Starting a Web Based Business
As an entrepreneur and lawyer, I have a bit of personal and professional experience on the topic. I do not claim to be a guru and I do not have a 7 step program to personal riches. Instead I will share my experience in starting a business and hopefully provide a little insight into the process.
What's In A Name?Shakespeare may have been right when he wrote that roses smell just as sweet no matter the name, but he never had to pick a domain name! Obviously the first thing to do when opening a web based business is decide what you are selling. If you are creating a blog, you are selling your stories or your experience.
Next, your new business needs a name. When considering a name, think about the domains that may be available. There are lots of new top-level domains available that are not as popular as '.com.' For example, this site, www.Melvin.law, has '.law' as a top level domain. The '.com' version of my name was taken. The other business that I will be discussing, www.birthday.toys, uses '.toys' as its top-level domain. Naturally that is an ecommerce site that sells toys and games. Not all domain re-sellers carry the new top-level domains , so if you see a top-level domain on the list that you like, shop around for a domain re-seller that carries it. I use 101domain.com, but there are many others that offer the same basic service.
When picking the name of your business, you should also consider what you are selling. I am a lawyer so a '.law' domain is an obvious choice. Certain ethical rules in Louisiana also limited the choices for my site. Perhaps your profession or field has similar rules.
When deciding on a name for my online toy store I considered several whimsical names that did not necessarily conjure up the image of a toy. When my daughter was two, she had an imaginary friend named 'SparkleWand.' So I kicked around that name for a while (even made it the name of my Amazon store) because of the sentimental value it had to me. Ultimately, I thought it was more prudent to make the name tell you what we were about. The classic example in my category is "Toys'R'Us". There is no mistaking what they sell. My recommendation would be to choose the most descriptive name you can so that your name tells people what you are all about without them ever visiting your site.
For blogs that are not ecommerce sites, think about your target audience. Are you starting a mom's blog or a blog about your woodworking hobby? The targets for these topics are quite different. Choose a name that identifies that subject or is a pun on a widely used term. So long as your intended audience is 'in on the joke' then it is fine to be playful in name.
Check with your state's secretary of state to see if your favorite business name is available or already in use. Also avoid trademarked names - even in the new top-level domains. For example, it would have likely been a trademark violation to register the domain for my ecommerce toy store as "ToysRus.toys". If someone has trademarked or otherwise started using the name you have chosen, then it is not going to do you any good and will just lead to litigation down the road if you are successful.
Form Is As Important As SubstanceAt this point the process, you have made the decision to pull the trigger and open web-based business. You have a name and some early creative ideas, but to start getting real, think about the form you want your business to take. You could go it your own way as a sole proprietor, or incorporate in some way. While you do not need to incorporate, you may want to consider it.
Incorporating (or forming an Limited Liability Company) has the obvious benefit of liability protection. For blogging that may not be much of a consideration, but for an ecommerce platform it may make some sense. For better or worse, having an '.inc' or 'llc' gives legitimacy to your site and your work. If you are working with a partner, you should strongly consider choosing either a corporation or LLC. Every state's laws differ on this subject, so do not take this as legal or tax advice, but starting a business with your friend or even your spouse and not putting down the ownership on paper, is a recipe for problems. If you want to know more about the benefits of each potential corporate form, ask a lawyer. Hey I know one of those:
Whether you incorporate or go the sole proprietor route, the next thing you should do is go get an Employer Identification Number (EIN) from the IRS. You do not have to be a corporation or LLC to get an EIN - just a business. The EIN allows you to open up bank accounts in your businesses name and gives your business a legitimate life to many people. If you are opening an ecommerce business, the EIN is going to be required by the state sales tax authority and by wholesalers. It is free and easy to get an EIN. You can do it online and it only takes a few minutes.
After settling on a form and obtaining an EIN, get your accounting started. There are so many great online accounting solutions for small businesses. I use Quickbooks Online for Birthday.Toys and Xero in combination with Clio for my law firm. Quicken is obviously the leader in the field, but did not offer the ability to track expenses at the client level - a necessary task for a law firm. Clio is a practice management solution that connects with Xero. Let's face it, if you starting service business, you will only get paid when you correctly invoice your customers. Find a solution that you like early on before you get too deep into your business. The sooner you start using a professional invoicing and accounting solution, the easier your life will be come tax time.
