hey it's patti scharf CPA and co-founder of catching clouds the leader in
e-commerce accounting today we're going to talk about how to start an online
retail business and I want you to stick around to the end because I've got
something that I want to give you that has lots of resources and will help give
you kind of a step-by-step on how to get started I'm going to go through the
topics here pretty quickly because nobody wants to sit around and listen to
me talk for 45 minutes about all the steps you need to take all right so I'm
gonna do a really condensed version I'm going to tell you what I'm not going to
do is I am NOT going to talk about sourcing products I'm not going to talk
about marketing I'm not going to talk about lead generation or any of that
kind of stuff because that has been covered ad nauseam
on YouTube to date and I'm gonna focus on the stuff that I really know the most
about and that is the back office business side of things all right so
let's just jump in and get started
all right the first thing that you need is a foundation so your foundation you
need to go talk to a CPA and an attorney either one can probably fill in for the
other in a pinch but really it's good to have one of each of those because you're
gonna need somebody in your court down the road but if you meet with them right
up front even if you don't have any money they're not going to charge you
that much for an hour consultation to help you pick your entity type and to
help just kind of tell you what pitfalls are coming up that you can avoid all
right it's the this is one of those times where you it's much more expensive
to have to fix something that you screwed up then to find out the right
way to do things right up front all right
so find a CPA find an attorney consult with them you're gonna pick your legal
entity type you're gonna picture pick your tax entity type whatever is best
for your situation you need to register your business with the IRS you're gonna
need to register your business with the Secretary of State if you have a trade
name or something like that that you want to use that's different from your
legal name then you want to register that you're going to open up a business
checking account because you do not want to be combining your business and
personal finances those need to be separate and so that you can have clean
information for both all right as soon as you have something worth protecting
make sure you go get some business insurance talk to an insurance agent
they're like a hundred billion different types of insurance I didn't even know
until like I don't know seven years ago when we got it that's such a thing as
cyber liability insurance existed go talk to an ins an insurance agent see
what kind of protection you need because the last thing you want to do is spend
all this time and energy to create this amazing business just to lose it through
no fault of your own the last thing is if you need to collect sales tax and
remit it to your state make sure you register for a sales tax license it is
illegal to collect sales tax when you don't have a license so make
sure you register if you're going to get one if you don't know about all the
sales tax rules talk to a CPA you can actually get started there there's some
changes recently that came down the pike on sales tax
I mean and when I say recently I mean like two weeks ago and you can check out
this video here it'll give you some more information about what kind of
implications there are for you alright so the next thing you're going to set up
your operational systems you're going to find out what shopping cart or
marketplace you're going to sell on chances are you already kind of
suspected what you were gonna be doing in advance before you even really got
this far but whether you're selling on Amazon shopify bigcommerce Magento on
your own site or on or on a marketplace like eBay or something like that figure
out which platforms you're going to use you're gonna need to vet some of the
payment processors and get at least two because you don't want to have just one
payment processor and then you forget to pay your monthly bill or like your
credit card expires that has that monthly bill attached to it and so
you've got three hundred thousand dollars a month coming in on Shopify but
you forgot to pay your thirty nine dollar bill and so they just turned off
your payment processor and now you can't collect any money from your customers
that's not a good thing so get to payment processors one is your normal
one and one is a backup one just to protect yourself in case something gets
hacked or anything else alright once you have your shopping carts you have your
payment processors go into your shopping carts and make sure that you have set
the sales tax settings appropriately for your business if you do not have a sales
tax license somewhere go in and make sure that they are not collecting sales
tax if you do have sales tax license go login and make sure that you are set
you've set it up to collect sales taxes and make sure you're collecting it
everywhere so if you're collecting on Amazon in 23 States you need to be
collecting in 23 states also on Shopify eBay and all the other places next
you're going to set up your accounting systems
one of the most important ones for you as an online retailer is going to be
especially if you're selling on multiple different platforms is going to be cloud
inventory system I've got a whole nother video on cloud inventory go check that
out but it's it's really great for
operational efficiencies for an e-commerce seller the next thing you
want to take a look at is setting up an accounting system because you want to
make sure that you're keeping track of all this stuff that you're doing so we
love zero I know a lot of people like QuickBooks Online also I've got another
video that compares the two if you don't know where to start
regardless of the system you use you want to be careful about pushing in each
individual transaction it can crush your system it can be impossible to reconcile
and if you want more information about that watch this Shopify video where I
talk about all the ins and outs of that if you are collecting sales tax and
remitting it I highly recommend you get a tool like taksa fight ax gr Avalara
that will help you manage your sales tax manage the payments and manage the sales
tax filings that you need to do to stay on top of all the states and compliance
for sales tax okay so after you've set up all those basics basically all you do
is you go out and you sell sell sell sell sell so you can watch all those
other videos that I was talking about before to find out how to optimize your
sales and things like that but you're going to want to check out different
tools that will help optimize your performance and you want to keep track
of how things are doing so some ways that you can do that your cloud
inventory tool is going to have some great analytics that will help you keep
track of profitability by SKU profitability by order you'll take a
look at things like reprice errs feedback tools you'll want to make sure
that you're keeping an eye on your cash flow because if you've got too much
money going out for inventory and you don't have enough coming back in you
could really get into a cash crunch we'll talk more about that on another
video another time okay so once you have all those basic set up and it just
starts becoming a running business all you really need to do is
just keep learning just keep your ear to the ground and see
what's new out there keep expanding your knowledge about the things that you
don't know about if you're unfamiliar with some of the more financial aspects
of it I highly encourage you to read simple numbers straight talk big profits
I encourage you to read profit first I encourage you to read the e-myth
revisited and making money is ruining your business so I hope this helped if I
went really too fast for you or I didn't have enough information please look down
below because there's a link there that'll take you to our ebook that we
put together called ecommerce startup how to start your own online business
and it's got lots of information about all the information I talked about and
more and I hope you like this video if you did please like comment and share if
you haven't already please subscribe and I will catch you later
you