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Turn Online Sales into a Business, Part 1

Take these first steps to make your dream of business ownership a reality.

You’ve been selling on eBay for a while now. Sales are steady, and you’re making a good profit plus a little extra to reinvest in your inventory and shipping costs. Have you thought about taking the next step and starting an online business?

Don’t let the idea of setting up a business scare you. There are benefits that come along with this. For instance, some vendors prefer to work with sellers who have all their paperwork in order, feeling this adds “legitimacy” to a seller’s operations. Of course, you also get tax write-offs—and you can protect your personal assets should you hit hard times down the road.

We talked to a few experts who have helped millions of entrepreneurs with starting an online business, both online and off, to get their advice. In this two-part series, we’ll share their guidance about what to do to make owning your business a reality—and missteps to avoid as you tread the entrepreneurial waters.

“Starting an [online] business is like starting any other business,” says Kelvin Ho, executive director of My Own Business, or MOBI, a nonprofit organization that advises entrepreneurs around the world. “You have to ensure the demand is in place, the suppliers are in place, etc. [Sellers] might not need to consider leasing a business space, but they’ll have to do everything they would with any other business.”

Define some niche and be the greatest source for that product in the world

Step 1. Find your niche

Phil Holland, MOBI’s founder, says the biggest mistakes entrepreneurs make when they decide to start a business is choosing the wrong business venture and being too broad in terms of what they want to offer. He says entrepreneurs should become experts in one area, and fine tune their knowledge on that subject.

“Define some niche and be the greatest source for that product in the world,” Holland advises.

This means knowing your product line inside and out, and researching the people who would likely look for your items and the keywords they will likely use. This will help you find your target audience and focus your messaging on what they want, which will make shoppers more receptive to you.

But before you get too invested in a product line, be sure to thoroughly research the items you want to offer to ensure the demand is there, Ho warns.

“They need to do the math,” he continues. “If people want to quit their jobs, they need to know their sales will support that move.”

Step 2. Make a business plan

Once you know there is a demand for your product line, and that the market is not overly saturated, you’ll next need to write a business plan. As we researched this topic, we often saw business plans referred to as the foundation of any business venture—and something you don’t want to go without. However, the words “business plan” can be a headache to some, Holland notes.

“Most people have great difficulty putting a business plan together because they have no idea what goes into a business plan,” he explains. “A business plan is a roadmap.”

This roadmap should include:

  1. A “vision statement” that outlines the goals you have for your business and its purpose
  2. A description of how you’ll manage and operate your business
  3. An assessment of the competition that’s out there, and
  4. A one-year cash flow projection to fund your business

Holland adds that these need to be focused on short-term objectives. “One year should be sufficient,” he continues. This is because your business will change over the years, and your business plan will have to change with it.

There are companies dedicated to creating business plans for new entrepreneurs. Some of these charge for their services, but others, like MOBI, have templates you can use for free to define your objectives and set up your own business plan. In addition to this service, MOBI also offers two free courses on its site that discuss starting up a business. More than 20 million people have visited the Web site to get help starting their own business, Ho notes.

Unless you register your DBA, other businesses will not know you exist and may take the name

Step 3. Register your business name

Now that you have the foundation of your business, you need to start building your brand to foster trust among buyers and encourage repeat customers. This starts with your business name. If you don’t yet know what you want to call your business, What’s in a Name discusses things you should consider as you decide what to call your venture. Just remember that your name should be relevant to your business and easy to remember. Once you’ve come up with the right one, you’ll need to make it legal. This means getting a DBA, or a Doing Business As.

“You will not be able to enforce any contracts you sign under your business name unless the name legally belongs to you,” MOBI notes. “Another important point is, unless you register your DBA, other businesses will not know you exist and may take the name.”

The registration process varies from county to county. Start by going to your county clerk’s office to see exactly what you need to do. You may have to pay a small fee to register the name, and your county will likely do a search for the name you want to register just to make sure it’s not already taken. Once that gets squared away, consider buying the corresponding custom domain, especially if you have your own online store or site. Auctiva customers can purchase custom domains through Domains can also be purchased through sites like Go Daddy and

Step 4. Get a business license

Now it’s time to get a business license. This process also varies from one county to the next, but the process isn’t too difficult, says Tammy Cason, online and social media marketing manager for SCORE, a nonprofit organization devoted to helping people start and manage their own businesses. She adds that there are lots of resources to help sellers starting an online business as they look into licensing.

“Search ‘Florida state tax license’ or ‘Illinois state tax license,’ and lots of help will show up,” she says. “The SCORE mentors in each city and state should [also] be quite familiar with the issues of starting an online business. Online business is effectively no different than any other business.”

You can also head to your local city hall or courthouse to sort through the licensing process. According to MOBI, your city clerk should be able to help.

“I think it’s best to go down to their city hall and see if they can take it on themselves, and if they’re fully comfortable with the process,” Ho notes. “If they’re not, that’s what the professionals are there for.”

That’s right, there are companies that will do this paperwork for you, too, but they do charge fees for their services. For instance, is one of these services.

Now that we’ve covered the nuts and bolts of starting an online business, next time we’ll discuss the steps you need to take to get your business off the ground—and keep it going. Read Turn Online Sales into a Business, Part 2.

About the author

Olga Munoz
Olga Munoz is editor of In addition to writing news and feature articles about e-commerce, selling trends, online marketing and other topics of interest to online sellers, Olga manages the site's social media efforts. A journalism graduate of Chico State, Olga says her favorite part of being a journalist is learning interesting facts that help put stories into perspective, attending industry events and meeting interesting people "that leave you smiling, even in tough situations." Opinions expressed here may not be shared by The Online Seller and/or its principals.

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