Business Startup Questions

[FallenShadow]

Now, I've done a bit of research already and I've read "Starting a Legal US Business 101" and "U.S. IRS Domain Business Tax Information" and I've got a couple questions for some more experienced people.

Without going into too much detail about the site itself, it will include a database of a certain type of business. Free advertisement for them. But I'll be offering premium advertisement to any and all who want even more exposure. After that, I'll be selling physical products, starting with say, Calendars, t-shirts and other products.

To do these things over the internet, what do I need to do first as far as legalities go?

Do I need to have a business license and tax ID? I know I will need to purchase an SSL certificate through my host, to handle payments and information securely.

As far as product goes, it will either be stored at my home or in a rental storage unit. Does anyone know if this requires a permit in the state of Oregon?

I know that with making it a business, I will need to keep track of what I spend on the business and what I make back from it, but if I do this myself I don't need an accountant or anything right?

If anyone can help with these questions, I would greatly appreciate it. I will be opening my website this year, in the coming months, and want to begin offering advertising services and selling products as soon as I can, after it's opening.

 

[iowadawg]

Best advice I can give you?
Get an accountant.
He/she can answer all your questions better than you will get here.

 

[Eric Lyon]

To do these things over the internet, what do I need to do first as far as legalities go?

As far as product goes, it will either be stored at my home or in a rental storage unit. Does anyone know if this requires a permit in the state of Oregon?

Each city / county in Oregon appears to have their own set of laws, so without knowing what city you are in I'll just grab a random popular city like Portland. At the following link you can see that Portland requires a permit to operate out of your home and has some restrictions: http://www.portlandonline.com/bds/index.cfm?c=36684

Do I need to have a business license and tax ID? I know I will need to purchase an SSL certificate through my host, to handle payments and information securely.

SSL certificate is handy to help protect your online customers, you'll definately want one to operate any legitimate online commerce. As a home business you may or may not be required to also apply for a license in addition to your permit, read more about licensing requirements here: http://www.portlandonline.com/licenses/

As for the IRS, you may get an EIN (employer identification number) free from the IRS here: http://www.irs.gov/Businesses/Small...n-Employer-Identification-Number-(EIN)-Online

I know that with making it a business, I will need to keep track of what I spend on the business and what I make back from it, but if I do this myself I don't need an accountant or anything right?

You aren't required by law to have a small home business accountant, however, it might make things easier for you if you did. Especially when it comes to finding deductions to save you money each quarter.

If anyone can help with these questions, I would greatly appreciate it. I will be opening my website this year, in the coming months, and want to begin offering advertising services and selling products as soon as I can, after it's opening.

Not sure if I was able to help much, but it should at least get you heading in the right direction for your research. naturally you'll want to check with your actual city laws & not the random city I picked since I didn't know what city you are in.

Eric Lyon

 

[nielsencl]

Ouch! While an accountant is not a bad idea, getting a couple books on starting a business might be a better initial investment.

If you are not going to incorporate then starting your own business is pretty simple.

Check with your state/city to see if you need a license, but I doubt that you do. A tax ID is only needed if you are going to buy things for your business and want to avoid paying any sales tax on what you buy(at the time you buy it). It is assumed that you are going to mark up the price and sell those items and when you do that is when the tax is collected from the buyer and later paid by you. You should verify this with a tax person.

No idea about what may be involved with running a business out of your home where you live, but here in Minnesota it's no big deal to have some inventory and store it in your home. If you have a large number of shipments going in and out it could become an issue.

If you incorporate you will need to keep the company money and your money separate. Even if you stay a sole proprietor I think it is a good idea to keep separate money accounts and credit cards for your business. If nothing else it will keep your records more organized.

Get some bookkeeping software like Quickbooks unless your business stays very small, then just use a notebook or a spreadsheet.

Do some networking with other local businesses. You can ask them questions and also make people aware of your business at the same time.

Lastly, I'm not sure from your message if you have experience at this. Just putting up a site is not going to generate instant income. You will need to consider marketing and promotion to build your business. The better job you do with that the more you will have to worry about taxes and other legal stuff. Good Luck!!!

P.S. I have had my own business since 1986 and went full time with it in 2003. I use Quickbooks, but only to track my hours and invoices. For expenses I purchases a corrugated receipt management system (My wife refers to it as a "shoebox" but that terms is hardly used anymore). Once a year I go through all my receipts and organize them by category, make a list of all my other expenses, and do a print out from QB of my income. Then I take it all to a tax guy and he looks for deductions and other stuff. The following year I deduct his fee from my taxes.

 

[enlytend]

See if there's a branch of SCORE somewhere near you - SCORE (www.score.org) is a nonprofit volunteer network of experienced and knowledgeable people who assist small businesses / startups / entrepreneurs and answer exactly the kind of questions you're asking.

 

[FallenShadow]

Thank you all for he advice and answers. I really appreciate it and all the links were extremely useful.

Eric: I live about 40 min from Portland but it's far enough that it's another county, but I may later move the shop/business to the Portland area so it's still helpful.

Again, thank you all. I've got a lot of reading to do and research, but now I know where to go with it.

And nielsencl, I don't have experience in the sense of having run a business before, I'm in my early 20s and this is my first. But I know about advertising, networking, SEO etc as I've been doing it for other people on a freelance basis. So thank you