Content of the material
- Choose a business type
- 2. Have a website with current information
- Open a Business Bank Account
- Get a Business Phone Number
- 3. Choose a Business Name
- 6. Build Your Website and Choose Your Sourcing and Fulfillment Methods
- Obtain Necessary Licenses and Permits
- Set Up Your Accounting System
- 4. Connect with your community
Choose a business type
As long as you're the only owner of the business, you can operate as a sole proprietor, which is the simplest form of business entity.
"For most people that works just fine," said Tim Steffen, CPA and director of advanced planning at Robert W. Baird & Co.
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But many experts advise forming a limited liability corporation, or LLC, which would give you some liability protection as well as tax advantages. That requires you to register with any state where you conduct business.
Plus, if anyone else shares ownership with you, the business must be organized as an LLC, partnership or corporation.
2. Have a website with current information
As shoppers are increasingly moving toward online research before making purchases, it’s essential to have a small business website. Incorporating the basics – product information, hours, directions, and means of contact – communicate your legitimacy to your visitors.
Consumers visit websites looking for information, and if your website is lacking key business information – or even worse, has outdated information – they’re going to go elsewhere. Just having a website isn’t enough, anymore, website visitors want the most up-to-date and relevant content, so regularly updating your website is a must. It indicates that you’re active online, care about your products and services, and understand how visitors are using your site to inform their purchase decisions.
Regularly check your website content to ensure your new business is making the first impression you want by incorporating these key elements.
Open a Business Bank Account
For tax reasons and personal liability, it is advisable to separate your personal income from business income if your enterprise is incorporated. Open a dedicated business account for business transactions. Note that you will need an EIN to open a business bank account.
Get a Business Phone Number
Your business needs an official telephone line through which clients and suppliers can reach you during working hours. You can hire an answering service, sign up for a virtual business telephone service, or use Google Voice assistant.
3. Choose a Business Name
Choosing your business’ name is an important step in the startup process. Because your business will primarily function online, your chosen name must be available for registration as a business name in your state and within the digital space.
This means you will need to check whether the name you want is available as a:
- Business name in your state
- Domain name
- Username on each of the social media platforms you plan to use
If your chosen name isn’t available as a domain name or social media username, consider different permutations of the name, and remember that many domain name extensions beyond the original “.com” are available. Additionally, it’s important to check that your name and domain name aren’t impinging on any registered trademarks.
6. Build Your Website and Choose Your Sourcing and Fulfillment Methods
An online business’s website is as important as the physical location of a brick-and-mortar company, and you should put as much care into this part of the startup process as you would if you were location and lease shopping.
When looking at how you will build your website, consider available payment processors. For many online businesses, hiring a website developer to help build your site makes sound business sense.
The web host you choose is an important consideration as well. You can have a top-notch website, but it will do you no good if your host has too much downtime or if the speed of browsing your site is too slow.
In addition to checking out reviews online, consider asking your personal and business network contacts. Other online business owners in particular, can provide invaluable information about a web host’s reliability.
Depending on the products or services you’ll be offering, you will also need to evaluate and choose your sources of supply and inventory, as well as how you will deliver your product or service to your customer. Again, a number of options are available. Given the importance of having inventory on hand—or a good on-demand provider—and a reliable method of fulfillment, spending adequate research time on this aspect can mean the difference between success and failure.
Obtain Necessary Licenses and Permits
|30. Obtain a federal employment identification number by filing IRS Form SS-4 (unless you are a sole proprietorship or single-member limited liability company without employees).||Licenses & Permits for Your Business|
|31. Obtain a seller’s permit from your state if you will sell retail goods.||How to Get a Seller’s Permit|
|32. Obtain state licenses, such as specialized vocation-related licenses or environmental permits, if necessary.||Small Business License Requirements: 50-State Guide|
|33. Obtain a local tax registration certificate, a.k.a. business license.||50-State Business Income Tax Requirements|
|34. Obtain local permits, if required, such as a conditional use permit or zoning variance.||Local Start-Up Requirements for Small Businesses|
Set Up Your Accounting System
|42. Decide whether to use the cash or accrual system of accounting.||Cash vs. Accrual Accounting|
|43. Choose a fiscal year if your natural business cycle does not follow the calendar year (if your business qualifies).||Choosing a Fiscal Year|
|44. Set up a recordkeeping system for all payments to and from your business.||Bookkeeping and Accounting Basics|
|45. Consider hiring a bookkeeper or accountant to help you get set up.||Choosing the Recordkeeping System for Your Business|
|46. Purchase small business accounting software|
4. Connect with your community
Having a digital presence is incredibly important for bolstering credibility, but good old fashion face-time can do wonders to legitimize your new business, too.
Once your online presence is established (website, email address, and social media profiles), get into your local community and network. Business is all about relationships, and by forging individual relationships with local business owners, they’re more likely to refer customers to you, and be open to partnerships and collaboration. For a new business, this is a major win – when longstanding businesses vouch for new businesses, it adds another level of validity to your business. Another benefit is that networking locally will help your word-of-mouth referrals, which still remain relevant in this day and age.
Yet, for many new businesses, they don’t have local communities because they’re in the virtual space. Well, we have good news for you – there are still ways to connect online and share your expertise and build those professional relationships that will lead to future referrals and positive word of mouth.
Comment on other business’s blogs and social media profiles to show your engagement, as well as providing useful tips or feedback in those comments. Their followers and readers will begin to see your comments and value your interaction and information, and regard you and your business as trustworthy.
Another way to highlight your expertise is to contribute to HARO (help a reporter out). On this platform, journalists seek expert opinions and sources for their articles. This is where you can share your industry knowledge, and can garner a lot of exposure for your business. Being cited in a published article does wonders for brand legitimacy.
Getting your new business off on the right foot takes planning, but it’s possible with these four tips in your back pocket. A healthy mix of online and offline exposure indicates that a business is legitimate and ready to do business. Start implementing these guidelines today and watch how your business blooms.