How to create an online store
“Nothing is more powerful than an idea whose time has come.
” Victor Hugo wrote that, and its message inspires me daily. Now it’s your turn to take that dream of yours and turn it into a viable business. LEGAL STRUCTURE Your new venture will need to be set up as a legal structure.Your business will be created under one of these basic forms:
a sole proprietorship, a partnership, or a corporation. Please consider carefully your needs and financial backing before you select the structure you want to register your company with. Most home-based businesses are sole proprietorships, but partnerships are not unheard of; full-out corporations are a little rarer.
Your structural decision will impact many areas of your business, including how your taxes are filed. Partnerships and corporations will require contracts and legal fees, negotiations between the parties, and a division of responsibility.
1- There are numerous
Web sites and books with information on starting a business and on which structure will work for your particular setup. By typing the keywords “small business” in your Web browser, you will find numerous sites to help you make this vital decision.
One Web site that many of my friends have used is Nolo Press, at www.nolopress.com. Download Choosing a Structure for Your Small Business.There is a $10 charge, which buys you a wealth of information.
2- The Small Business Start-up Guide by
Robert Sullivan is an excellent book for newbies in the work force. One of the many popular “Idiot” series books is The Complete Idiot’s Guide to Starting Your Own Business by Ed Paulson, which I highly recommend. Let’s take a look at these three structural choices: sole proprietor, partnership, or corporation.
3- SOLE PROPRIETOR
Most small businesses choose this form in part because it is the easiest and least expensive. It’s a good way to get your feet wet and grow your company before you decide to take on a partner or fly your flag under a corporate logo.
You are the only owner, and from a legal viewpoint and tax perspective there is no differentiation between you and the business. You will make all the decisions, bank all the profits, and accept all the congratulations.
4- On the flip side, you will incur all
The debt, handle disgruntled customers, and dodge the “I-told-you-so’s” if and when your venture fails. All your personal assets are on the line if the business fails, and creditors can attack your home, car, and large investments if it goes to court.
If you used your home as collateral for a business loan, it’s on the line. As a sole proprietor, you may hire employees to work for you, which could involve taking on workman’s compensation and unemployment insurance.
5- You may need to provide vehicle coverage
For employees as well if they are using their car for business purposes, such as deliveries, pickup, etc. I have always been a sole proprietor and have never had any problems.
Yes, health insurance is expensive when you are flying solo, and you will need to get permits and licenses, but these are trivial compared to the regulations that exist for forming a partnership or corporation.
6- I wanted the autonomy of being my own
Boss and setting things up the way I want them. I like having things orderly, and actually enjoyed the process of setting up my own shop and knowing I had crossed all the ts and dotted all the is. I’ve outsourced work to other freelance artists before and found myself frustrated.
Suddenly, the control I had over my business and what happened in “my name” was gone; the results were now in someone else’s hands. Many times, I received calls from a dissatisfied client, and I would have to make things right and take time away from my projects to correct the problem.
7- What started out as a means to relieve myself
From some of the pressure turned out to be more work. The times that I’ve worked with another artist, however, did have their plus sides.There was someone to talk to, joke with, brainstorm with, and
share expenses and workload with. But in the long run, I knew it would take a toll, as I have a certain way of doing things. Often you will find when working with someone else that your timetables don’t match.
8- You may be someone who rises
With the rooster and your partner may rise with the noon school bell. You’re organized—she prefers the “lived-in” look. You dress for meetings, while her attire can only be described as “casually ruffled.” Of course, as a sole proprietor, you can
Have employees, but at least in the beginning, you’ll probably run the whole show yourself—until you get a firm grip on the ropes involved in running a new business. As a sole owner, you will answer the phones,
9- File the invoices, pay the bills, handle the
Advertising and complaints, haggle over back orders of merchandise, attend business meetings alone, negotiate insurance, and smile for the customer. You can also take a break when you feel like it, not when someone else is ready.
You decide your work hours and how your business will be run, along with what customer service policy you believe is effective. Negotiation hassles are nonexistent, and there isn’t that uncomfortable feeling that you are doing more work than your partner.
10- To be honest, the biggest perk
Of working alone is the peace of mind it brings me over the fact that there is nothing “out there” not being taken care of.You can delegate responsibilities to someone else, but you always have to follow up (or you should).
When my to-do list is checked off at the end of the day, I feel relaxed knowing things are in control and there are no loose ends dangling. But, that’s my personality.You may be different and require a partner to hold the template while you fill in the lines
Just because a friend shares your enthusiasm for scrapbooking does not necessarily make her a good business partner choice. There are extremely important considerations when deciding who will share responsibility in your profit-producing enterprise. The most important consideration is financial. If you have a partner, you and she will share the financial burden of the business.You will both
If you’ve found the perfect partner and you are both scribbling names for the new business on napkins and leftover paper borders, then great. Now, sit down and ask the tough questions:
What do both of you see as your mission statement? What goals do you have for the business?
Who will invest what?
Which responsibilities will each of you have? Write them down. Purchasing? Bookkeeping? Marketing?
Will one of you be the primary decision-maker, or will everything require a “huddle”?
How and when will profits be divided?
How will you buy each other out in the future?
How will vacation time be divided up? Who works what hours?