5 Steps to Legally Start Your Online Business
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Hello again! Welcome back to the campfire. 🏕️
You’re SO excited to get started…
You've got your sights set high and you're ready to take on the world.
Right on. 🤙🏼
But before you start making calls and sending emails, there are some important things to consider concerning your business's legal setup.
I remember when I started my first business, I did everything backwards—that is, built a whole website, created products, began social media accounts, created advertising and promo assets… before I ever thought about paying state fees or signing any official documents.
There’s a lot of people out there who say that you don’t need to file for an LLC, trademark your ideas, or get any licenses before you start promoting and selling your business. I listened to those people, but then right before I launched DreamAwake, I listened to my parents’ advice (they’re both entrepreneurs) and filed everything right before I launched. I’m so thankful I did that, and now that I’ve started a few different LLCs and an S-Corp—I’ll always take those important steps before doing anything else.
It can be complicated, tedious, and time-consuming, but in my opinion, it’s just the right way to go about starting your business.
Just do it, it’s important—period.
**If you want a detailed guide for speeding up your startup, grab your free download Total Business Startup Checklist HERE to stay on track and keep everything in one place!**
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Here’s a basic outline of what it takes to start a business in 2023:
1. Prepare
First and foremost, you’re going to need a plan.
Yes, it really is necessary to have an actual business plan, but more than that—you have to do your research. It can be a daunting task, especially if you’re not much of a researcher… but if you really are passionate about following your dreams, you’ll be able to get it done.
Make sure you really educate yourself about the market you want to be in, and get to know your target audience and ideal customer. That way, when you’re creating everything from your products and services to your marketing strategy—you’ll have a clear picture of what works in your industry, and what your potential supporters really want.
One thing to keep in mind is choosing your niche. It might be your first impulse to choose a broad or general idea to reach the most amount of potential buyers, but zeroing in on a very specific need for a very specific (and smaller) audience will put you on a path straight to reaching your ideal customers. A lot of people also have the impulse to choosing their niches based on what’s most profitable.
Please, DON’T DO THAT!!
People can smell ulterior motives from a mile away, and no one’s gonna stick around your ideas just to give you a paycheck. You have to be authentic—which means that YOUR PASSION is the best niche for you to capitalize on.
Focus on what you love, and the ideas will pour in. ACT on those ideas, and people will support your passion.
2. Plan
Once you've got a good idea of the type of business you want to start, along with thorough knowledge of the industry it‘ll operate in—it’s time to make a plan! A lot of new business owners make the mistake of not creating an official business plan before they start (I was one of them).
Don’t make that mistake!
Your business plan will give you the framework, roadmap, and timeline to turning your ideas into reality. You can use it to keep on track with your goals and even receive funding to start your business. In fact, in order to receive most loans and grants for your business, you’ll need an official plan.
On top of that you have to figure out your website, or what store platforms you’ll be selling on, and which social media channels you’ll be focusing on to promote your idea. If you’re not very experienced or just starting out, I’d say to stick with a traditional website and focus on 2-4 platforms (i.e. Instagram, Facebook, TikTok, Pinterest etc.) to begin. You don’t want to overwhelm yourself right out of the gate; also consider using automation software, like Tailwind, to save time on social media.
In this step, don’t forget to plan out your marketing strategy. This is what’s gonna spread awareness about your new business, get the word out to your audience, and bring you those sales!
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3. Cover your a**
Decide on a legal structure for your business, get a free EIN, start a business bank account (most are free; I use Bluevine), and register your business with your chosen state. This part can seem a little tedious, but it’s 100% necessary to make sure your business will last. Don’t forget to apply for any licenses or permits that you might need, and if you’re offering any services—think about contracts!
While it’s easy to get a free EIN for your business, and it’s also free to file with your state, it can be a hassle and a little confusing to know how to fully register your new business. One thing to keep in mind, is what address you’ll use as a Registered Agent.
There are a few requirements for this, so make sure to really do your research, but definitely think about using a Registered Agent Service! This is a virtual address given to your business to file your entity under and receive official mail. This is great for solopreneurs who operate business from home or out-of-office, and don’t want their personal address shown publicly.
PRO TIP: Register your domain ASAP
PURCHASE YOUR DOMAIN AND HOSTING BEFORE YOU DO ANYTHING ELSE, SO YOU CAN SET UP A BUSINESS EMAIL ADDRESS.
Use your official email address, which comes from your website domain name, to do many important things (aka. everything), like set up your banking, file paperwork, create accounts, and authenticate your website. (And honestly, so much more.)
I use Siteground and Bluehost 💙 for domain and hosting, and use Google Workspace for custom domain emails and everything administrative.
Consider using services like Legal Zoom or ZenBusiness to expedite your filing process. I filed my first 3 LLC’s on my own, and while I could definitely handle it, I welcomed the frictionless process of filing for my S-Corp with LegalZoom.
They made sure I had all the bases covered, including EIN, registered agent, filing, incorporating, licenses and permits, insurance, and a CPA service which included Quickbooks. That process was way faster than doing it on my own, and way less of a confusing headache. They even included free consultations with a lawyer and a CPA, and sent me a fancy binder that holds all the official documents and has my biz name embossed in gold!
(I’m extra, so I loved that part…)
For any contracts you might need, I’ve found Honeybook to be an amazing resource. And if you’re planning on offering courses, you should definitely consider using Thinkific as your platform, since they have contracts pre-built into their system.
