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Turn Online Sales into a Business, Part 2

Take your venture to the next level with these tips from the experts.

So you’re starting an online business and you’ve got all the paperwork squared away. You’re eager to get out there and start selling big time. But there are just a few more steps you need to take to really kick your online business into gear.

In Turn Online Sales into a Business, Part 1, we discussed how to find a product niche, make a business plan and go through the legal and administrative steps to establish a legitimate business. In this article, we’ll pick it up at Step 5 and go over how to get the word out about your new venture, and how to make sure you’re able to keep it going, and growing.

Step 5. Establish funding

Now that the paperwork is out of the way, it’s time to talk money. You will need it to buy inventory for your online store or eBay listings, to pay for your shipping costs and materials and for general business expenses. So unless you are extremely frugal and resourceful—and even if you are—you may need to apply for a loan or two. You may not have to pay for retail space if your business is home-based, but you will still have expenses like any other business.

The most frequently asked question by entrepreneurs is, ‘Where can I get the money to start my business’

New business owners know this, and it’s a top concern for many entrepreneurs, says Phil Holland, founder of nonprofit organization My Own Business, or MOBI. “The most frequently asked question by start-up entrepreneurs is, ‘Where can I get the money to start my business?'” he says.

When we talked to him, he suggested first looking to relatives to help fund your venture. They know you best and want you to succeed. You should stay away from banks, however, as they are unlikely to grant a loan when there is no business collateral. You could also use credit cards to finance the cost of starting an online business, but be careful not to get carried away. However, the best way to finance your business is to build up retention earnings, Holland says.

This means setting aside part of the profits from each sale for future investment in your business. This allows you to get funding for your business without having to reach into your own pockets.

You could also try Kabbage Inc., a privately funded company that makes loans exclusively to online sellers. The company does have some sales-volume requirements and typically works with vendors who have at least $50,000 in sales a year. But it offers loans of up to $15,000, so it is worth checking out. Just go to, and see if you would qualify for a credit line. Then, if you do, Kabbage will deposit the money into your PayPal account.

Do note, however, that the company charges a flat rate per $100 you borrow for the first 30 days. And if it takes you longer than 30 days to pay back the loan, you will face additional fees.

Step 6. Market your business

Now it’s time to get your name out there. If you don’t already have business cards that include a Web address for your online store or eBay listings, you’ll want to get them very soon. They’re a good way to remind past buyers to visit again in the future, and for you to introduce a new customer to all of your products. Include your business card in the shipments you send out and hand them out at any business networking events you may attend.

Don’t forget to use social marketing sites like Facebook, Twitter and even LinkedIn. These can give your site higher rankings on Google. Just be sure you don’t come off as pushy on these sites. People are there to make connections, pass the time and have fun, not to get the hard-sell on your newest offerings. Don’t bombard followers or friends with shameless plugs for your products. Instead, offer interesting information about your niche and your products, and build a sense of community with your buyers.

And don’t forget about the importance of customer service. This will be one of the best ways to market your business. Remember that people will tell their family and friends about their shopping experiences.

“Answer e-mails promptly,” adds Tammy Cason, online and social media marketing manager for business mentoring organization SCORE. “I have most of my business e-mails forwarded to my cell phone, and sometimes I will call a customer on a Saturday morning or Monday night if he just sent me an e-mail. People like suppliers who are on the ball and ready to help. I even answer some e-mails from my cell phone if I can do it easily. We live in a ‘now’ world.”

Sole proprietorships have the least amount of legal formalities, but also assume the most personal risk

Step 7. Incorporate

Finally, when starting an online business, you may want to consider whether you should incorporate. Incorporating will allow you to open a bank account, own property, enter into contracts with others and just do business under your business’ name. And it will do something else, too: protect your personal assets should you find yourself in financial trouble down the road.

“One of the most important features of a corporation is that, generally, its owners are not personally liable for the debts of the corporation,” notes LegalZoom, a site that provides legal advice.

This means if you have difficulty with your business later on, a creditor can’t take any property that is not owned by the corporation—such as your house or car, which are in your name, not your business’. However, if you’re not incorporated and later find yourself in financial turmoil, your creditor can take almost any property of yours to settle the debt.

There are several different types of corporations, including sole proprietorships, partnerships, limited partnerships, various types of corporations and limited liability companies.

Sole proprietorships have the least amount of legal formalities, but also assume the most personal risk, according to SCORE. With this type of structure, the owner of the business is solely responsible for the operations and finances of the business, and his or her personal assets can be taken if the business finds itself in financial hot water later on. C corporations are considered separate from their owners and provide the most protection, but they are “taxed at a corporate level when income is earned, and also taxed at the individual shareholder level,” SCORE explains.

Owners of S corporations are also protected from liability, but they are only taxed on the individual shareholder level. With partnerships, all the partners share profits, losses and management duties, and partners don’t pay taxes on their business, but they must add the profits or losses to their personal tax returns.

You should note that incorporating will mean having to fulfill certain requirements. For example, some types of businesses require that you have certain officers, issue stock, have stockholders, conduct routine business meetings, etc. You may also have to pay registration fees to the state. So weigh the options carefully, and then decide if incorporation is right for you and your upcoming business.

Feel better about this whole business of starting an online business? We hope so. Now take a few minutes to mull it over and, if you’re ready, go ahead and start turning your online sales into a full-fledged business. You now have the knowledge to get started.

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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