If you've made the decision to start an online business, first of all--congratulations! Starting a small business can be a wonderful journey, giving you the freedom to be your own boss and pursue your own dreams. And starting an online business can give you the added benefit of a low-cost start-up process: while you will certainly have expenses, you can the costs of running an e-commerce business low by working out of your home, saving money on office leasing costs and inventory warehousing.
Let's go through a few of the steps involved in starting an online business.
Find website hosting.
Before you can have a website, you'll need a place to put it. If you don't know what you're looking for, deciding on website hosting can be overwhelming--for a start, there are a few things you should keep in mind.
Read the fine print carefully. Though tedious, it's important to read through terms and conditions carefully so that you have a complete understanding of the services you're providing. Don't rely solely on the flashy promises found on service providers' websites, which is far from a complete list of the terms.
Make sure your website hosting package includes analytics; this probably means you'll have to go up a package, but the tools for tracking your customers, where they're coming from, and how they're finding you will be invaluable. Without them, all of your Internet strategies are just shots in the dark.
Create your website.
Those of us who are not designers have two main choices when it comes to designing a website: hire a designer, or purchase a template. Each has its advantages and disadvantages. A designer is able to work with your ideas and truly customize your website, using a human's intuition.
A template, however, is far more affordable, and you can certainly design a website that will serve you perfectly well. You can always upgrade to a more complex website when your budget allows.
Register your business.
Many small online businesses start out as a sole proprietorship, a type of DBA. This is the perfect business structure for an individual who wants to keep costs low: while the owner of a sole proprietorship (called the sole proprietor) is legally responsible for any debts or obligations of the sole proprietorship itself--if you aren't taking out large business loans and signing leasing contracts, you don't have to worry about defaulting on them!
(And, if your business does take off and you find that you do want the extra security of limited personal liability, you can always incorporate when it becomes necessary.)
To register your online business as a sole proprietorship, you'll file paperwork with your state or county. Terminology varies from state to state, but when you're looking on your government website for information, you should find the sole proprietorship filing under one of these terms:
- Assumed Name (Texas, Minnesota, Michigan, others)
- Assumed Business Name (Oregon, Idaho, Illinois, others)
- DBA or Doing Business As (Utah, Massachusetts, others)
- FBN or Fictitious Business Name (California)
- Fictitious Firm Name (Nevada)
- Business Certificate (New York)
The registration process is relatively simple: download the application from the appropriate governmental website (or apply online, if applicable), sign the form (note that some states and counties require an original, notarized signature, while others allow you to fax in a signature. Filing fees range from $5 to $120, again depending on your state or county.
Obtain any necessary business licenses or permits.
A sales permit, also called a seller's permit, is necessary for any business selling services or goods--it's safe to assume that your e-commerce business's purpose falls under this requirement.
You should check with your state, county, and city's business license and permit requirements, as each level of government has its own set of requirements. Try your Secretary of State's corporations division, your County Clerk's Treasurer-Tax Collector, and your City Hall.
Stay informed.
It's important to stay compliant with state and local laws, and it's your responsibility to make that compliance happen. To this effect, there are a number of steps you can take.
One of the best things you can do for your new online business is to meet with a business advisor who can help make sure all the necessary business requirements are on your radar: IRS filings, your business plan, and so on. SCORE provides free business advisors and mentors who can answer many of the questions you'll have early in the process.
SOURCES:
Sarah Kolb - Business incorporation and copyright registration specialist. Freelance book editor. Senior content editor/writer.
