- So you're trying to start an online business
but you're not quite sure what to do;
and you're worried you're gonna make a mistake.
Well, worry no more, my friend.
You've come to the right place.
So I'm gonna give you some legal tips
on how to start an online business
and how to avoid some of the common mistakes
that online businesses make.
(upbeat music)
Hi, I'm Aiden Durham, business and branding attorney
with 180 Law Co. in Colorado.
And you're watching "All Up in Yo' Business."
Over the eight, nine years that I've been in practice,
I've worked with hundreds of online businesses
and helped hundreds of clients
start successful online businesses.
And I've seen a lot of mistakes that online businesses make
when they're starting out or even, you know,
as they're starting to grow
and become more profitable and successful.
Before we get into my online business mistakes to avoid,
if you haven't already subscribed,
hit that subscribe button
and be sure to hit that little notifications bell
so you get notified anytime I post a new video.
All right, now let's talk about those mistakes.
Let's start off with probably the number one mistake
that I see new online businesses make.
And that is wasting money in the beginning
on things that aren't needed:
like forming an LLC, or getting a trademark registration.
Yes, of course, both of these things are very good.
But neither of them are required or necessary
to start a business,
particularly if you're on a tight budget.
Hey man, if money is no object
and you've got all the money in the world
to throw at this thing, then yeah.
Form an LLC, register all of the trademarks,
do all of those things as soon as you can.
But if that's not you,
if you don't have all of the money in the world,
if you're like a lot of the clients and calls that I get,
"Aiden, I wanna start an online business.
"I need to form an LLC first."
Do you need to form an LLC?
Do you need to spend the few hundred bucks to do that?
"Aiden, I need to register my trademark
"before I launch my online business."
Do you need to do that?
Do you need to spend the hundreds,
potentially thousands of dollars on a trademark
when you haven't even started your business?
You probably don't need to.
So these big mistakes that I see are wasting money
on the things that you think you need,
but you don't really need
when you're starting your business.
But at the same time, that brings me to mistake number two,
which is not at least clearing their business name
before they start.
So no, you don't have to get a trademark registration
when you're first starting your business.
But at least doing a good trademark clearance search
beforehand is gonna be super helpful.
You wanna make sure the business name
that you're gonna be using is available for you to use
and potentially register as a trademark later on
if you want to.
You're gonna wanna make sure the URL,
the domain names are available, social media handles,
those kinds of things.
Doing a search, making sure this name
and any branding elements like a logo,
those things are at least available
before you start using them in your business,
is gonna help you grow a strong brand and prevent
potential trademark infringement issues coming up,
those nasty cease and desist letters,
or even needing to rebrand later on.
The third mistake I see comes from those
who do decide to form an LLC for their online business.
Because that is a good idea to do it.
Even if it's not necessary, it's a good idea.
But the mistake I see happening is that
you just form the LLC and then you think you're good to go.
You don't take any extra steps
to separate yourself from the LLC:
like setting up a dedicated business bank account,
or having an operating agreement prepared,
or doing all these other little things that you need to do
to uphold that liability protection
that we get from the LLC.
The next mistake that I see happening
very often with online businesses is that
they use their home address
when they register their business.
Now, I say this is a mistake.
It's not necessarily a mistake.
For some people, this is perfectly fine.
But a lot of us when we're starting an online business,
we're typically gonna be working from home.
We probably don't have an office yet.
And so if we're forming an LLC
or filing a DBA or a trade name or something,
a lot of us since we're working from home
we're gonna use our home address as the business address
or the principal office address, which is fine for most
if you don't care about your home address being public.
But a lot of us might care
about our home address being public.
Maybe your business is teeny tiny or non-existent now,
but what if it's the next Amazon?
I don't know that Jeff Bezos would want his name
or his home address just publicly available
on corporate paperwork for Amazon.
Same idea.
Think about your own privacy
and your own personal information
and if having your home address
is something you really want publicly available.
If that's not what you want, then I suggest
looking into some kind of a virtual office address.
I am a big fan of Alliance.
I have partnered with them to offer a discount
on their virtual office setup fees.
So check the link in the description
for a link to sign up with Alliance Virtual Office,
as well as a discount code so you can save
on that setup fee with them too.
This now brings me to the next big mistake
that I see online businesses making.
And that is not taking advantage of tax deductions
that might be available to them.
So again, let's say you're working out of your home.
There are a lot of home-office tax deductions
that you can be taking: whether it's a portion of your rent
or your mortgage, or your utility bills
or your internet bills, or cell phone bills
if you're using your cell phone for business.
Pretty much anything that you're paying for
for your business is at least to an extent deductible.
And so if you're missing out on those,
then you're gonna be paying more taxes than you have to.
And who wants to do that? Not me.
So make sure you are working with a good tax professional
or a CPA to help take full advantage
of all the tax deductions that may be available to you
so you can save more money on taxes
with your online business.
The next mistake, whoo boy, this is a big one.
