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Every Successful Online Business Starts With a Business Plan

The way to make a living online is to treat your business as a real business Don’t think of it as a hobby that might eventually make a profit. Focus on it and treat it like the business that it is intended to be.

Too often people only think of the NOW when trying to make money online, instead of planning for the future. All they can see or understand is that they must make their mortgage payment NOW, or they must pay that car loan NOW, or they must have that HD television NOW. They don’t think about planning for a recurring income to sustain their future.

Taking into consideration that an online business should be for the duration and not be looked upon as a passing phase, then a business plan must be created to see the direction that will carry it to long term. When an Internet business owner hasn’t planned for the future of their business more than likely that business will fail. The reason that 90% of businesses in America fail every year is because of neglecting to create a business plan.

All to often, new Internet marketers don’t have a clue as to what a business plan is. They don’t understand why they need to have one, or how to write a business plan. People that want to make money NOW are failing to realize that it takes time to build an online business They have been sold a pipe dream – that they can make a fortune instantly, which just is not the case. A successful business whether online or off line, needs to be built and nurtured over time as it will not happen immediately. There is no such thing as an overnight or instant success, no matter what they may have been led to believe. A business needs a chance to blossom and grow. Without having a business plan to follow, the business is on very shaking ground and is doomed to fail.

Do you have a Hobby or a Business?

Many people are confused about the difference between the two.

When someone has a hobby, it is either something that they love to do, or it is something to keep them busy. Most hobbyist also hope, in the back of their minds, that eventually they may be able to make a little extra spending money from their hobby.

The only objective for operating an online business is to make a profit from the sales of goods or services and that’s it. Before sales can be made an online presence must be established first in order to make money selling those goods or services

Before getting started in any business online or off, it is a necessity to have a business plan in order to set the direction that the business will follow. Having a plan will not only guide the business direction but will also help the business owner to realize how they will reach their destination.

Goals will need to be set, which will help the Internet marketer keep focused while they strive to reach the goals. Once a goal has been reached successfully, they can then move onto the next goal and so on until the ultimate goal has been reached.

Statistics have proven that a business that follows a business plan will not only succeed, but will see a higher profit than a business operating without a plan. Statistics state that an online business will increase their profit margins by 55% by following a plan, while a business operating without a plan will only see up to 34% profits, if they stay in business at all.

When marketing on the Internet, drive, determination and perseverance are a necessity once a business plan has been created. The drive is to take action and implement the plan; the determination is to see it through; and the perseverance is to keep at it, even when the marketer doesn’t feel like it.

Once the business plan has been created, stuffing it into the desk drawer or storing it on the computer hard drive is not going to get it done. Create the business plan, implement it, achieve the short term goals and strive for the long term goals. Only then can one have a successful online business.

Benefits of Financing Your Business Equipment

The advantages of financing are greater than ever. Any business or organization can benefit from these advantages which include reduced costs, simplified budgeting, credit preservation and flexibility. When it is time for your business to make a financing decision, equipment financing allows you to take full advantage of business opportunities while enjoying critical flexibility and investment protection.

More for Your Money

Many businesses struggle with the need to grow while feeling constrained by a lack of capital. What so many business owners don’t know is that equipment financing can increase your buying power and decrease your expenses. When you finance rather than use working capital, you can afford a more complete solution while making lower monthly payments and paying little or no up-front costs. This leaves your working capital intact while allowing for the needed growth.

The larger the business acquisition, the greater the benefits of financing. For large-scale projects financing can mean the difference between making those changes now and putting them off indefinitely. Putting off necessary changes often means taking your business out of a competitive market position – a position that can be difficult to regain.

Critical Business Advantage

As the business landscape changes on a daily basis, it can be imperative for your own business to adapt and grow to match the market. This is especially true for software and services that are vital but can have large up-front costs. Unfortunately, there are many companies that lack – or think that they lack – the resources required to purchase all of the equipment needed to keep their businesses productive.

Financing can expedite this business transformation by letting you add necessary service capacity, reduce the risk of your technology becoming obsolete and can decrease the total cost of ownership. Equipment financing can provide flexible payment options tailored to your specific budget requirements or timed to match your benefit streams, enabling your company to afford all of the components necessary to maintain a competitive business edge.

Speeding Up Your Business

Other obstacles to keeping businesses moving ahead at an effective pace can include budget constraints and the lack of capital. But emerging markets and those ever present competitors won’t wait for you to catch up. Financing those business purchases means that a lack of capital doesn’t have to cripple your business endeavors.

Equipment financing enables companies to quickly adapt to changing competitive environments, and any business strategy should include access to flexible and competitive financing options. Take some time to research equipment financing companies. The good financing programs offer customers competitive, flexible financing solutions for acquiring hardware, software and any other equipment that your business might need.

Competitive Advantage

It is a simple fact that business solutions are becoming obsolete faster than ever. A customer-focused equipment financing program provides flexible, cost-effective solutions that can help you acquire the technological components that you need to migrate to new business models and to maintain your competitive edge including software applications. This benefit can help ensure that your business never faces the specter of business obsolescence.

