Starting a business is a big deal.
One could say it’s…serious business (worst dad joke ever).
Having the right mindset, along with the right tools in your virtual toolbelt, will help you make the strategic decisions you need to succeed.
In this article, we’ll be covering the importance of getting into the business mindset, how to register an LLC, how to deal with taxes for your business, and several more important things needed to build a successful online business.
Get into the Business Mindset
The right mindset will help you make the dominate at your craft, whether it be web design, affiliate marketing, eCommerce, or something else entirely.
No matter how much you love the work, remember that it’s work and treat it accordingly.
If you put in the time and effort you can absolutely build a successful web design business.
Fortunately, even if you’ve never started a business before, you can build a business mindset by paying attention to these five core principles.
1. Treat Your Business Like a Job, Not a Hobby
Hobbies are fantastic!
They keep you learning new things, engaging in fun activities, and enjoying yourself.
But if you want to turn a passion into a business, you can’t treat it like a hobby anymore.
You can take a break from a hobby, set it aside if you’re not feeling excited about it – but your business is a job.
It can’t be picked up and put down at will if you want it to do well.
Give your business the time and commitment it needs to succeed.
2. Keep Track of Everything
It’s important to keep track of everything related to your business.
Keeping thorough records will help you out during tax season, of course, but they’ll also be invaluable as you continue to build your business.
You don’t want to end up making important business decisions based on what you vaguely remember doing.
Keep track of all your expenses, clients, rates, and everything else as you start and build your business.
This habit will help you stay in that business mindset.
3. Cash is Your Life Source
They say cash is king, and that holds true when it comes to your business.
Cash flow is vital for new small businesses.
Assets and profits aren’t as important as having a cash flow when you’re first starting out.
You probably don’t have deep pockets to continue funding your business, so pay attention to your cash flow to make sure that you’ll be able to stay up and running.
4. It Won’t Always Be Fun
Like any job, there are always hard times and bad days.
Be prepared to work through them so you can keep your business running.
There may be certain tasks like record keeping that you don’t enjoy as much as the work itself, but they are vital to maintaining your business.
Focus on your long-term goals to get through those tough times, and you’ll be able to keep going.
5. You Will Not Get Rich Quick
The words “get rich quick” are often accompanied by “scheme” and schemes have a way of becoming disasters.
Starting a business isn’t an easy path to riches.
It can be very rewarding but it’s also a lot of work.
Be prepared to see only modest profits and put that money back into your business.
Remember, you’re building for the long term, and you need the right mindset to keep going when the going gets tough.
Sole Proprietorship vs. LLC
If you’re serious about building your online business the right way, you may want to consider creating an LLC, or a Limited Liability Company.
If you don’t, you’ll be running your business as a sole proprietorship, which means that there is no separation between yourself and your business.
A sole proprietorship simplifies taxes because you’re simply filing as yourself.
But if anything goes wrong, your personal assets aren’t considered separate from your business assets.
An LLC shelters your personal assets from legal action, and if you’re the only member of the LLC you’ll still just file an individual tax return.
You will need to file a certificate of formation in order to create an LLC, but this process is fairly simple.
If you plan on expanding your business significantly you’ll definitely want to establish a Limited Liability Company to protect yourself and set yourself up for growth.
How to Register an LLC
There are websites that will help you through the steps of registering an LLC, making the process simple and straightforward.
Let’s take a look at the steps you’ll need to take in order to register an LLC online.
To register my LLC, I used MyCorporation.
First, you’ll need to indicate the state you’re filing in and choose one of their packages, as well as any extras you’ll need.
For more information about all of these services, you can contact their support team and they’ll help you decide what you need and walk you through the process.
Personally, I went with their cheapest plan just file annually through my state’s government website.
I’ve had zero problems since filing it back in 2016 so I would just go with the cheaper plan if you just want to a file a basic LLC.
Obviously, I’m not a legal expert so make sure you feel comfortable before proceeding with anything.
Once you’ve provided all the necessary information and paid the filing fees, they will file all the appropriate paperwork with the state on your behalf and send you all the documents you’ll need, including your articles of incorporation and business documents.