Whether you use a filing service or not, make sure to get some accounting software (like Quickbooks), to easily track your expenses and take the headache out of doing taxes... and always, always get a separate bank account.
4. Develop
You’ll want to keep your business’s dealings and finances totally separate from your personal banking, which will save you time as you grow and during tax season. All your business needs to start a free biz checking account (I use BlueVine) is an EIN, which is free and super easy to get, and an official business email. Keeping all your accounts, dealings, and interactions under this professional email will streamline your processes and organize your business dealings better.
If you did your due diligence during the business plan phase of this process, then you’ll know if you plan on needing extra funding, and the best way to go about this is to immediately start building a PAYDEX score. This is the equivalent of a business credit score, and will determine your approval rate for any loans or funding you plan on applying for… and they aren’t easy to get.
You’ll have to apply for a free D.U.N.S. Number with Dun & Bradstreet to start the process, make sure to register your phone number with 411, and create a business listing on search engines like Google. From there, you have to get at least 3 business credit cards and 5 vendor accounts (yes, it’s this complicated) to even get a score! And your score takes a while to build from there.
If you’re looking for funding for your business, it might be easier to get a personal loan, or use a service like Nav. I’m obsessed with monitoring my credit, so when I found out it does that for your business, I was sold. This app is amazing and will tell you everything you need to know to stay on top of your business’s credit, finances, and future funding possibilities.
Once you get your money situation figured out, develop your products or services and set up your website or online store! This part should go relatively quickly… if the plans you’ve created in the first steps are detailed enough.
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5. Market
So you're all set up online... now what?
Start creating your content and planning out your social media and content calendar. Automate it ahead of time for consistency and success. Set up other automations and special workflows that take the busy-work out of being a CEO.
Consider setting up emails ahead of time that automatically send your customers newsletters, thank you‘s, delivery updates, helpful resources and more—so that you can cultivate a relationship with your supporters and free up time to take care of other important tasks. This will also create a loyal relationship that has followers always referring you to friends and coming back for more.
Content creation can seem like a huge task in the beginning— especially if you’re not a huge fan of social media (I wasn’t)… but keeping a steady stream of content flowing to your followers establishes you as an expert in your field and creates a sense of trust.
Once you’ve gotten the hang of social media and start to see steady growth, consider scaling your business with ads. It’s a lot easier than it seems, and a well-placed and properly written ad can shoot your business’s success straight to the moon if it’s done correctly.
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Bonus #1: Develop your CEO Mindset.
As you can see, starting and running a business is not easy, and the only way to make it last long enough to do well is to ”have the right mindset.”
But we hear this all the time, and it’s gotten too redundant to really make a point.
Think about it like this; winning in any business can be summed up in the following famous story from history:
THREE FEET FROM GOLD
There’s a famous story of a young man who joined the California gold rush looking to get lucky, find gold, and strike it rich. He worked for months without finding anything, and finally gave up. He sold is equipment to a local ‘junker’ and went on his way…
Then another hopeful came along to the same spot the first man had been mining, continued working on his site… and three feet into that hole, this man found a huge deposit of golden ore that surely struck him rich!
The moral? Never stop chipping away at your goals, no matter your doubts, or how unlikely it may seem. Keep going… you may just be three feet from gold.
Regardless of the specifics, you will struggle, so it’s important to cultivate a resolve in yourself that can handle it. Do this by reading good books, listening to audios and podcasts, getting a mentor, or even with meditation.
🛡️ It’s time to armor up!
The most important thing you will ever work on is yourself, and the rest will follow. You’ll be surprised to discover the amazing success that comes when you invest in yourself.
Drop your name + email to get your FREE download of our Total Business Startup Checklist, which outlines every tiny little step you need to take before you launch your dream biz!Bonus #2: Use Tools to Cut Down Your Workload…
The best thing about 2023 (for your business) is technology.
There is so much out there that can take the mountain of tasks you gain as an entrepreneur, and cut them in half—or better!
Use a service like LegalZoom to streamline your state filings and official setup, from insurance to accounting. Use Quickbooks to take the nightmare out of taxes. Use Nav to help grow your business’s credit score and plan for your financial future.
Take advantage of software like HubSpot to organize your CRM and marketing efforts, or Tailwind to automate your entire social media strategy!
There are tons of resources and tools out there to help make your CEO life easier. It’s just a matter of knowing your options! Check out our Helpful Resources Library to find a comprehensive list of all the tools we recommend, offer here, or use ourselves.
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Happy Building!
The best thing you can do for yourself is take the time to get the legal stuff out of the way before you start building your business.
It’s not fun, but it will save you time and money in the long run. The sooner you start working on these things, the less stressful it will be later when things get hectic (and they will lol).
STAY IN THE LOOP
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As I’m sure you might know already, starting and maintaining a successful business—more than anything—is a complicated journey full of reroutes, twists, and turns. So from the bottom of my heart, thank you so much for being a part of this wild journey with me… the most important part! <3
Stay hungry, my friends. 🍟
-Coco
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MEET COCO
An ex starving artist and 13-year-bartender who finally decided to take a huge leap of faith, she opened her first business in 2020. Through a series of false-starts and what some would call failures, Coco learned how to finally get it right, and now coaches other business owners and hopeful entrepreneurs in the vast world of online business.
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