4 Things Every Growing Online Business Needs
It’s a quick transition from startup to success. One minute you’re hustling, trying every strategy in the book and hoping that something works. The next, you’ve got traffic and orders rolling in. For many hard-working online entrepreneurs, this is an exciting time. Finally, all of your hard work has paid off. Before you start celebrating too much, this transition means that you’re now a business. To save yourself a big headache at the end of the year, here are four things that you should get in order before you ever start making a profit. They may take a bit of time now, but they can save a lot of
A Business License
It doesn’t matter whether you’re earning your money from a brick and mortar store or online, every form of income means that you’ll have to pay tax. There is no set amount, though, and a little bit of creativity can go a long way. For many newly successful internet marketers, the first unpleasant surprise comes in the form of a tax bill. This doesn’t have to be so, however. Online companies can form their company in any state. Knowing this fact can make a HUGE difference come tax year. Now that you’ve got revenue coming in, it’s a good idea to incorporate. Since you’re online, many entrepreneurs choose to set up their corporation in states with lower taxes. Delaware and Nevada are popular options, although Wyoming is growing in popularity as well. Although you may want to get an accountant to help you figure out the details, incorporating can save you a ton of money in tax season. Reduced employment taxes, such as Social Security, and the benefit on long terms capital gains rates are just a few examples.
You don’t want to limit the options of your new company, but you certainly deserve the fruits of your labor. Now that you’re making a profit, it’s time to make a financial plan. Is there any way that you could invest this money to keep your business growing? Try to find a balance between what you put back into the company, and what you take for yourself. One of the biggest mistakes new internet marketers make is quickly quitting their day job the second they get their first check. Instead, transitioning into an online business should take place over time, planning each step carefully. Forming a proper budget and business plan are important steps for attracting outside investors. Would you invest in a company which couldn’t properly demonstrate its financial solvency? The answer to that is clear.
For potential clients, being able to call or email you is a huge advantage. It gives your company a sense of legitimacy and professionalism. Almost every website has, at a minimum, an online contact form. Ideally, it would be good to have a business address and a 1-800 number. Both of these services you get inexpensively in the form of a “virtual office.” Although you can still continue to run your business from wherever you choose, an office makes you look like a company that has been established for a long time. This is a great way to build your brand and make you appear larger than life, without breaking the budget you set above.
A Business Plan
You’ve likely got a pretty good idea of what you’re doing already. But now is a great time to put it in writing. Think back to the day when you first started. Remember how much easier it would have been if you just had a little bit more of a budget? When banks lend money to small businesses, they first look at your plan and history. Down the line, you might find that you’ve got a bulletproof plan and want to expand. By writing a plan now, you’ll be able to go to the bank and say “Here is what I wanted to do, and here is how I did it.” With that in hand, you’ll be able to prove that you can expand your business, securing the financial resources you need.
Start with The Basics
At first, it can seem like there is a lot of paperwork and red tape involved in business. Fortunately, the process does not have to be challenging. All of these steps can be completed in a couple days. Having them in place now when you just start to turn a profit will make your life much easier down the line. Take the time to find a professional incorporation service. They will handle the ins and the outs of the paperwork.