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The Ultimate Guide to Starting Your Online Business

by | Jun 11, 2018 | Business

19 min read

POP QUIZ TIME:
Which of these is your current plan for starting an online business?

 

  1. Meh, I’m not much of a planner, I’ll cross that bridge when I come to it
  2. I’ve got a bit of an idea on some of the legal stuff, and what my overall plan is, but no definitive plan in writing
  3. I’m all over this like white on rice! I’ve got my business plan set up, my structure, and I’m going to rock this whole entrepreneur thing – I’m ready!

Whichever choice you picked, you still have some preparations to do – I almost guarantee it!
This is why I wrote this ultimate guide to starting an online business!

As an entrepreneur, sometimes you can’t tell if you’re headed in the right direction.
Luckily, I found I had done at least a few things right which helped my business in the long run.

When I quit, I had the majority of these things done, but I realize now that I could have done even more to prepare myself.
I was relieved to realize that I had done some good prep work such as filing the dreaded paperwork and setting up accounting (it’s not that bad, I promise)!

I’ll outline for you things that you need to do before you quit your job, and a few more things to go the extra mile.
You’ll have to do them anyway, so you might as well do it while you’re still getting paid at your 9-5 if you’re still there!

**Disclaimer** I am not a lawyer, trademark specialist or licensed accountant. This advice is to be taken at your own discretion and always consult your lawyer or accountant for professional advice. I’m not responsible for any action or inaction you take for your business, and you can see our Privacy Policy and Disclaimer pages for more information at the bottom of this page. Phew, that’s over! 🙂

 

By going through this list, you will:

  • be able to speed up your progress before even starting
  • increase your chances of success
  • paint a detailed picture of where you’re headed
  • identify your reasons and motivations for starting your business
  • be prepared for investors, partners, or lawyers

Let’s go over the ways I recommend you get started before you even hand your boss your crisp two-week notice.

 

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1 | Do Your Research

Identify Your Why

You need to know what your passionate and deep reasons are behind starting your company. If you’re looking to just make some money, you’re going to burn out – and quick!
You need to dig deep and figure out those reasons why, so that you can remind yourself of them during the inevitable rough hurdles you will go through.

Some questions you should ask yourself:

  • Why do you want to start this business?
  • What is your ‘why’ or reason?
  • What is your brand going to accomplish?
  • What makes you feel passionate about this?

Study Your Niche

Find out what the hardest things will be for your niche, so that you know what to expect.

Google things such as “Things I wish I knew when I started (a homemade business/selling digital products/an online business).”

Whatever your business is planning to be, you need to do some background information before you begin investing a large amount of time and money into this.

You want to be in the throes of what other entrepreneurs are currently struggling with so you can learn from them.
Learn everything you can on Youtube, Pinterest, blog posts, and ask anyone you know who has experienced or dealt with it.

Here are a few things you should keep an eye out for when researching:

  • Who is your audience?
  • What are the common sales strategies?
  • What are the common marketing strategies?
  • Who are your competitors?
  • What do you like and dislike about your competitors?
  • What are the common tools and softwares, and how much do they cost? What are some other costs you need to be aware of?

 

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2 | Create A Visual Road Map of Goals and Milestones

A classic:
Goal setting!

It’s been around forever – because it works!
You at least need to have a vague idea of where you’re headed, so you can see if you are on track or not.

It’s important to start with a couple of smaller goals, because everything after you start your business will probably change.
It will almost always take longer than you expected, too, so keep that in mind when creating your goals.

You don’t know what it will look like on the other side, so keeping a live document and adjusting these goals as needed will be helpful. For now, start out with a distant stretch goal, and a few closer goals.

Some questions to ask yourself:

  • Where do you want to be in three, six and nine months?
  • Where do you want to be in 1 year?
  • What metric or milestones will help you identify whether you are on track or not?
  • What are your financial goals?
  • What are your sales goals?

 

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3 | Find Support

The importance of a mentor/group/community

Knowing that you have some sort of support system to lean on when things aren’t going well is crucial. You never want to feel like you are in this alone.

Where will you go when you need help?
Who will you reach out to if you don’t understand something or are struggling or get stuck?

