Posted by Jonathan A. Patterson, CPA, CVA
E-commerce is a rapidly growing area and many individuals are trying to get in on the action. No matter what platform you chose for selling (Amazon, Ebay, Etsy, etc.), there are items that you may not consider or even know about, but must be addressed.
Here are some common things that online businesses often miss when they get started.
- Did you name your business? Not having a name may be a deterrent to buyers, and using your own name causes too much transparency. Be smart about your name choice and make sure it’s not already taken!
- You must select your business structure and register your business. Some types of business structures you can choose from including Sole Proprietor, Partnership, or Corporation. You must register your business in a state after choosing the structure; this task can be complicated and time-consuming.
- You need an Employer Identification Number (EIN). Before you even sign up to sell on many sites, you must have an EIN or else use your Social Security Number.
- Selling online does not exclude you from possibly needing a business license. Also, you may be required to track and remit sales tax in some of the states you are selling in.
- Do you have an accounting system to keep track of your business activity? Picking a system to track sales as well as inventory management is key to any new business, but especially a retailer.
- Make sure you stay compliant! Making money selling online can be a fun and exciting venture, but having a CPA as a trusted advisor to help your new business adhere to the rules is invaluable to your business success.
If you have questions related to setting up an online business or the tax compliance issues involved, contact Belfint, Lyons & Shuman at 302.225.0600 or click here to contact us.