Get Legal, Get a LicenseAlthough it may feel like your local government has nothing to do with your online business, the truth is that if you are operating a business, you need a license. While opening a law firm with a downtown address may seem like an obvious candidate for a license, even your home-based business, like a blog or ecommerce site need a license. In New Orleans it is called an occupational license and even home-based businesses need one. Zoning is not usually an issue for a home based business unless you are wanting to hang a sign outside your house. Check your local government website.
Here in New Orleans, things move slower than other places. In New Orleans you still need to physically go to City Hall to get an occupational license (you can mercifully renew your license completely online). When I was opening up my businesses, I found the staff to be very helpful and polite but nevertheless I found myself questioning why they were a necessary piece of the puzzle. Hopefully your local government has streamlined itself and put the obtaining of a license online, but if you live in New Orleans, set aside half a day to get this legwork done. The fee you have to pay is based on the type of business and your annual sales. Allocate at least $50, as this is the minimum.
If you are setting up an ecommerce business, in addition to an occupational license, you will need to open up a sales tax account at both the state and local level. This step is another reason why obtaining that EIN should be one of your first steps. Some people mistakenly believe that if they sell online they do not have to pay sales taxes. The issue of state and local sales tax on internet transactions has been brewing for years. But the big player, Amazon, has recently given in and started collecting sales tax. If the fight seems unwinnable to Amazon, it is probably unwinnable for you too. Furthermore, what if someone in your state or in your town orders something from your website? Those transactions that happen completely within one state are already subject to sales tax. So at the very least, open up a state and local sales tax account and pay your taxes on those in-state sales.
To Host or Self-HostThe next step in the process of setting up an online business is to pick a domain and get hosted. Hopefully you thought about your domain early on when picking a name. There are many places that will reserve your domain, so just pick a favorite and move on. One thing to consider is that there is a 6-month hold on transferring new domains. So if you purchase your domain from one provider you are stuck with them for a few months. I made this mistake when I purchased my first domains. But do not despair! A workaround exists but you have to be a little savvy with some name server settings. Some quick Googling or customer support chat with your hosting company can solve that issue. If you want to know my work-around, comment below or send me an email.
By far the largest blogging platform is the open source WordPress.org operating system. But before creating your inaugural post, you need to decide if you are going to self-host or use a hosting company (like wordpress.com). First, some nomenclature: WordPress.org is the site responsible for designing and maintaining the opens source (free) blogging platform by the same name. If you self-host, you can install the WordPress.org operating system for free. WordPress.com is owned by the same company that built WordPress.org, but WordPress.com is a hosting company.
So what is the difference between self-hosting and using a hosting company? In both cases, your website is housed on a company's server. It is actually a bit misleading to say 'self-host' because we are not talking about you setting up a server in your basement. The primary difference is the level of customization. The hosted sites have set up a service that works for a broad swath of websites, but if you want something niche, you may need to self-host. The primary advantage hosting sites have over self-hosting sites is ease of setup.
The primary advantage to self-hosting is flexibility. There are hundreds of companies who design themes, plugins and add-ons to WordPress.org sites. If you are using a hosting company like wordpress.com, then you are limited to the themes and plugins that they approve and set up for WordPress.com. If you self-host you can install any theme, plugin or script. You can add a Facebook.com Pixel or Google Analytics Tracking codes.
If you are setting up an ecommerce site, you have additional options. You could skip the wordpress.org / .com site altogether and get a solution designed specifically for ecommerce, like Shopify.com or Wix.com. If you chose a WordPress.org self hosted site, you could use WooCommerce, the ecommerce solution offered by WordPress.org. Each of these sites has some basic level of functionality that should suit just about any business. They do differ in the user interface, payment gateways, and price.