You should consider taking advantage of the flexibility that financing offers if your business is in the market for new equipment. This flexibility can help you stay ahead of the technology curve, and ahead of the competition.

A Hedge Against Inflation

With an economy that may seem less than stable, it is important that businesses, especially newer businesses, take advantage of every opportunity that gives them protection against tough economic times. Postponing growth is not necessarily the best way to protect your business as it can result in a loss of customers if you can’t offer them the services that they need or want.

When growth becomes a necessity, equipment financing can allow you to grow the way that you need without making your financial base less stable. The right equipment financing program not only gives you the access to capital that you need for growth but it could also lock in the rates for the loan. This means that you won’t have to worry about your rates falling victim to inflation… ever!

Don’t Fear Financing

The business world can be cutthroat. That’s no secret. So in the quest to keep your own business competitive or to grab a bigger share of the market, don’t let the lack of capital inhibit your plans. It would be nice if we could all expand using only the capital at hand, but that is simply not realistic. Equipment financing can be a very valuable tool and one that offers many benefits. It should not be feared. There are plenty of financing programs available that offer flexible and tailored terms to fit your needs. Do your homework and you will find a lender that will work with you rather than against you. In the long run, that financing could be the most valuable weapon in your business arsenal.

How to Start a Home Based Business Or Small Business

Evaluate a Start Up

Before starting a company the Small Business Administration, SBA, recommends that potential entrepreneurs make a list of reasons for wanting to go into business. Some of the most common reasons for starting a business are: to be your own boss; financial independence; creative freedom; and to fully use your skills and knowledge. In addition, the SBA suggests entrepreneurs answer the following questions:

(1) What type of business am I interested in starting?
(2) What services or products will I sell?
(3) Where will I be located?
(4) What skills and experience do I bring to the business?
(5) What will be my legal structure?
(6) What will I name my business?
(7) What equipment or supplies will I need?
(8) What insurance coverage will be needed?
(9) What financing will I need?
(10) What are my resources?
(11) What will I compensate myself?

Select A Business Structure

The success or failure of a new company can depend on a variety of factors including, the manner in which a business is formed, managed and promoted. Although there are different opinions as to the process involved with starting a company, entrepreneur advisors agree that the first step to starting your own business is selecting the business structure that is best fitted for your intent and purposes.There are various ways an entrepreneur may conduct business, including sole proprietorship, partnership, limited liability and corporation. Before selecting a business structure, the potential entrepreneur should consider the following: legal restrictions; liabilities assumed; type of business operation; earnings distribution; capital needs; number of employees; tax advantages or disadvantages; and length of business operation.

The following is a list of advantages and disadvantages of different business entities:

Advantages

Sole Proprietorship
(1) You are the boss.
(2) Easy to form and to dissolve.
(3) You retain all profits.

Partnership
(1) Simple to organize but should get partnership agreement.
(2) Business will benefit if partners have complementary management skills.
(3) Ability to expanded capitalization increased from sole proprietorship.

Corporation
(1) Limited personal liability for debts and judgments.
(2) Can raise income through sale of stock therefore, maximum capitalization.
(3) Lower cost per unit of doing business.
(4) Can deduct the cost of benefits.
(5) Can elect to be S corporation (to be taxed similar to a partnership) if you meet requirements.

Disadvantages

Sole Proprietorship
(1) Very hard work.
(2) Unlimited financial and legal liability.
(3) Management deficiencies.
(4) Limited working capital continuity of operation.
(5) Potential lack of continuity of operation.

Partnership
(1) Unlimited financial responsibility partners are jointly and individually liable for actions of their partners.
(2) Potential conflicts of authority.
(3) Potential personality conflicts.

Corporation
(1) Expensive, complicated to form.
(2) More legal compliance requirements from federal and state agencies.
(3) Double taxation – dividend paid to shareholders aren’t deductible.
(4) May be considered Impersonal by customers.

Choose A State of Formation

One of the first decisions a business must make after deciding to incorporate involves selecting the proper state of incorporation. A corporation is not required to incorporate in the state of its operations. However, often the best decision may be to incorporate in your home state. Two issues must be weighed to determine the proper state:
(1) a dollars and cents analysis comparing the costs of incorporating in the state of operation versus qualifying to do business as a foreign (non-resident) corporation in the state under consideration and
(2) determining the advantages and disadvantages of each state’s corporate laws and tax structure. If the corporation is a closely held corporation (not publicly traded) and does business primarily within a single state, local incorporation is often preferable. The cost of local incorporation will usually be less than incorporating in another state and qualifying to do business as a foreign corporation in the state. A foreign corporation that qualifies to do business in another state is subject to taxes, annual report fees, potential lawsuits and legal manners from both the state of incorporation and the qualifying state.

