If you’re looking to launch or expand your business into the online sphere, an Instagram business could be suitable for you. Instagram and other social media platforms can be surprisingly simple and effective e-commerce and marketing tools. 

Not sure where to start? We’ll take you through a few of the business legal considerations which might affect your Instagram business, from the Instagram Shop to throwing giveaways and give you some tips on how to hit the ground running. 

Is It Just A Hobby Or Am I Running A Business? 

The first thing to consider is whether your business idea is just that: a business, or a mere hobby. 

There is no key factor which clearly differentiates a business from a hobby. It depends more on your context and your individual circumstances. Overall, you’re more likely to be running a business if you intend or expect to make a profit as part of an organised, deliberate and planned operation. For example, if you keep account books, maintain financial records, have a separate business bank account or hold licences and qualifications, it is likely that you are a business-owner. 

On the other hand, a hobby is a pastime or leisure activity which is for your personal enjoyment or satisfaction. You can share both your hobby or your business on Instagram, but each will give rise to different obligations and responsibilities. 

There are some advantages to keeping your operations as just a hobby. You will be able to do things on your own terms and prioritise your personal enjoyment in the activity. You also won’t have to declare any amounts that you earn to the Australian Taxation Office (ATO) if you choose to sell them for cost of materials. 

However, if you decide to operate as a business, you will also be able to register for an ABN, which will simplify your business dealings and make you eligible for certain tax and super concessions. Creating a business also means that you can craft a brand identity which customers will come to know and trust. 

Deciding whether to launch as a business or keep your operations as a hobby will be an important first step to setting up your Instagram. Find out How Can You Tell When Having A Hobby Turns Into Running a Business to decide which is better for you. 

How Do I Use Instagram To Promote My Business? 

  1. Plan Your Business Strategy

If you’ve decided to launch as a business, the first step is to start documenting your ideas and mapping out your strategy. Consider who your target customer is and how best to reach them, how to create relevant photo and video content for Instagram which aligns with your brand image and what you will name your business. 

  1. Choose A Business Structure And Register For An Australian Business Number (ABN) 

There are three common business structures: sole trader, partnership and company. While operating as a sole trader is a cheaper, inexpensive and simple structure, incorporating into a company will offer you unlimited personal liability for any business debts.

You will also need to register for an ABN with the Australian Business Register. This is a unique 11 digit number which identifies your business to customers, suppliers and manufacturers. 

  1. Create Your Instagram Business Account

Instagram offers a unique ‘Business’ account with an array of features and insights which can be invaluable tools for your business. You can convert to a business account from a personal one without needing any official business status or verification. 

Whether you want to use your Instagram Business account as an informal marketplace, to sell items through the ‘Shop’ function or as a marketing tool, you will be able to: 

  • ‘Promote’ Instagram posts to advertisements which can target certain customers. 
  • Track ad performance and control your budget; 
  • Use Instagram Insights to better understand the overall demographic of your followers and how your content performs with your audience. Content performance is measured according to total accounts reached, profile visits and the number of likes, comments, saves, shares and replies on your content; 
  • Use Call-to-Action Buttons. These buttons will allow you to add certain ‘actions’ to your business account on Instagram, such as ‘Book Now’ for appointments, ‘Reserve’ for restaurant reservations, or ‘Order Food’ for take-out businesses; and 
  • Shoppable Posts which allow you to sell directly from your Instagram Business Shop. We’ll discuss this more below. 
  1. Set Up Your Instagram Shop

If you want to use your Instagram Business for more than just marketing but also as an e-commerce store, Instagram’s Shopping features have expanded significantly to become one of its brightest and most popular features. 

Through Instagram Shop, you can tag your business products in your posts and stories and users will be able to click on them to view more details in the Shop. You can then provide links to your website to purchase those products. 

Setting up an Instagram Shop for your business requires that you have an Instagram Business account and a connected Facebook Page. You will then upload a product catalog to Instagram (or you can sync your business products/services with an eCommerce partner). 

You will also need to have a website domain from which to sell your products from. This website will need a set of Website Terms & Conditions of Use to tell users how they can and can’t use your website, Products/Services Terms & Conditions to cover payment, refunds and delivery policies and also a Privacy Policy

You can find out more at How To Start A Business In Australia and When To Use eCommerce Terms And Conditions.

How Do I Ensure My Instagram Business Stays Legally Compliant? 

Instagram Giveaways 

Instagram giveaways often involve gifting some of your services/products in a ‘sweepstake’, a form of random lottery, or a ‘contest’, which involves some form of competition. 

Instagram’s Promotion Guidelines allow you to run giveaways, but you will be responsible for the lawful operation of the promotion. This includes designing the official rules, outlining offer terms and ensuring eligibility requirements are met (such as for age-restricted products/services like alcohol). You are also responsible for complying with any and all applicable legal frameworks. 

The Promotion Guidelines also require that you release Instagram from any association with your giveaway. You must therefore state in your promotion that it isn’t “sponsored, endorsed or administered by, or associated with, Instagram.

Read about whether your Instagram giveaway requires a permit, here. If not, our lawyers can help you with some advice on operating a competition

Buying Likes And Followers

While it may be tempting to try and spread your brand awareness by purchasing extra followers, it may cost your business brand more than you think. 

Buying Instagram followers does not guarantee greater engagement with your business content as purchased followers are often Instagram bots or inactive accounts. This means that you will not gain any long-term value to your content, your credibility could be damaged and you could risk having your account temporarily disabled or deleted by Instagram for breaching their Community Guidelines

Can I Stop Someone Else From Reposting My Business Content? 

Yes. If you are the creator of original photos or video content posted to Instagram, you automatically own the intellectual property rights in that content under Australian copyright law.

The legal effect of uploading your content involves essentially granting a license to Instagram for them to host and use your content in certain ways. But you are still the copyright owner and you can technically enforce your intellectual property rights against someone who publishes, reproduces or communciates your original content from Instagram without your permission. Find out more about how to protect your business from copyright infringement on Instagram here.

This also applies to you if you repost other creators’ content. Generally, if you haven’t created something yourself, try to avoid sharing it unless you have permission from the original creator. 

Need Help?

Starting a new business venture can be exciting but also overwhelming and we understand that you want to get it right! 

If you have more questions, we’re here to help. You can reach out to us at team@sprintlaw.com.au or contact us on 1800 730 617 for a free, no obligation chat

About Sprintlaw

Sprintlaw is a new type of law firm that operates completely online and on a fixed-fee basis. We’re on a mission to make quality legal services faster, simpler and more affordable for small business owners and entrepreneurs.

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