Getting Started #1

Your online Business.
What It Takes To Run An Online Store

We will discus here what you need to set up your on-line retail sales business.

You will be running a business and someone will need to work at the business every day. Once you get past the organizational set up, you will be concentrating on finding suppliers (venders). Locating ggod venders who will let you sell their products on line is a slow process (more on finding suppliers later). Once the vendors start sending you product information, the site-building can began. Followed by site launch, site promotion and then sales.

What It Takes To Run An Online Store.

There are some things needed by a brick & mortar retail store that you will not need, such as a storefront and maybe inventory. There are also things you need that are specific to an online store such as e-commerce software.

All Stores Need

1. A Business trade name

6. A phone system

2. An accounting system

7. A federal tax I.D. or S.S. number

3. A sales tax permit

8. A fax machine and fax number

4. A bank account

9. Some office supplies

5. A credit card merchant account

10.A [D.B.A.] (doing business as)

An Internet Store Needs

1. Internet access (high speed)

4. A flat bed scanner

2. An online credit card processor

5. A computer and modem

3. An ISP to host your web site

6. Web page design software

4. An 800 number

7. E-commerce software

Location

You can locate your business anywhere as long as you have access to the Internet. You do need to consider if your location allows you to work without interruption. And allows you to carry on a phone conversation without background noises.

E-commerce Software & Web Page Design Software

You will need the following software: A good e-commerce software (we use OS commerce and open source software http://www.oscommerce.com). OS commerce software takes some coding to get it where it looks good. You could start with Yahoo stores or one of the many E-commerce software programs available on the web. You might start your search by seeing who pay pal recommends.

An FTP program, (file transfer protocol) is used to transfer the web pages and files made by the non data base web-building program (such as front page) to the web-hosting server.

A graphics software package is used to change the size of and to add text to the images of the products you sell before you use them on your web pages (we use dream weaver).

Use might consider using service provider stores as an addition to your main stores web site. More, about this in the Web Site Basics section.

Trade Name

If you already have a business name that you are using ask the following questions about it. If you do not have a name yet use these questions as guidelines in choosing one.

1. Is it simple? Short?

5. Does it indicate what you do?

2. Is it easy to pronounce?

6. Does it have a negative connotation?

3. Is it easy to remember?

7. Is the name available on line as a ".com"?

4. Is it easy to spell?

A well-chosen name can help a business through word of mouth advertising. A customer has to be able to remember the name in order to find you again or to refer you site to another potential customer. We have two names that we use daily. Our online stores and Patiostore.com as our web site name. Both of the names answer the questions given above.

Key Point: Do not choose a name until you have chosen a product line to sell. You will want to pick a name appropriate to the products offered.

* We have out grown the patiostore.com name and operate under a dozen different web site URLs. We answer the phones "our on line stores".

Accounting System.

You will need a bookkeeping system. Any accounting system will do. For our main business we use a software package called Quick Books Available at most office supply stores. For one of our new businesses we use a software that we found on line for $19. If you are new to business accounting you could start with a book keeping service, as your time is better spent working on the web site. They are easily found in the yellow pages. You give them you expense receipts and check book once a month, along with your sales and cost of goods numbers they return your profit and loss statement along with any paper work need by the government entities. Cost is from $50 to $150 per month. You can wait until you get your first sale before hiring a book keeping service.

A D.B.A. (doing business as) & Federal Tax I.D. #

Your county court house will issue you a D.B.A. this is done in person and cost about $20. Take a picture I.D. with you. You need this to open a bank account and to fill out the IRS application for your federal tax ID number. Get these early on as you will be asked for them a lot. The IRS issues Federal tax ID numbers for free, simply fill out the form and send it in. See the IRS.gov web site.

A Phone & Fax Machine

You will need a two-line phone system at a minimum plus a fax line. You can wait until you launch your site to put a two line phone in. You can start with your home phone, but you will need a fax machine as most businesses fax information.

A Business Phone Number & 800 Number
& Fax Number

You can start with your home phone number and add a fax line; this is in addition to any computer lines. You will be giving out these numbers a lot so get them early on. They will nned to be on your business cards, E-mails, credit applications and the 800 number will be on the web site and customer E-mails. Use call notes, not an answering machine. If you are not in, you want to leave the caller with the impression of having reached your voice mail, not an answering machine. These are the basics if you wish to be considered professional and taken seriously.

A Bank Account & Credit Card Merchant Account

Your bank account needs to be in your company's name. Set this up early on as your credit card processor will want the bank account information and all business expenses should be paid by check or credit card. The bank will need a copy of your D.B.A and your federal tax I.D. Number (free from the IRS) in order to open your account. Get the lowest cost account the bank offers as it will be a while before you have much activity.

Choose a bank that can set you up to take credit card and electronic check payments.
Get all the information and approvals now so you are ready to take credit card payments when the time comes. The banks sales person will walk you through the process. You will need a credit card machine, rent it do not lease it. Be sure the sales person understands you do online sales. Start with your bank, then after you have been in business a while and have a track record shop around for better discount rates.

Internet Access (high speed)

You will be using the web a lot, so get a fast Internet connection, ISDN, DSL or Cable. Cost is around $39 per month and worth the money as a time saver. This is different from your web site server, which will reside at your ISP.

A Computer & Modem & A Flat Bed Scanner

You want a fast computer with a large hard drive (80 gigs min.), a lot of ram memory, 1000 gigs of ram, a graphics card, and a 17" monitor. You can start with less but it is slow and hard on the eyes after many hours of working on the computer. You modem needs to be compatible with your Internet connection. You need a good flat bed scanner, as you will be scanning the pictures of the merchandise from the brochures that the manufactures sends you. You will also need a graphics software package to use to manipulate the scanned pictures. You will need a printer to print the customer's invoices with.

Online Credit Card Security

You will need credit card security. Available from Verisign.com or godaddy, Cost is $150 to $350 per year. These service companies use encryption to protect your customer's credit card information so that it is secure. Your customers expect it and your credit card service provider will require it.

An ISP To Host Your Web Site

Your ISP is an important part of your business. Be sure you understand the rate charged per month to host your web site. To start with you want a basic package, you can add services if and when you need them. Your goal is to keep your cost down until sales warrant more expense. Ask your ISP to park your domain name until you are ready to began paying for full service.

You need to own your web site. I will go into more about why later, but for now suffice it to say that you need to own the site and the software. Services were you log on and build a site are fine as an addition to the site you own. Here is one reason, say you spend two months building a site and the sites hoster raises the rates, or changes the policies. Do you start over? Lose profits while you redo everything somewhere else? Hosting cost first year about $60 to $90 per month, cost to park the domain is minimal

A Sales Tax Permit

You will need a sales tax permit for your state. Available form the state comptroller of public accounts. Try looking on the state web site. Most manufactures will ask for your re-sale tax number. Expect to have to put up a deposit. Tell the tax department that you are an online store and most of your sales ship out of state but that you will make a few instate sales. The tax office can provide you with information on collecting taxes for your state.

Now lets look at why people buy on line?