Choose Name for Corporation

Once the structure of the company is chosen the potential entrepreneur should choose a business name for the corporation. The name of the company should be chosen carefully. It is very important that entrepreneurs portray the desired image for their new corporation. Legally, the name selected must not be “deceptively similar” to any existing corporation within the incorporation state. In addition, there are state specific required corporate indicators such as Corporation, Incorporated or an abbreviation.During this process it is advised that potential entrepreneurs contact their Secretary of State, Corporations Division to learn about name availability.

Determine the Composition of Company Stock

The next step is to determine the composition of the business stock. Many different options are available in regards to the structure and composition of a corporation’s stock. Where the corporation has a fewer than 35 shareholders, a simple, inexpensive model for the structure of corporate stock may be most appropriate. A savvy business owner will recognize that authorizing a number of shares that will qualify for the minimum annual state filing fee is often a wise, money-saving choice.

Determine Tax Year

Each business taxpayer must figure their taxable income on an annual accounting period called a tax year. The first year the business files an income tax return it adopts either a calendar tax year or a fiscal tax year. The calendar year is the most common tax year. A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. The other tax year is a fiscal tax year. A fiscal tax year is 12 consecutive months ending on the last day of any month except December.

Businesses must use a calendar tax year if:

(1) You keep no books.
(2) You have no annual accounting period.
(3) Your present tax year does not qualify as a fiscal year.
(4) You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations.

Designate Board of Directors

The designation of Board of Directors is legally required if a corporation is formed. The Board of Directors are essentially necessary for the management of the corporation. Their responsibilities include establishing all business policies and approving major contracts and undertakings. In addition, the Board may also elect the President. Ordinary business practices, however, are carried out by the Officers and employees of the corporation under the directives and supervision of the Directors.

Designate a Registered Agent

Almost all jurisdictions require that the corporation designate a registered agent for service of process. However, in most cases, anyone who has a street address (no P.O. Boxes) within the state of incorporation may act as a registered agent for the corporation. The main purpose of the registered agent requirement is to provide potential claimants against your corporation with a live person, whose whereabouts are available in public records, who may accept service of process on behalf of the corporation.

File Articles of Incorporation

Although state laws differ in their filing requirements of sole proprietorships, corporations must file “Articles of Incorporation” – the main filing document which begins the corporation’s existence. Some state laws, such as Illinois, require a sole proprietorship to file an Assumed Name form with the County Clerk.

Hold First Board of Directors Meeting

After incorporation, the first Board of Directors meeting will resolve the following matters: adopt bylaws; issue stock; adopt a corporate seal; and designate a banking institution to serve the corporation’s banking needs. Many states allow the Board of Directors to be comprised of one person.

Determine Accounting Methods

Each new business must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it. Regardless of when payment is received, expenses are deducted in the tax year you incur them.

Obtain an Employer Identification Number (EIN)

To obtain an employer identification number (also known as a tax identification number) the IRS Form SS-4, available on the IRS web site at rs.gov, must be completed. The completed form can and be mailed or faxed to the IRS office indicated on the instructions to Form SS-4. There is no fee. If the EIN is needed quickly, the IRS can assign a tax identification number by calling at (866) 816-2065. The IRS requires Form SS-4 to be completed and present in order to verbally complete the process. The following questions provided by IRS will determine if your company needs to obtain a tax identification number. You will need an EIN if you answer “Yes” to any of the following questions:

(1) Do you operate your business as a corporation or a partnership?
(2) Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
(3) Do you withhold taxes on income, other than wages, paid to a nonresident alien?
(4) Do you have a Keogh plan?
(5) Are you involved with any of the following types of organizations? Trusts, except certain grantor-owned revocable trusts, IRA’s, Exempt Organizations, Business Income Tax Returns, Estates, Real estate mortgage investment conduits, Non-profit organizations, Farmer’s cooperatives and Plan administrators.According to the IRS website, individuals doing business as sole proprietors will not need an EIN, unless they decide to hire employees. All income for sole proprietors without employees can be reported using the owners Social Security number.

Register Business/Obtain License

Depending on state laws your business may be required to register with the Department of Revenue or obtain a retail license to sell/service to the public. Most states have sales tax laws designed to turn retail businesses into tax collectors. Call or go to your states Department of Revenue office and request the form for business registration to obtain a retail license. A small fee will generally be required and in some states you must renew the license each year. Once your permit is mailed to you, you will be given detailed instructions on how to file the sales tax forms each month.

Get a Business License

Many states and localities require business to obtain a business licenses or permits no matter what type of entity it is. The license can usually be obtained in person by going to the city or village hall business licensing office. These offices usually charge a nominal annual fee for the annual issuance of a business license.My real estate background and experiences with various city halls have demonstrated that the licensing offices’ primary areas of concern are the type of business, hours of operation and location of business. Depending on the scope of your business, your home may require clearance from the zoning department. Although every municipality has different zoning laws, zoning is generally not a problem with small home based businesses. The zoning departments’ main focus is to ensure that new businesses remain legal and conforming to their zoning regulations; don’t improve or build additions that may encroach on easements or public utility lines; and do not disturb the neighbors.