Planning on starting an online business? First thing first. Here are the 5 mistakes to avoid when starting an online business. Once you decide on an online there will be a ton of excitement. Your going to want to get that train rolling right away.
There will be things you need to think about to start it off right, so you don’t end up feeling like a one legged man in a butt kicking contest. Start your online business off right, so you can spend more time on making it run like a pronghorn antelope instead of running like an African Spurred tortoise.
I have nothing against those tortoises though! I know some people that have one that lives in their garage and has free roam to their back yard. He has a doggy door, or tortoise door rather, on the side of the garage. He is about 70 lbs. and is named Bubbles. Haha!
Anyway, here are the 5 mistakes to avoid when starting an online business.
Don’t use Personal Credit for Business Expenses
This is a big mistake for some when starting an online business. Usually, there aren’t a lot of start up costs to an online business and there are ways to actually start an online business for free. However, when you just have to have that new laptop with the awesome NVIDIA GeForce RTX 2080 Ti graphics card, don’t put it on a personal credit card.
If you need some new equipment, I suggest you get a business bank account to start. Yes, you will need to have some money in there to buy that sweet new camera. You may have to put some personal money in there to get started.
The best case scenario is to buy the cool stuff after the business is starting to make some money. Then you will have no problem showing them as a business tax write off.
Keep Business & Personal Assets Separate
Set up something like an LLC. This will make it so your business is a separate entity from your personal stuff. This will also help you take advantage of the tax deductions for your business.
Tax deductions like, you know, the sweet new gaming laptop you just had to have to run a successful online business. Hey! I’m not judging here. We all need them!
Make Plans to Pay Taxes
Often times people will start an online business and because of the very low overhead cost, they realize a profit (some very substantial) very early on. This is money that your business will have to pay taxes on.
Once your online business is going and cash is flowing remember to plan for taxes. When tax time rolls around you won’t want to scramble to pay that crazy percentage of taxes. At the very least, you will be wasting mental energy that can be used to grow your business.
Keep enough money in the bank to pay Uncle Sam and keep learning! Keep learning of all the tax advantages you can get your hands on. This bring me to the next mistake to avoid.
Make Sure You have an Accountant
A good accountant can make a huge difference in you bottom line. When you are starting an online business make sure you at least talk to an accountant.
They will help you to get things set up so you can track everything going forward. They also will let you know what is, an is not, considered a tax deduction.
Don’t be afraid to shop around for one. Don’t end up with one that you can never get in touch with.
I know a guy that will call is accountant 3 times over a couple of weeks with no call back. The only way he can seem to talk to him is to catch him at his office. What a pain! I say, it’s time to find a new accountant.
Try Not to Grow Too Fast
Growing too fast can seem like a good problem to have however, it can be very dangerous. If your business doesn’t have the right systems and infrastructure in place everything could crash.
Trying to grow before it’s time to grow can be dangerous as well. You might find yourself wanting to push too hard and out-source a whole bunch of stuff. This will cost money that the business may not have.
It will be hard to fine tune the two dangerous ends of this. Every business is different and grows at a different pace so trust your gut. Track the progress and make corrections all along the way.
Hers is the quick recap of 5 mistakes to avoid when starting an online business. Obviously, there are more things to be cautious of and some are more important than others. Hopefully, this will give you some food for thought before you get too crazy about selling those awesome tactical backpacks online.
- Don’t use personal credit for business expenses.
- Separate business and personal assets. (form an LLC or something of the sort)
- Plan for paying taxes.
- Make sure you find and talk to a good accountant.
- Try not to grow too fast.
Now that you have read through all this you obviously have an idea, or an interest for building an online business. So what’s next?
You are going to need a website I’m sure! If you are interested in getting a website up and going then, click on my #1 recommended method for starting a website to learn more. You can start for free.
Whatever stage you are in this new venture I challenge you to make a decision. Get something going, learn and adjust. Time is always wasting so you just need to start somewhere.
Take action and start now!