The chances are that there have been many others who have been in the same position.
Go out and find your people!
You can ask them for advice, help, gain friends, network, learn, and eventually start teaching and helping those who are struggling in the same areas.

A couple of good places for this online are Facebook Groups and Reddit.
A place to talk and post your thoughts and progress is going to be helpful to you. I promise.

I will add that sometimes the advice in these groups is not always right.
Be aware of this and always question what you’re learning – even from me (I think that’s a quote from Buddha, but I don’t think Buddha was on Facebook – lol)!

It’s also important to mention that friends and family are a great support, and yes, you will want to have their support as you start your venture.

However, if they aren’t entrepreneurs or haven’t taken on a similar adventure, they may not understand or feel the same way that you do about your business.
You are the only person who will be your businesses best marketer and supporter – so if you run into people who don’t support it as much as you do – screw ’em!

Stand your ground, set your boundaries, and reach out towards your support groups during the times you need to.

 

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4 | Identify your Strengths and Weaknesses

 

What strengths can you utilize?

What weaknesses do you need to outsource?

Where can you find resources if you need it?

 

What you’re strongest at means that you will spend less time learning and more time doing.

This increases your growth faster.

For your weaknesses, outsource if possible.

Fiverr, Upwork, Facebook groups – you can definitely find someone, and the best thing about Fiverr or Upwork is that it fits almost every single budget.

Let’s be honest – it’s a business you’re starting – you will need capital, and you should be able to afford $3/hour to outsource your weaknesses and move the needle quickly! 🙂

If you’re not skilled in photography but you know you need to get product photos, it won’t behoove you to spend three weeks learning photography. Outsource it as much as you can – it’s how you scale and grow!

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5 | Get Official: Business Structure and Legal Paperwork

 

Take yourself seriously! If you’re quitting your job, you will be the boss.

You’ll be calling the shots, be the employer if you hire a VA or employee, you’ll handle all of the legal paperwork and taxes until you hire someone to do these things. Making things official is obviously needed for legal reasons, but also for yourself. Having that mental realization that you’re just as official as any other business out there (hey, Microsoft still had to file with the state) should help you mentally understand that you’re ready to take on the business world!

Next, you will need to decide on a business name, and structure for your business.

 

Choosing a business name

Choosing a name can be a little difficult. You can use name generators online to help you come up with ideas. Take your time with this, it will be on all of your legal paperwork!

 

Here’s a list of sites you can use to generate business name ideas:

Namelix

Shopify Business Name Generator

Oberlo’s Business Name Generator

 

Check availability of your company name by searching your business name

 

Google the Business Name

You might be surprised that a winery in California has already taken your name (true story)! Which is okay, but if you have multiple businesses coming up in Google, you might want to choose another name.

 

Check if it’s available in your state

If you have a business name similar to another company’s, it could get confusing legally. You can go to your states Secretary of State website or your states Treasury website.

 

Check for Live Trademarks

You will want to check the United States Patent and Trademark Office (USPTO) site to see if someone has already coined your business name.

Tess Trademark Business Checker

It’s a very easy process, you simply go to the TESS website and type in the name.
If something comes up, check to see if it says “LIVE” or “DEAD”. However, even if it’s “dead” the patent owner can come back and still re-file to make it live.

 

Deciding on a Structure

Next you will have to decide what type of business structure you want to have. There are numerous websites explaining the differences between these choices, however the most common for those just starting out is either a Sole Proprietor, and a Single Entity Legal Liability Corporation.

  • Sole proprietor – most common for those just starting out. If you were to be legally sued, your personal assets will be in danger.
  • LLC (limited liability corporation) – This is the most common business structure in the US, and you can even use an LLC to file as a “single member LLC”. This protects your personal assets from being sued if that were to happen.
  • Partnership – This is for multiple members in your business, if you are starting your business with a partner.
  • Corporation
  • S-corporation – These are usually used for tax purposes once a business is starting to make a larger amount of money. Consult your accountant!Here’s an article from Entrepreneur.com talking about the pros and cons of each structure.

