Successfully running and managing an Online Business requires that every owner begin, and maintain, some good, basic practices. Creating a business plan, paying taxes, acquiring the right business licenses, insurance and accounting – all of these are areas that should not be ignored.
Tip 1. Create a Business Plan
No one can reach their goals if they do not first know what those goals are. A formal, written business plan forces you to think about your goals, how will you obtain them, and in what timeline you are working.
But more than that, a business plan will allow you to develop an advertising and marketing campaign, obtain financing, create and stay on a budget, and prioritise the many management duties involved.
There are many free resources available which offer templates for a business plan and give you advice on how to properly fill out each section.
Tip 2. Get Legal
For any small business, there are legal requirements at the various levels of government which pertain to your specific industry. Depending on where you live, this may also require you to obtain certain licenses, such as a sales tax number, a vendor permit, or general business license.
It is always wise to ensure that you are following the letter of the law. After all, the cost of being found non-compliant with government agencies can be quite steep.
Tip 3. Pay Your Taxes
Whether you employ others, resell goods, or are considered self-employed, there are taxes you must pay for the privilege.
Anytime you buy and sell goods or services, there are taxes that will be due. And if you have employees, you will need to learn what payroll taxes must be withheld, as well as any self-employment taxes that may be due on your own earnings.
If you are unsure of the requirements in your locality, you may want to use the services of a good bookkeeping firm.
Tip 4. Obtain Insurance
The cost of not having your Online Business properly insured could be astronomical. Have you considered what might happen if you are personally sued due to a business deal gone wrong? Is bonding necessary in your industry? What about automobile insurance for business travel? Have you thought about health and life insurance?
These are questions you need to ask of yourself, and your insurance agent. The agent you use for personal insurance needs should be able to help you, or at least point you in the right direction.
Tip 5. Use Accounting Software
The time to worry if you have kept the proper business records, is not when taxes are due. If you do not have a professional accounting software package already installed on your computer, buy one now. It is much easier to keep track of receipts and business transactions on a daily, weekly, and monthly basis than it is to go back and attempt to recreate them once a year, under duress.
There are many great software programs that are easy to use, such as Quicken or QuickBooks. They are very affordable and some even offer live support. If you are more comfortable using someone else’s expertise, by all means find a good, local bookkeeping service you can use (and who may also be able to prepare your taxes).
Getting started on the right track with your Online Business is essential to your success. It is always easier to start with good habits rather than trying to retrain yourself, or trying to get a mess in order after months of doing things the wrong way.
About Sean Rasmussen
Good post sean
There is so much to consider when operating a business even one based on the internet
Thanks for the tips
Hi Sean,
I guess I’ve put off worrying about this until I started making money. I haven’t really written a business plan either. I have goals and a plan to achieve them but I don’t have an actual business plan.
Maybe I’m not taking myself seriously if I haven’t set my business up as if it was going to be a successful business from the start. I haven’t thought about any legal and insurance issues. There’s a lot to think about.
I had not thought about a business plan for the internet but now I am moving I started looking at things differently. So its just as important to get all the advice from your lawyer, accountant, and bank, when starting your internet marketing business.
As your online business continues to grow, like a traditional offline business there are certain things that need to be taken care of, such as the points in the article. Even if you don’t implement them at the beginning, it’s a great idea to at least think about what may be required in the future.
Thanks Sean,
Some things just can’t be avoided… I too have not really thought about the points raised here in this article & thought that I would just deal with them once I started actually generating a significant amount of money through online marketing first.
Hi Sean
I have more of a business plan in place since starting the IMPOTY study.
I did not think about insurance for an online business. Is this just a public liability insurance? This is a very important matter to address as we all need to be covered.
As a one person business, I personally found just keeping a spreadsheet of my income and expenses etc was much easier and quicker than using MYOB or Quicken, but I love spreadsheets and I guess not everyone knows how to use them (though they are fantastic once you do).
You are absolutely correct about developing good habits from the start. We must always put the correct money away for GST and tax every week.
Great article Sir……………….