What is a business entity?
One or more natural persons create a business entity to carry on a trade or business. Business owners often favor corporations and LLCs because they offer several layers of protection for their owners.
The following are types of business entities:
- Limited liability company: A registered business with limited liability for all members
- Professional limited liability company: An LLC structure for professionals, such as doctors and accountants
- C-corporation: An incorporated business composed of shareholders, directors, and officers
- S-corporation: An incorporated business that is taxed as a pass-through entity
- Professional Corporation: A corporate structure for professionals, such as doctors and accountants
- B-corporation: A for-profit corporation that is certified for meeting social and environmental standards
- Nonprofit: Corporations: A formed primarily to benefit the public interest rather than earn a profit.
It Is Never Too Early To Plan For Taxes
It is true that 2020 was a year that had a lot of personal challenges for small businesses. However, understanding your tax liability for the coming year is always a good idea and it is never too early to start. There is no reason that taxes need to be a mystery and you can forecast what you will owe in the coming year.
Net Profit
Do you properly understand how to handle your cash flow? Are you going to pay taxes purely based on
What is available in your checking account? Many business owners do not realize that their available cash is not the same as the company’s net profit.
Remember The Quarterlies
Since self-employed owners do not get taxes withheld from their paychecks, it is a good idea to withhold the correct amount and send the Internal Revenue Service quarterly payments. This is particularly important if your tax liability is over $1.000. Ignoring quarterly payments could result in costly interest payments or penalties.
Decide what state you want to form your business.
Most new online business retailers file their documents within the state that they are physically located. This helps avoid the cost of hiring an out-of-state registered agent in your home state. However, if your business is large in scope, you might want to file your documents in Delaware. This state has advantages like laws that are generally favorable to businesses, and, unlike other states, it has a separate Court of Chancery that hears cases involving corporate law. It also does not collect corporate taxes if your Delaware Corporation actually does business in another state.
Build your inventory and make sure you get barcodes for all of your products.
To legally sell products to consumers through an online store, you will need UPC bar codes for each item you are selling, with separate barcodes for different patterns, styles, and combinations of features. You can purchase barcodes easily online.
Make sure you have a decent-sized inventory to handle the demand. The online customer expects their orders to come through quickly.
Set up your Domain and design a great website.
Your domain name is your internet address. You want your domain name to be memorable and interesting. Many companies offer domain name registration. Set up an account, and then you identify the name of your domain. There is usually an annual fee.
You also want to design a pleasing website that offers customers a pleasing and simple-to-use interface. This includes setting up the theme, headers, and product lines. You will also need to organize your products into categories and decide whether you want to include sections such as a FAQ page or a blog. Do not forget important factors like a shopping cart and easy-to-play options. This should not be difficult if you are using a typical e-commerce platform. You also want to constantly update and check your website to ensure there is no technical issue that could interfere with your sales.
Set up your Domain and design a great website.
Your domain name is your internet address. You want your domain name to be memorable and interesting. Many companies offer domain name registration. Set up an account and then you identify the name of your domain. There is usually an annual fee
You also want to design a pleasing website that offers customers a pleasing and simple to use interface. This includes setting up the theme, headers, and product lines. You will also need to organize your products into categories, and decide whether you want to include sections such as a FAQ page or blog. Do not forget important factors like a shopping cart and easy to pay options. This should not be difficult if you are using a typical e-commerce platform. You also want to make sure to constantly update and check your website to make sure there is no technical issue that could interfere with your sales.
Remember to get a Tax Resale Certificate.
As a savvy online business retailer, it is important that you are aware of how to utilize tax resale certificates to your best advantage. In short, a retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell such as wood for a cabinet. This is a significant saving and can save your business a ton of money if utilized properly. Our article Everything You Need to Know About Tax Resale Certificates will give you an in-depth rundown about how these types of certificates can help your business.
Unfortunately, the rules of Tax Resale Certificates can vary greatly by the state which can be very confusing. Our site makes the process as easy as possible. Just take advantage of these user-friendly options to help take the headache of applying for a tax resale certificate off your plate.
Launching and Marketing
Once you have worked out all the operational and technical bugs it is time to launch your new online retail business. Make sure that you market to your customers on multi-levels including taking advantage of many types of social media. You should also be aware of search engine optimization to make sure that your customers can find you easily. It is a good idea to maintain an ongoing flow of content on the site to both attract and engage your core market.
You have now entered the lucrative world of online retail. Your careful planning has put you ahead of the game in regards to your competitors. Just remember that business is dynamic and you must always be proactive in improving your products and servic