 

How to File Legal Business Paperwork

After choosing which business structure you want to be, the next step is to file for a business license and to file your structure. Many Secretary of State websites now have processes to guide you through deciding on a business structure and filing for your business license. Simply Google Secretary of State [Your State] to find the right website to file.

You don’t need to use LegalZoom or any other professional company to file your business for you. You can, however I found that it was very simple to fill out a form and mail it in or file online, and to me it wasn’t worth spending hundred (or a few hundred) to do that.

One very helpful resource is LLC University – a free resource which walks you through the steps you need for each state!

 

Licensing, Permits and Regulations

If you are selling products, you are likely to need a resellers permit, an EIN number, business insurance, or special permits depending on the state you live in and the products you plan on selling.

For those who want to purchase wholesale products and sell them retail, you will need a resellers permit and an EIN number for tax purposes.

 

Getting an Employee Identification Number (EIN)

 

 

You will need to get an EIN in order to:

– Open a business bank account

– Hire employees

– Getting a 401K or retirement investments set up

– To incorporate between business structures

– To file for business licenses

– To file taxes

– To get wholesale account approvals

How to get an EIN:

Once you have your business license (which should take around two weeks or so), you will then file for an EIN. This process takes literally ten minutes on the IRS website.

The IRS has exact instructions to walk you through filing for an EIN on the IRS website here.

This has to be the easiest process of filing business paperwork, but it seems to get people very confused. It’s simple! If you have questions or need help, please let me know!

Create a business plan - Ultimate Guide to Starting an Online Business The Success Mountain Jess Watters 5
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6 | Create a Business Plan

 

What’s a business plan?

This is a document you create which is essentially a business road map for your business. It outlines your goals, mission statement, structure and details on the plan you are going to use to achieve those goals. You want to know where you’re going, and have some sort of map that tells you if you’re on the right track or not.

 

Why do I need a business plan?

As a startup, you need a document to show potential investors, possible future partners or stakeholders, and lawyers

 

What should I put in my business plan?

 

You should have:

*Your business summary

*Description of your business

*Your mission statement

*An organization chart of what partners, employees, investors, owners and operators will be working in the business

*Business marketing strategies

*Financial plan

*Assets and liabilities

*Licenses, permits and regulations, with the due dates for refiling and expirations

This doesn’t need to be in a specific format, you also don’t need to hire anyone to do this – simply write it in a word document, keep it professional and move on to more important things!

*If you plan on showing this to an investor at any point – I would put more time and effort into researching what a business plan looks like, however if you are just starting out and you are on your own, I wouldn’t put my focus on this as much* 

 

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7 | Set Up Accounting and Bookkeeping For Your Business

 

Ah – the dreaded business accounting! This is something I BEG you to not wait on! It’s so much easier to have your bank account set up NOW and instead not have to go through your personal bank transactions at the end of the year during tax time.

Accounting is one of those things that everyone tries to avoid – but it’s really not as hard as you might think. Once you get things set up, it’s really easy to start managing and create a monthly routine for.

You’ll need a bank account, an accounting software, and a way to track your ROI and income.

A separate bank account

You will need an EIN to file for a business bank account. A lot of business owners just starting out like to use digital bank accounts to make it more difficult to obtain funds from it, as an extra protective measure for themselves. For this, you can use a Chase Spark account, or any other online bank account.

What I did was call all of the surrounding banks in my area and asked for information about the bank accounts. I found that a lot of banks charge large fees, monthly fees, and have a max number of transactions which I find obsurd!

 

Here’s a list of questions I asked:

*What fees are associated with this bank account?

*What requirements do you have for this account?

*Is at all of the fees that I would ever have to pay? (sometime they don’t tell you everything)

* How many transactions can I have in each month?

*What other things should I be aware of?

 

An accounting software

I use Quickbooks to pull my transactions from my bank. It makes it so easy, and the best part is that it learns what transactions go to which account over time.

 

A spreadsheet to track your ROI and income

You need to be tracking expenses (your accounting software should do this) but you also need to be tracking your ROI (return on investment) for each sale or activity that you are focusing on. Depending on what business you have (digital products, infopreneur, freelancing, an Etsy shop, selling on Amazon) will depend on how you track each of these things.

