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Steps To Starting an Online Business

September 04, 2017
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Whether you are expanding your existing business into ecommerce or starting a new online business, it's important to get off on the right foot. From understanding local laws and regulations to privacy and terms of service agreements, your LegalShield provider law firm can walk you through how to start an online business.

Covering the legal aspects of your online store is just as important as a business plan and market research.

Business owners are typically concerned with their business model and profitability during the startup phase of their business. However, filing the correct legal documents upfront, before you start selling, can save you time and money later.

If you are forming a new business, Launch by LegalShield can help you form an LLC, Corporation or register a ‘doing business as’ or DBA.

Online Business Ideas

You can start nearly any type of business online. You can create an ecommerce store to sell your own products or just the storefront for drop shipments. You can make money online by blogging or selling online courses.

If you don't want to create anything, you can get into affiliate marketing as a side hustle. This may only involve only sending referral traffic to other companies.

Other ideas for starting an online business include: podcasting, consulting, coaching, creating templates for your target market to copy, selling products on Etsy, or becoming a social media influencer.

If you have expertise in a particular subject like photography, search engine optimization (SEO), graphic design, email or social media marketing, you can become a freelancer. Putting your know-how to use on sites like Fiverr and Upwork can be a quick way to start your own business.

Steps To Start an Online Business

The following tips cover some of the basic steps you'll need to take before starting your online business.

  1. Local Laws and Regulations – Just because your business operates online doesn't mean it's free of state and local business regulations, or in some cases federal laws. You must follow any applicable employment, business registration and licensing regulations. If you are unsure of which laws apply to your business, contact your LegalShield provider law firm.
     
  2. Domain Name – Registering a domain name for your website is an important first step. It's important to remember that your domain name doesn't have to be the same as your business name and is not the same as securing a trademark. Do not be discouraged if your first choice is not available. Some of the most successful online businesses like Google and Amazon have have names that do not have a literal connection to their business. Think of Google and Amazon. The most important factor for your domain name is that it be simple and easy to remember. Domain names can be registered for a specific period of time or in other words, you  cannot buy a domain name outright. Registration periods typically range from one to three years; the maximum term is 10 years. Once you register your domain it's important to set up automatic renewal and alerts to an email box you regularly check. If you forget to renew your name after your term expires someone else can take and register the domain. In a best-case scenario, you would have to pay them to get it back; worst case, you lose the name.
     
  3. Hosting – You do not have to host your site with the same company you use to register your domain, but many domain registration companies do offer hosting. There are a wide range of options for website hosting. Some platforms, like Wordpress, provide an easy-to-use interface for web design and management. Platforms like Shopify even integrate a shopping cart, checkout, and payment portal system. Shop around to find the best service to meet the needs of your business.
     
  4. Protect Customer Data – One of the most important considerations is the security and privacy of customer payment information. Often the best solution for small businesses is to use a vendor who will handle your transactions and forward payments to your designated bank account. There are a wide range of options for online payment services but regardless the site should include a specific privacy policy and your LegalShield provider firm can assist with the wording.
     
  5. Payment Processing – Many businesses, both online and brick-and-mortar, utilize online payment portals to process customer payments. These services integrate with your website so customers can pay with credit and debit cards. Setting up an online payment portal is typically easier and less expensive than establishing a traditional merchant account. Many vendors charge a flat fee per transaction plus a percentage of each payment processed, and some may charge an initial setup fee for establishing a new account. Check as credit cards may have a variety of per transaction fees. Make sure you understand the complete range of fees before selecting a vendor.
     
  6. Sales Tax – If you make a sale in a state where your business has a physical presence, such as a store, office or warehouse, you may be responsible for collecting sales tax. Not every state requires sales tax and some states only collect taxes on certain items. It's important to make sure you follow the proper tax guidelines in any state where your business has a physical presence. Some online payment vendors automatically calculate and collect tax from purchases. If you need additional information, contact your state taxing authority or your LegalShield provider law firm.
     
  7. Terms of Service – You will likely deal with a wide range of vendors in setting up and managing your online business. It is important that you carefully review all service agreements and contracts before you sign or agree to them. These documents are typically long and difficult to read. Your LegalShield provider law firm can assist in your review of both.
     
  8. Advertising – Online advertising carries the same rules and regulations that govern storefront businesses. The most important rule is that all of your advertising must be truthful and cannot mislead consumers. If you make a specific claim about a product or service, you must be able to verify the accuracy of your claim. Even if you hire an online marketing company to work on your behalf, you are the one who is ultimately responsible for reviewing your business’s advertising. The Federal Trade Commission has detailed information about online advertising on their website and of course your provider lawyer can help.
     
  9. Customer Relations – The internet allows your products to travel further into the marketplace, but it also amplifies the voice of unhappy customers. Online businesses suffer greatly from poor online reviews, which can send potential customers running. Closely monitor your reputation. There are online tools such as Google Alerts and Social Mention that allow you to follow reviews and social media content regarding your business. Reading both positive and negative reviews will help you improve your business and refine your customer service.

Get the legal help you need to start your new online business.

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