Editor's Note
03.06.01

Today's issue is by Chris Malta. Yes, the same Chris Malta who has
taught us quite a bit about drop shipping. Thank You Chris!

Today, he writes about starting an Internet business. I know that
this is an international newsletter, but Chris has covered this
point from the U.S. perspective. It would be extremely difficult
to do this with every single country, but here is a start. Perhaps
our international friends can find this particular issue useful
in case they want to start a business in the U.S. in order to
help their business in their own respective country. I don't know,
I'm just grasping for words to make this issue useful for everyone.

Anyway, I hope that you enjoy this article,

How To Start a Successful Internet Business

That's not surprising. It can be confusing, and there are certain
steps to be taken in a certain order. Without help, you can end up
running in virtual circles for weeks.

Now, please keep this in mind, folks; I'm not an attorney, and I'd
rather not have to hire one after writing this article. Let me
just say that this is how it works where I live. Your local
government may do things a bit differently, and of course I
can't speak to this issue for those outside the US. (Sorry!)
If you need to, consult an attorney or accountant. You should,
though, be able to do this pretty easily on your own if you
choose.

First, swim to the poolside bar and grab yourself a nice cold
drink. Then--oops, sorry, that's AFTER work!

Seriously, now, there are six things you would need in Florida
to get started. It works pretty similarly around the rest of the
US.

1.) File your Business Entity

You need a "business entity." That just means you need an official
business name that's recognized by the government. You can do this
one of two ways.

A.) Corporation: You can file a corporation with your State.
Florida has a web site at www.sunbiz.org, where we can download
and print all the forms we need to file a Florida corporation. I
believe that all States in the US have a site like this. They
also have instructional forms that detail what goes where, and
what everything means on the forms. Once we complete our forms,
we mail them in with about $90, and poof-we're a corporation!
We get our official copies back in a couple of weeks.

B.) Fictitious Name: This is a simpler way to register your
business, but it does not afford you the protections that a corp
does. Same thing-in Florida, sunbiz.org has the forms, and we
fill them out and send them in. This doesn't cost as much as a
corp. In some States, this is called a DBA (Doing Business As),
and is obtained from your local County Office building for a
minimal fee. ($35 would be an average).

If you're not sure which way you want to go, see an attorney or
accountant. This is an important decision!

Once your business entity is registered, you need an EIN
(Employer Identification Number). Go to www.irs.gov for
information on obtaining your EIN. The IRS uses this number
to identify taxpayers who are required to file business tax
returns. There is no charge for this that I know of.

3.) Obtain a Business License

Here in Florida, we are required to have a Business License
issued by the county our business resides in. This takes a couple
of hours at the local County Office Building, and costs about $30.
We must show our Business Entity papers and supply our EIN. In
some other States, a county Business License may not be required.

4.) Obtain a Resale Certificate

In almost every State you are required to have a Tax Resale
Certificate. In Florida, we can get a Resale Certificate in about
20 minutes for $5. We must again show our Business Entity papers.
This is done at the local State Tax Office. When you buy from a
wholesale supplier, you will be asked to supply them with a copy
of this certificate. They use it as proof to the IRS that they
are not required to charge you tax on the products they sell
you at wholesale.

5.) Open a Business Bank Account

If you're going to do business, you must have a business bank
account. You'll need your Business Entity papers, your EIN and
your County Business License, (if required). Here, we can open a
business account for a deposit of $50 to $100. Almost all banks
offer business accounts.

6.) Open a Merchant Account

The last thing you need is a Merchant Account. You'll need
everything you obtained in the five steps above for this one.
(Unless the County Business License is not required in your
State).

This is the thing that allows you to accept credit cards from your
online customers. Without this, you'll get nowhere. Online buyers
are instant gratification junkies. They want it NOW! If they have
to mail you a check, they'll go somewhere else and buy. Merchant
accounts used to cost a thousand dollars and more to set up.
They've come down a LOT. We just opened a new one for a setup fee
of $150. The Merchant Account will collect funds from your
customers' credit cards, and deposit those funds in your business
account. The Merchant Bank will charge you about 2.2% of the
amount you charge your customer's credit card, plus about 30
cents per transaction.

Your Merchant Banker will help you to incorporate your Merchant
Account into your Internet store software.

Well, there it is. That's the business end of an Internet
business. Sound complicated? It isn't, really. The hard part
is waiting for one thing before you can obtain the next!

As I said above, these are just guidelines. If you have
questions, please consult a professional.

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