it is, then you’re going to be sorely disappointed.

You need to think about Patreon as another revenue stream. Another, as in a revenue stream in addition to the ones that you already have, not in place of them.

A few months ago, I wrote a post called Obtaining 6 Buckets of Income.

The post is based on the idea that if you allow all of your revenue to come from one or two sources, then you’re leaving yourself vulnerable. If one or both of those sources of income dry up, your business dries up as well.

By having multiple sources of income (6 buckets) you’re giving yourself options. Now if two sources of income dry up, you still have four more to fall back on.

Think of Patreon as just another piece of your entire income puzzle. It’s a stream of revenue, not all of your revenue.

Written by Erika Towne

We work with entrepreneurs and small businesses to help them automate their marketing.