Starting your own business can be a very lucrative investment, but it can also be very risky. There is no guarantee that you are going to be able to get the money back that you invest in the business. Rather than jumping head first into the debt that comes with opening a brick and mortar location, consider starting an online retail business. It’s important to take your time and make sure that you properly prepare if you want your business to be as profitable as it can be. Use the tips provided in the guide that follows to ensure you properly prepare for your online business venture.
Talk to an Attorney
Before you start a business, it’s best to talk to a business attorney so that you can learn the legal stipulations of starting a business. There are patent and copyright infringement laws, for example that can get you in serious trouble if you violate them. The attorney can help you determine that the name you use for your business isn’t copyrighted and also what paperwork you need to file in order for your business to be recognizedin the eyes of the government.
Don’t try to fill out the paperwork on your own, as there is a chance that you maydo it improperly or overlook something. There are many small companies that make the mistake of trying to save money bydoing things themselves, only to have to pay numerous fines later for violating laws they didn’t know when they started the business.
Determine Your Website Design
Next, you need to determine how much it will cost to start the business. Be sure that you hire a professional to set up the website for you so that you can rest assured it works properly once it’s launched. It’s also a good idea to be sure the company you hire provides you with ongoing technical support in case anything goes wrong with the website in the future.
When you talk to a website developer, he or she should be able to give you an estimate for what it will cost to create and maintain the website. Keep the costs within your budget so you can rest assured that you can afford themin the early stages of opening.
Hire an Accountant
You are required to pay taxes on your business when you start it. Planning ahead when it comes to paying the taxes ensures that you don’t have to borrow money or use your savings when it’s time to pay taxes. Talk to an accountant to learn more about filing taxes for your small business. He or she should be able to guide you through paying quarterly taxes so that you don’t have to pay a large sum at tax time each year. Filing taxes quarterly also allows you to have accounting issues discovered as quickly as possible, especially if you have other people working for your business. There are times when people steal money from businesses and aren’t caught until an accountant starts looking through the company’s books and notices discrepancies.
Keep Accurate Books
Owning a business requires you to be very detail oriented. Keep track of every bill you pay, every dime you spend and all of the money that your company brings in and pays out every day. You need to be able to provide your accountant with detailed books so that they can properly file your taxes for you. If you don’t maintainaccurate bookkeeping, something could be overlooked and the IRS mayend up auditing your business in the future. An accountant can use these books to determine approximatelyhow much the taxes will be for each quarter so that you can start setting money aside for the tax payment immediately.
Keep Minimal Inventory on Hand
Some small businesses make the mistake of ordering inventory for their business in mass quantities. It allows them to pay less for the overall cost of the items, but then requiresthat they store the items, which could cause them to perish before they are sold. It’s best to order enough inventory to fulfill estimated sales for two months. If you notice that something is selling quickly, you can order more as soon as your inventory starts to dwindle. This also keeps you from losing a lot of money when you buy something that turns out to be harder to sell than you anticipated.
Reduce Shipping Costs
Take the time to research shipping options, especially if you have items that you need to ship on a regular basis. Be sure to specify the weight of the items you’ll ship so that the estimates you receive for shipping are as accurate as possible.There are some shipping companies that incentivizeyou to sign a contract with them bydiscounting the amount you pay in shipping costs if you guarantee apredeterminednumber of shipments each month. Cutting down on your shipping costs will increase your overall profit.
Proper planning is essential when you open an online retail store. If the business doesn’t have the success you envisioned, it will cost far less to shut down the business than it would if you had a brick and mortar store. There is less risk involved with an online retail space and is often easy enough to handle that you can do it as a side business, rather than as your main source of income. If the business takes off, you can then decide if you want to keep pursuing your passion of small business ownership or keep it as a side job that you do in your free time to earn a few extra bucks for your family.