You’ll need these for opening a business bank account and for tax purposes.
Registering a Virtual Address for Your LLC
If you’ve decided to register an LLC for your online business, you’ll want a separate address as well so that you don’t have to use your home address for your business.
A virtual address is a street address that you can use for your business so that you don’t have to use your home address.
Keep in mind that PO boxes aren’t accepted for an LLC.
You can use a service like iPostal1 to obtain a virtual address to use for your business address.
You’ll be able to have mail and packages shipped to this address, and can pick up your mail at the mailbox location or have it forwarded to you.
UPS stores also provide a mailbox service that will give you a physical address.
Once you’ve set up your business address and registered your business as an LLC, you’ll want to set up some additional infrastructure in order to keep your business expenses separate from your personal assets: a bank account, credit card, and PayPal account will help you keep track of your business finances.
Register a Business Bank Account
Since you’ve created an LLC in order to keep your business and personal assets legally separate, you’ll need a business bank account in order to actually keep those assets separate.
You’ll need the business information that you received after setting up your LLC.
Banks vary in exactly what they need, so contact your local bank and ask them what you’ll need to bring in when you open your account.
Register a Business Credit Card
While you’ll want to operate with cash as much as possible, it’s a good idea to have a business credit card as well so that you can be prepared for potential unexpected expenses.
While the bank that you have a business account with can help you out with credit as well, you can also use a website like Credit Karma or CreditCards.com to find a business card that fits your needs.
Pay attention to interest rates and annual fees, and look for any perks that will be relevant for your business.
Set Up Your Business PayPal Account
Finally, you’ll want a PayPal account for your business as well.
PayPal is the preferred payment method for many people, and they have a variety of invoicing tools that make it easy to bill clients and get paid promptly.
It makes it easy for clients to use their own PayPal accounts or a credit card to pay you, and you’ll be able to have funds directly deposited into your bank account from your PayPal account.
Set Up Your Google My Business Page
In addition to your financial tools, you’ll want to set up a Google My Business page as well.
This is a free product from Google that makes it easy for potential customers to find you when they search for businesses like yours.
You can set up a profile and update it regularly so that your business information is easy for people to find and read.
You’ll be able to post images, creating a virtual portfolio of your work.
It also allows customers to leave reviews, and you’ll be able to respond thus building engagement and loyalty.
Keeping Track of Your Expenses and Income
Accounting may be the least exciting part of your new business, but it’s a vital part of building a successful enterprise.
While accounting is necessary, it doesn’t have to be difficult and complicated.
Freshbooks is designed for small businesses, so it has all the features you’ll need to keep track of your time, expenses, and income.
You can also use a simple spreadsheet to track your expenses and income.
Google Sheets is accessible online so you can use it from any computer or smartphone.
This spreadsheet is what I use to keep track of my expenses, and you can also use this simple template for your business.
Taxes and Your Business
Business taxes are an intimidating thought for many people, but just like accounting, taxes don’t need to be difficult.
You’ll be filing a Schedule C, which is used to report any taxable profit in your business.
It’s a fairly simple form, and it includes line-by-line instructions.
It has a section for earnings and a section for expenses.
The expenses section is where you’ll list everything that can be deducted, which is why it’s so important to keep track of everything.
There are many things that can be deducted as business expenses, including bank and accounting fees, office supplies, travel, utilities, and more.
There are lots of sources that can help you figure out what you’ll be able to deduct, so do your research before you do your taxes and you shouldn’t have any problems.
Tax software generally will give you more information about the income and expense categories.
A little disclaimer here: I’m obviously not a tax professional.
If you’re unsure about anything, it may be worth utilizing the services of a professional for the first year of your business.
This way, they’ll be able to help you learn about how your business taxes work and get you the best results possible.
Start Your Online Business the Right Way
No matter what sort of online business you’re wanting to start for yourself, you won’t succeed unless you lay the proper foundation for yourself and get all of your logistics in order.
Keep taking action, and never give up!