 

Since each of tehse businesses would track their ROI and income differently, I can’t give too much information on how to do that, unfortunately. The main thing to worry about is:

ROI = Net Income / Cost of Investment

 

Be stingy with your capital

Don’t buy a new laptop, microphone, camera, computer chair, desk, whiteboard, rent an office or (fill in the blank). You can’t afford it yet!

Unless you are starting off with a large amount of capital, zero place to work (the library?) and don’t have a PC to work off of yet, or need a printer to print shipping labels, don’t buy the fun shiny things yet!

Wait until you are at least a little in the green, and focus on paying attention to how much you would have to work to pay that item off.

Be mindful of what purchases you make.
What will the return on that item be?

Don’t forget about taxes

Of course, you need an accountant. However, once you start bringing in any sort of income, I HIGHLY recommend you start saving 30% of that income each and every time you are paid. Set this aside in a separate bank account and use it for your taxes at the end of the year.

You’ll thank me later!

 

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8 | Build your Systems and Processes

For those tasks that are repeatable or even simple tasks that will be on your to-do list, you should be identifying and writing them down.

Almost everything has a routine or a system to use. THis will save you HOURS of time as you move forward, and eliminates a lot of time and guessing that it takes for you to remember what to do next.

As soon as you realize that there are repeatable tasks to be done (such as monthly accounting routines, repricing your inventory, sourcing for new products, emails, etc) you will want to make systems.

Start writing down step by step what you need to do. Always adapt your routine. Make it a live document or list! This saves hours of time on your end now and in the future as you scale your business.

Action Steps:

  1. Use your business plan to help create your systems
  2. Write it all out
  3. Keep it a live document

 

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9 | Create your Office Space

Make sure you have a nice clean mental space for you to work in. This may mean a small corner cubby of your dining room, the library, coffee shop, or a spare bedroom.

Make sure it feels good to you – you want to be able to come in and feel ready to work. You don’t want to walk in and internally groan at your surroundings! Make sure it’s conducive to productivity.

Do you have a notebook, pen, whiteboard, books or bookcase, a nice candle to up the room’s morale, and/or some good productive music?

  1. creating your daily schedule
  2. importance of routine and planning
  3. keeping it separate in your home
  4. put your goals on your walls and desktop wallpapers

 

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10 | Get to Work!

Now that you have made things official, and started detecting and building your foundation, you need to get to work!

The hardest part is starting, but if you’ve done any of these steps already, you’ve already started!

So keep going, and keep taking action. The majority of people fail to take action.

Even if it’s difficult, try to break things down into the smallest steps, and do each one at a time.

Then move on and build. You’ve got this! You’re almost there!

 

Here’s a few remainder of things to help you get started:

 

1. Create your daily schedule

2. Create a routine and use a planner or Google Calendar to time-block your time

3. Print out your goals and put it on your walls, or computer desktop

 

 

The Final Step to Starting Your Online Business:

So, to set yourself up for having the most success, you will need to be planning ahead (even if planning isn’t your thang!).

You need to make sure you know what you’re getting into by doing your research, know what strengths you can play on and weaknesses to supplement. You can build your systems to know exactly the next steps you need to take, and you will have a much better idea of where your business is going before you start.

You’ll even have most of this done and in place, so that if you haven’t quit your job yet – and you actually do quit, you’ll be ready and prepared to take on the world!

To build your business you also will want to make it official with paperwork (remember, you’re just as official as the big businesses out there! Don’t let that imposter syndrome take you away.

Remember that any weaknesses you have, set aside some capital so that you can outsource it when the time comes.

Then take action on your plan!

If you’ve done all of these steps, the next step is to put in your notice!
Your journey is just beginning, but you will be so much better off having done a lot of this before you quit your job.

 

Is there anything you have questions on? Did I miss anything?

Please let me know in the comments – I want you to take action and start that next step in creating your online business so you can live the life of your dreams!

 

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The Ultimate Guide to Starting Your Online Business | The Success Mountain | How to start an online business step by step | #startanonlinebusiness #howto #onlinebusiness #ecommerce #businessregistration #startabusinesswithnomoney #workfromhome #stepbystep
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