Do you have a business idea with the potential to trade online? This guide explains how to get your online business started.
Trading online can involve selling a product or service, or offering an online booking platform. How you trade online will depend on your business offering so some of these steps may not be relevant to everyone.
In the beginning, you may consider starting an online business at the same time as working a full-time job, so it’s important that you’re aware of your obligations as a business owner.
1) Decide how you want to sell online
Will you set up your own website, use a reseller platform like Amazon or eBay, or a mixture of online sales and offline sales?
Consider writing a business plan and doing research on what option is best for you. Writing a business plan will help you narrow your target audience and determine what your customers expect from your site. You should ensure you can meet your customer’s expectations.
Shopify and Squarespace offer templates for new e-commerce businesses. They’re easy to use and easy to manage. There are also great tools online that help you manage your client’s expectations. For example, if you want your clients to book meetings with you, Calendly is a great platform to manage your appointments online.
2) Sole Trader or Limited Company
Starting an online business means officially registering with Revenue and the Companies Registration Office (CRO).
Decide what business structure you want to be in – Sole Trader or Limited Company? There are advantages and disadvantages to both business types.
In general, Sole Traders take on more risk than Limited Companies. Sole Traders are personally liable for the debts of the business; therefore, you may need to sell off personal assets to repay debts.
On the other hand, you should also consider the pros and cons of a Limited Company, as it might be the right option because the registration process creates a separate legal entity. This provides more security for you as you have limited liability as a company.
3) Build your brand, website, and social media presence
Starting an online business means you need an online presence to stand out from your competitors.
There are many different agencies and consultancies you can use to help you build your brand if you don’t have experience. Website design, search engine optimisation, branding, digital marketing, and user experience are all areas you can hire experts in.
4) Focus on your analytics
Starting an online business means you can use software like Google Analytics to track the success of your website.
Visitors, conversions, and average order value per customer are all interesting statistics that can help you understand your business.
Online e-commerce platforms like Shopify have ready-made reports on its platform. Google Analytics also offer online courses if you want to learn how to analyse your online business.
5) Set up your taxes properly
As a business owner, you need to ensure your business is tax registered.
Sole Traders need to register for Income Tax and Limited Companies need to register for Corporation Tax. This needs to be done before your business starts to invoice clients.
Other taxes you need to consider registering for include: Value Added Tax (VAT) and Pay As You Earn (PAYE).
If your business is applying for VAT, then you should know how to charge VAT. There are different guidelines depending on what you are selling and to whom. So, always seek professional advice before you register for VAT.
6) Know what expenses you can claim
Claiming tax-deductible business expenses reduces the amount of tax you pay at the end of the year.
The expenses you claim must be wholly and exclusively for the purpose of the business so it’s important you know which expenses qualify. For example, there are a number of expenses you can claim if you are working from a home office.
You should ensure that you are keeping track of all your expenses so you don’t overpay on your tax bill. Using online accounting software will greatly help you reduce the administration time of recording and maintaining business records.
Ready to set up your online business?
If you’re ready to take the next step to set up your online business, get in touch with our Client Sevices Team. We can talk you through what you need to do to register with the appropriate authorities.
Ensure you get set up correctly with our Company Formation Service.
We take care of everything you need so you have time to focus on getting your website, suppliers, and analytics in order for our online business.
If you have queries about how an online business operates, let us know how we can help you.
Rachel is a certified company secretary from The Law Society College Dublin and currently leads the Company Secretarial Team at Accountant Online. Areas of expertise include Company Formation in Ireland and the UK, Company Secretarial procedures and regulations, and the Companies Act 2014 relating to small business and company directors.