Starting your own online business can seem overwhelming at first, but in reality, it can be quite simple. Take it step by step and you will find that the process is no where as intimidating as it appears to be.
The advice we are providing here is provided to you as business professionals, not as certified public accountants or lawyers. If you are unsure about any of the advice given, it is suggested that you consult with the appropriate council.
Do You Really Need to Establish a Business Entity?
It depends. If you are collecting funds in your name, and not accepting credit card payments, you may not need to. An example may be if you are providing free membership to your online group and you have a single sponsor to your site who pays you $1000 per month and writes the check to you personally as an independent contractor. You can avoid the paperwork associated with separate entity and keep things simple. However, there are many factors that would make it a very good idea to establish a legal entity for your business, many which we will explore in this session.
Small Business Administration
One of the best sites on the internet for obtaining information about starting a small business in the US is http://www.sba.gov. This is a very detailed and up to date site with both professional and legal advice. We highly suggest looking it over. We are going to help you sift though what is really involved when it comes to running a successful online group.
Business / Marketing Plans... Are They Really Needed?
Just the mere mention of the word "business plan" is enough to turn many people away from the ideal of starting their own business. Writing a formal business/marketing plan is a complex process that can take several months. The good news is that a business plan is unnecessary -- at least a formal business plan. Have you heard of the Home Depot(tm)? The founders wrote their business plan on a napkin. Formalized business plans are good for making sure you think of every aspect of your business, but are bad for actually turning your ideal into a reality. unfortunately, many people who engage in the formal business plan writing process never make it past the planning stage because "potential" issues stop them from taking the calculated risks associated with business. The fear of potential problems and unresolved issues becomes a more poerful force than the desire to start the business. Do not let this happen to you. We are all much more recourceful than we think. It is more difficult to find a solution to a potential problem than it is to find a solution to a problem one is facing.
If you are looking for investors, a formalized business plan may be required, or at least asked for, by most potential investors.
How Much Do You Need to Start This Online Group Business?
The opportunity we have presented to you is very unique in that there is an incredible upside potential and practically no downside. It is like buying a dollar per share stock that can sore to $1000, but can go no less than 90 cents. It is an opportunity for just about any and every individual who has at least a little money to work with.
Let's split the costs associated with getting started in monthly and one time columns. These are the costs that are specific to iGrOOps.com.
Keep in mind that unless you start making money right away with your group, you will need some "reserve" to carry you through until profitability (or at least you cover the $49 or $149/mo charge). This "negative income" in business is a major cause of stress for most people and period which most businesses never make out of. But iGrOOps.com is not like most businesses. First of all, the monthly expense of $49 for a single site is a very small amount for any business. But money is money and even $49 can add up quickly after many months.
The more money you have to work with, the more you can invest in marketing and promotion, which we will discuss in detail in a later training session. But what you really need is very different from what would be ideal to have.
What am I Going to Name My Business?
In this age, you should start by doing a domain name search for your business name. If the name is available, you can form an official company name from that domain name. There are also some requirements on naming your business if you have a certain legal entity, like LLC or corporation.
We discuss choosing an ideal domain name in detail in training session #4, Your Domain Name Choosing Registering and Moving
Choosing a Business Structure
This is the part you may want to ask your lawyer or accountant about. What works best for one person may not work well for another. There are many choices available to meet as many needs as possible for those who wish to start a business. For a great description, see http://www.sba.gov/smallbusinessplanner/start/chooseastructure/index.html
Protecting Your Ideas
You have an idea for an online group that will change the world. It is an amazing idea that will make you a fortune. The last thing you want is for others to "steal" your idea so you spend as much money as it takes to copyright and trademark your ideas and associated names. But you still are cautious, so you don't tell anyone about your idea and your site. Next thing you know you are broke and have very few, if any, members. Don't let this happen to you! There are billions of great ideas though up each and every day, but a tiny percentage are actually acted upon. One of the reasons is fear of someone stealing the idea. It rarely the idea that is responsible for the success, it is the execution of the idea. Do not let the fear of theft keep you from launching and promoting the heck out of your online group.
Very often just the use of your name in business will imply a trademark that you can legally defend if necessary. Official registration of a trademark just makes your trademark easier to defend if needed.
Paperwork... Ahhh!
Taking care of the needed paperwork is not that bad, really. The procedures and requirements are determined on a state by state basis. Look at your local state website for specifics. The good news is most of this stuff can be done online now.
Location, Location, Location (Doesn't Really Matter)
Where is your business going to physically reside? Most likely, in your home. This is the ideal home business because employees are not needed (although you can use "virtual assistants") and you simply need a computer with an Internet connection. We suggest getting a separate mailing address at a UPS store or some other business that allows you to have an address that does not require you to put "PO Box" or even "Box #".
The idea of a non-po box address is not to deceive customers, it is just to avoid the bad stigma associated with PO boxes thanks to the many mail fraud schemes over the last several decades.
Pros and Cons of Starting Your Own Business Entity
Consider starting with using your personal account or even PayPal business account, then after you are starting to make some money, make the investment in choosing and setting up the ideal business entity for your online group.
Some Final Advice
Don't NOT move forward because of fear of not setting up the business correctly and making the right choices out of the gate. Just jump into it and focus on getting members and making your online group a total success!
(Updated January 21, 2013)
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