And I see it all the time.
And that is not having insurance for your online business.
I think people think: Oh, I formed an LLC.
I don't need insurance.
Or I'm just an online business.
I don't have a store.
What do I need insurance for?
No, regardless of if you've got an LLC or not,
every single business,
every single business can benefit
from at least some form of insurance coverage.
Even if you're just online selling products,
even general liability coverage will benefit you.
Or if you are selling products
and maybe you have inventory in your home,
you have, you know, your supplies.
If you design things and sell on Etsy
and you have your supplies, your crafts
and your art supplies in your home,
if your home burns down, those are business assets.
And your home insurance or your renter's insurance
may not cover the loss of those business assets.
And so, property insurance to make sure
your business property is going to be covered
in the event of a loss.
Or maybe you're a coach, a business coach,
fitness coach, any kind of coach,
professional liability insurance is going to be important.
If you have employees, workers' compensation.
There's gonna be at least one insurance policy
that you're gonna want,
regardless of the nature of your business.
Now, when it comes to insurance, you guys, I am obsessed.
I cannot stop talking about Embroker.
For real, I'm obsessed with them.
Embroker is an online insurance marketplace
for small businesses.
I'm telling you, they offer every kind of insurance policy
that your business might need.
I personally went through Embroker
for my legal malpractice insurance initially
because they got me rates significantly lower
than the insurance carrier that I'd been with
for the past eight years.
So I just went through them for professional liability.
I'm currently working with them to get my general liability
and my property insurance.
Cyber insurance.
Ooh, you guys, if you are collecting
any personal information from anybody online:
email addresses, names, especially dates of birth,
Social Security numbers,
whoo, cyber insurance especially for an online business
is gonna be big.
If there's any kind of hack or data breach
with your systems, that cyber policy is gonna come in
and help you remediate the situation,
help with potential PR issues,
and help you kind of get things under control
in those situations.
So anyway, my point here is when it comes to insurance,
I'm obsessed with Embroker.
Check the link in the description if you wanna learn more.
Which brings me to my final mistake
that I see a lot of online businesses make,
which is a lack of contracts.
I don't care what kind of business you've got,
what you're doing, no matter what your industry here,
you're gonna need at least some kind of contract.
If you're a coach, a coaching contract.
If you're any kind of service provider,
a service contract, of course.
But even if you have a website,
you need terms and conditions for your website,
which is the contract between you and your website visitors.
If you're selling products on your website,
you need terms of sale, or a refund policy.
And if you're collecting any kind of information
from website visitors: email addresses, names,
even tracking, Google Analytics info,
you need a privacy policy.
You need a privacy policy.
So it's imperative that you check with an attorney
in your state who can help you
in determining the right kinds of contracts that you need
and help you in drafting those.
Of course, an attorney is not in everybody's budget.
It's not always a possibility.
And so that's when I suggest
checking out the CEO Legal Loft.
The CEO Legal Loft has got you covered
in respect to pretty much all the contracts you can need.
And so if that's you, if you're not quite
in a position to afford to work with a lawyer
to have your contracts drafted,
then the CEO Legal Loft is a great alternative
for lawyer-drafted and Aiden-approved contract templates:
everything from service agreements, coaching agreements,
website terms and conditions, website disclaimers,
privacy policies, confidentiality agreements,
independent contractor agreements,
whatever it is you need, the CEO Legal Loft
is gonna have a great template for you.
And you can get unlimited access to all the templates
including a ton of more resources for your business
by joining the CEO Legal Loft membership.
And you'll even get a promo code for 50% off
of my DIY trademark course, BRANDISH,
if you sign up for the CEO Legal Loft membership.
But you have to use my special link in the description
if you wanna get that BRANDISH promo code
through the CEO Legal Loft membership.
But either way, when it comes to good lawyer-drafted
and lawyer-approved contract templates,
check out the CEO Legal Loft,
a link to that in the description.
So when it comes to starting an online business,
there are a lot of mistakes that you can make
and a lot of things you want to avoid.
Don't waste money in the beginning.
Make sure you've cleared your trademarks
and your name before you start using it.
If you are gonna form an LLC or a corporation,
make sure you're setting it up properly
and separating yourself from the business.
Use a virtual office address like Alliance Virtual Offices
if you're working from home and wanna keep your home address
off of public records.
Don't miss out on tax deductions.
Make sure you've got good insurance coverage.
Check out Embroker for that.
And make sure you've got all the contracts you need.
And check out the CEO Legal Loft for that.
And of course, if you're looking for more information
on all the things that you need to do
when you're starting your online business,
check the description for a link
to download my free ultimate new business checklist.
If you got value out of this video,
hit that thumbs up button and be sure to share it
with all of your friends and family
and spread the good word of "All Up in Yo' Business."
And of course, be sure to check out some of my other videos
for more legal tips and tricks.
Thanks so much for watching.
I'm Aiden Durham, and I'll see you next time.
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