The concept of starting an online business can seem relatively simple. For example, if you’re a blogger or web designer, you can just create a website and get started, with the hope clients will come to you, right?
In reality, if you want to start a legitimate business, it can require more than that to establish a professional, legal presence.
The following are some of the steps you should take when you’re setting up your online business.
Choose a Structure
With any business, whether it’s online or brick and mortar, you need to choose the appropriate structure. You may opt for a sole proprietorship, but if you want to appear more legitimate and also give yourself some level of legal and financial protection, you might opt for a limited liability company or a corporation.
There’s no legal requirement that you form any kind of business entity, but it prevents your personal assets from being taken away from you if you were, for example to face a lawsuit. It can also just make you look more professional to potential clients or even employees if you’re an LLC or even a corporation.
Decide Where You’ll Form Your Business
With an online business, you might have options in terms of where your business is formed if you’re establishing an LLC or corporation. If you plan to be a website or online business with most nationwide activity, you might choose a state where it’s most advantageous to do business, but you might also have to then register to do business in the state you live in, and hire a registered out-of-state agent.
This is where things can get complicated, so you should speak with a professional about the best options.
Decide on a Name
Choosing a name for any business is extremely important, but probably even more so if your business is going to be online. It’s your name that’s going to help people remember you, and help you cut through the massive amount competition you’re likely to be facing online.
When thinking about a name, consider things like existing trademarks, how likely you will be to get a matching domain name, and any state law requirements regarding how you can name your business with regard to your state entity name or names.
Protecting Your Customers
Customer protection and security should be top concerns for online businesses, particularly if you’re e-commerce based. You need to ensure that after setting up your website, one of the next things you do is take steps to protect users and customers from identity theft.
Also, if you have an online business you need to make sure you’re charging sales tax correctly. If you have a physical location somewhere, you have to collect all applicable local and state sales tax. If you don’t have a local presence, such as a store or warehouse, you don’t have to collect sales tax.
Check with business advisors to see the specifics of what you need to do in terms of customer protection, and tax collection.
When you’re starting an online business it may seem easy since you can essentially work from anywhere and you have a lot of flexibility, but there are critical considerations to keep in mind as well.
