Ultimate Entrepreneur Checklist
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Entrepreneurs starting an online business for the first time can easily become overwhelmed with identifying and selecting one of the many different vendors and software that are needed. Even though there are similarities between the needs of e-commerce businesses and traditional brick-and-mortar operations, online businesses require specific features and capabilities not common for physical stores.
Vendor and Software Checklist for E-Commerce Startups:
Domain Name. A domain name the website address of the e-commerce website. There are many large businesses that offer domains for sale, such as GoDaddy.com and MyDomains.com. When purchasing a domain, it is best to purchase the name for at least three years, as search engines tend to give precedence in their search results to those that are committed to being around for longer than a year. In addition, it is recommended to purchase the domain name ending in “.com” instead of other endings, such as “.net,” as it is easier for customers to remember and they will be least likely to confuse this site with the “.com” site. Purchasing a domain name usually costs between $10 to 12 per year.
Host.
A host is the vendor that will make the website live to everyone around the world by placing the domain on its servers. Provide the host with the domain name, and in return they will send the IP address of their servers. In the admin panel of the website where the domain name was purchased, update the domain with the IP address of the host’s servers so that the website can go live. Hosts range in price from anywhere from $2 to $250 per month, depending on the needs of the business. Find out how to select an e-commerce hosting plan at Selecting an E-Commerce Hosting Plan.
Shopping Cart.
Most hosts provide their customers with shopping cart software that can be readily installed with just a few clicks, while other shopping cart programs must be either installed or registered for through a third-party. There are generally two types of shopping cart systems, ones that can be set up on the business’s website and hosted on its own server or that are subscription-based from a vendor. There are advantages and disadvantages of both types of shopping carts, and a range in price from being completely free to several hundred dollars per month. Learn more about shopping cart software by reading the Guide to E-Commerce Shopping Cart Solutions, How to Select an E-Commerce Shopping Cart and E-Commerce Shopping Cart Software Comparison.
Merchant Account.
A merchant account is a bank account where customer payments will be sent to settle. The merchant account should be compatible with a payment gateway, such as Authorize.net. A merchant account and gateway combination is often cheaper in the long run than third-party solutions, such as PayPal and Google Checkout. To find out more about merchant accounts, read the Merchant Account Guide – Online Merchant Credit Card Processing.
Gateway.
The gateway connects the merchant account with the shopping cart, as well as to the issuing bank of the customer’s credit card. It is vital that the gateway is compatible with the merchant account and the shopping cart software, so ensure it is before moving forward with a contract. Learn more about gateways by reading Merchant Account Payment Processing – How a Gateway Works.
Supplier.
If the e-commerce business will be selling products, then it will need to find suppliers. Ask for samples of the products before making a purchase, verify their customer service hours and ask how long it takes to fulfill and ship orders. In addition, if the business does not want to ship orders to customers itself, find out if the supplier offers drop-ship services so that it will ship the products directly to the final customer.
Fulfillment Center.
For e-commerce businesses that will be selling physical products and does not want to ship orders itself, a fulfillment center is necessary. Fulfillment centers generally provide services in storing inventory, shipping orders, handing returns and customer service. For information on what to look for in a fulfillment center, read this Guide for Choosing an E-Commerce Fulfillment Center.
Accounting Software.
A good accounting software does not only assist a business when it comes to tax time, but it provides the business with its financial, inventory and vendor standings with just a simple click of a button. Businesses can even have information from their shopping cart software, credit card statements and bank statement automatically import appropriate into their accounting software – making record keeping more efficient and convenient. The most popular accounting software is Quickbooks. Find out why by reading Online Accounting Software: Quickbooks Small Business Software.
Date Management:
With all of the new guiudelines, keeping track of and safely storing key data assets, such as product data, asset data, customer data, location data, etc. is incredibly important. The need for accurate, timely information is acute and as sources of data increase, managing it consistently and keeping data definitions up to date so all parts of a business use the same information is a never ending challenge. This is where a program like Profisee comes into play: with their master data management best practices.
Fictitious Name.
Protect the business name by registering it appropriately within the state of operation. Ensure that the name is not currently taken by using the state’s online tools to research. If the name is not currently in use, the business can apply for the fictitious name and pay an annual fee. Some states require businesses to register a fictitious name if the business is not a corporation and it is a name other than the proprietor’s name.
Legal Structure and Tax ID.
Determine if the business will be a sole proprietorship, partnership or corporation. Research the laws of the state the business will be operating from and register the business appropriately. In addition, it is very important that businesses other than a sole proprietorships to register for a Tax ID on the IRS.gov website before conducting business.
Starting an E-Commerce Business
While these are just the basic needs of a small business, there are could be many more depending on the industry of business. Some e-commerce businesses may need specific technologies integrated within their e-commerce shopping carts, such as the ability for customers to customize products or download their purchase immediately after payment. Research the major competitors to see how they operate and the technology they use in order to be competitive.
However, no matter the industry, most small e-commerce businesses will need a domain name, hosting account, shopping cart software, merchant account, gateway, suppliers, fulfillment center and accounting software. In addition, before opening their virtual doors for customers, they may have to apply for a fictitious name and register the business within the state of operations. Also, do not forget to register for a Tax ID if the business is not a sole proprietorship.
