When you are the owner of an online business, you are in charge of it all. You can work anywhere in the world. You can work any time you want to- and still make a living. Most online businesses require little to no investment, which makes them perfect for an entrepreneur who is a bit short on cash. Check out the Wealthy Affiliate to learn more about starting an online business.
Following is a step-by-step guide for starting your own online business.
The very first thing you must do is determine your business structure. You will either operate as a sole proprietorship, corporation, or LLC (limited liability company).
A sole proprietorship is the simplest type and you are not required to file any paperwork to get it set up. An individual or a husband/wife can operate as a sole proprietorship. Of course, you must keep in mind that as a sole proprietorship, you will not be protected from any debts/obligations owed by the business.
This is the very reason why most people choose to form an LLC. In this case, the owners of the business are protected and are not personally held liable for the debts/obligations of the business.
Typically, an LLC is more flexible and doesn’t require as much record-keeping/reporting as a corporation. However, if you plan to bring in money from outside investors, it’s a good idea to form a corporation.
In most cases, as a small business, you will file the documents in the state where you are located. When you do this, you will be able to avoid the additional costs of registering in your state and hiring a registered agent who is out of state. Of course, if you do expect to have nationwide activity or want to garner some venture capital, it’s advisable to incorporate in Delaware.
You will do well to take some time to think of a unique name for your business. A name that is unique will do the following:
Once you have thought about a name you’d like to use, do a quick online search to see if there are any similarly named businesses. In addition, you can visit the website of the U.S. Patent and Trademark Office and search through trademarked names to see if yours is unique from the rest.
Once you have decided on a name for your business, it’s time to register a domain name for your business. This is the web address for your business, usually ending in “.com”. To check the availability of the domain name you want, simply go to the address bar of your internet browser to see if there is already a website with that name. There are companies that offer domain registration, simply create an account, tell them the name you want to use, and pay a yearly fee.
In order to form a business entity, you must file documents with the state agency that handles business filings. In addition, you will be required to pay a filing fee, which varies from one state to the next. Once you have officially formed your LLC or corporation, you will receive a certificate stating that the new business exists.
Visit the website for the Internal Revenue Service to obtain a federal tax ID. If you are a single-member LLC or a sole proprietor, you can use your social security number instead. In addition, you are going to need to have a business bank account and if you plan to process transactions through your website, you are going to need an online payment service such as PayPal.
If you will be selling things online, you are going to be required to collect and pay the sales tax for the transactions that take place in the state where you have a physical presence. However, the procedures vary from one state to the next and it’s advisable to contact your state’s tax office and/or an accountant to learn what you are responsible for.
In addition, it’s a good idea to check with the city/county clerk to find out if you are required to hold a business license or register a business name/DBA.
In order to get your website up, you are going to also need to purchase web hosting, which will usually be offered by the company that you register your domain through. Hosting is what gives your website a place to live online.
While it’s possible to set up your own website, unless you are a web developer or designer, you are going to be facing a steep learning curve. If you do have the budget, it’s a good idea to hire a professional to assist you with some/all of the following: creation/insertion of your logo, optimizing your website for search engines, creating text/images, configuring the site to look the way you want, and more.
In conclusion, once you have chosen a name and structure for your business, file the appropriate paperwork, and get your website up, you’re ready to start making money. Of course, you must keep in mind that you can’t wait for customers to come to you. You are going to have to get your name out there. Check out Wealthy Affiliate for some business ideas.