Alternative Money FunnelsNow we come to the most important part of any business. How do we make money? Your website you should be attractive to your target audience. If you have read this far into my blog, you are clearly interested in starting an online business and are therefore in my target audience. Huzzah! But getting potential customers to your website is just the first step. Your website needs to reel them into paying for your services. Offer your visitors something for free. Give away a white paper or a how-to-guide. The freebie showcases your creativity and work and builds some good will with that potential customer. Plus, you can use the freebie as a way to build your email or newsletter list.
If you are a blogger, you will need to find your voice. But do not let perfect be the enemy of the good. Do not dither on a post. Get your thoughts down on paper, proofread and then let if fly. Content is king. Search engines love new content. Determine a schedule for your posts and stick to it.
Every blogger, after building their website, should sign up for an affiliate account with Amazon. The program is a great deal for content creatives. Basically, once you are an approved affiliate of Amazon, you can provide links from your site to Amazon products that may be relevant to your topic. The affiliate link places a tracking cookie on your visitor's computer or device. For the next 24 hours, if they make a purchase on Amazon - any purchase not just the product that you sent them to - then Amazon pays you a commission.
Even if you are an ecommerce site, like I run at www.Birthday.Toys, affiliate links can supplement your income. At Birthday.Toys, when we run out of our stock, our page is updated to provide an affiliate link to Amazon. It does not cost you anything to join the Amazon Affiliate program, and it can be a source of additional monetization for your site. There are fairly strict rules about the content you are allowed to deliver, so take the time to read through the operating agreement and rules prior to filling your site up with affiliate links.
If you are in retail sales of any kind, whether it be local business, ecommerce or some combination, you can not ignore Amazon.com. You should consider becoming a third-party seller on Amazon to help move your products. Until I started looking around for ways to increase my online sales, I did not realize that most of what you buy on Amazon is actually sold by third parties. According to Amazon, in 2016 there were 70,000 third party sellers who had sales exceed $100,000.
There are no quick and easy way to riches, but you should open up as many funnels as you can to maximize your income potential.
Become Your Own MadmanAll the great content, affiliate links, genius service ideas and inspirational product copy is useless unless people are finding your site. There are many different ways to drive traffic, but I will address the big ones.
First, do the free stuff. Go to google and bing webmaster tools and register your site with them. Submit a sitemap as well. Whatever hosting solution you chose should come with tools or plugins that allow you to verify your site with these search engines. Sign up for a business facebook page and instagram account. Link your site with these services so that when you post on your website, you automatically submit your content to these pages. Sign up for google adwords and bing ads. You do not have to create campaigns right away, but there is a bit of online click-work to get all of these accounts operational. Sign up for google analytics and get all the tracking code installed on your site. I am a fairly experienced online user and signing up for all of these services and getting them incorporated into my website, Birthday.Toys, took me a full day of clicking to accomplish. But it is worth it in the long run to just get it all done at once.
Once your business is set up on your favorite social media platforms, announce your business to all your family and friends. Whenever you post something on your business site, share it with your personal account to push it to a wider audience. This word of mouth advertising is completely free and can help get your audience to start snowballing.
At some point, set aside a day and start advertising. Both Google and Bing have account specialists that can set up your first campaigns. I used both services and they were both great. There are a million facebook advertising firms out there, so I will not duplicate what you have seen already, but you should strongly consider adding facebook advertising to your budget. Once you start buying Facebook ads, you will almost immediately see the power of Facebook's targeting. I do not mean your ads will suddenly jump to life and drive traffic. Instead I mean that your personal Facebook feed will fill up with advertisements for companies who claim to know 'the secret' to Facebook advertising. They used Facebook's targeting to find you! Speaking of budgets, set a monthly advertising budget and stick to it. Facebook tempts you to 'boost a post for $5', and it seems like nothing to just click on it. But it can be death by a thousand cuts. Your advertising budget can quickly get away from you if you boost every post.
Naturally if you are in a service business and your customers are in your same town, advertise locally as well. In addition to the local newspaper's website, consider more specialized advertising. For example, advertise in your town's 'mom's blog' to reach potential clients near you.
Hopefully by now you are well on your way to a successful web-based business. If you have any questions or would like to hear more about a particular aspect of my experience in creating several businesses, call or email me.