Reading Time: 4 minutes Considerations To Set Up Your Online Side-Hustle for Success
Whether you’re looking to create an eCommerce business to become your primary income or simply looking for a side hustle as a way to make some additional money. Either way the reality is that there’s never been a better time to create a start-up online. But the risks still exits of of losing money if you don’t know what to do.
In fact, starting up an eCommerce business is much simpler than many people might think, but it can also underperform when set up incorrectly. This post will guide you to effectively set up your side hustle or online business to allow you the best opportunity to make some money online, as well as help you learn how to scale it as needed.
Establish A Legal Entity
Choosing a legal entity for tax purposes and liability protection is crucial. Starting a business without designating the type of legal entity you’re going to operate is similar to walking outside in a blizzard. You’ll be fine for a short period of time, but overexposure can be severe.
Picking from sole proprietorships, partnerships, S-Corps, and LLCs will help you shield personal assets and establish your tax responsibilities. These types of legal entities should help you come tax time and also add layers of protection from potential liability if there’s a problem in your business.
Secure Your Employer ID
After you decide the type of legal entity you’ll be operating your business from, the next step is to apply for an EIN or employer identification number to help differentiate personal and business finances.
Research, Research, Research
Next do a deep dive of research into what type of niche to operate in and the products you wish to sell. Some areas of eCommerce are more competitive than others, so researching what holes may exist that you can fill and find profitable.
Choose A Hosting Platform
Deciding on a platform to host your business and make sales is the fourth thing you need to consider. Some sites are better equipped for different types of products than others. For example, selling personal services on Amazon isn’t as good an idea as creating your website and marketing your services there.
However, if you are looking to sell physical products, Amazon is the world’s largest platform, and it may be a great place to start. If you do decide to sell on Amazon, though, you need to consider the various laws and regulations that may be different in other countries. That’s where hiring a service such as an importer of record is crucial to protect your assets in other countries.
Build A Supply Chain
Sourcing and supplying your customers is the next phase of establishing your eCommerce business. The last thing you want to do is find a niche and product, only to discover that you can acquire the products in time to sell, or they are priced too high to make a decent profit margin.
Finding a distributor, wholesaler, or manufacturer that you can work with at an established price will help you price and analyze your cost-point to make a profit.
Get Creative With Marketing
Marketing your business, products, and services is one of the final steps to start your online business. Without good marketing, getting leads and sales won’t happen. This isn’t like the “Field of Dreams,” a movie where you build it, and people will come.
Instead, marketing is necessary to help get your name out there. You will need to have an intelligent marketing campaign, for starters. Furthermore, you can find potential customers by learning where they hang out, shop, and search for products and services similar to the ones you’re offering.
Stay On Top Of Logistics
Now that your business is up and running, making that sale and getting your products to your customers is the final phase of your online business. No business can survive with promises to deliver and have a poor follow-up, so organizing how you’re going to provide your customers with the sold products is the final, yet in some ways most important, phase of your online business.
In Conclusion
It is taking a strategy that includes organizing your business from the outset by choosing the legal entity that makes the most sense for you and how you plan to find and fulfill orders is the foundation for success.
Operating a successful business is more than just having an idea. It’s putting in the systems and strategies you can build from and scale to grow that should be as important as the idea itself.
Greg is a Chartered Financial Analyst (CFA) with 22+ years experience in Financial Services. He has held numerous FINRA Securities licenses (series 7, 63, 65, and 66), and is an expert on Investment Products and Financial Planning. Greg has 22+ years experience as a real estate investor and degrees in Psychology and Philosophy.
Greg has been quoted/interviewed in Yahoo Money, Yahoo Finance, USA Today, Authority Magazine, Realtor.com, Business Insider, and others.
Greg is an avid runner, and the father to identical twin girls and their awesome brother. His love of budgeting and his kids led him to join The Great Resignation in 2021.
Disclaimer: Any Financial Tips on ChaChingQueen are general and informational. Speak with a professional about your specific situation.