Here at Legal123 we’re big supporters of online businesses and particularly startups. Unfortunately we see some mistakes being repeated again and again. So here’s a quick 5-point checklist for starting your online business and avoiding some of the most common mistakes:
1. Choose the right business name
You might think you’ve chosen the perfect online business name. But before you fall in love with it, check it is not already taken. Changing your business name mid-startup is an expensive (and avoidable) exercise. Here are the 5 business name databases you need to check:
- Google: Type in your business name to see what comes up, in Australia and overseas. You don’t want to be confused with a competitor or be associated with any unsavoury websites.
- NetRegistry: Check this Australian domain name registry to make sure your potential website is available. Check other extensions such as .com, .net, .org, etc. too and consider buying these to protect yourself from cybersquatting.
- IP Australia: Do a Trademark Search to ensure your business name is not already registered. If someone has already registered your name and is doing a similar business, you cannot use that name. Breaching someone’s trademark by offering similar goods or services under the same name, could result in expensive litigation and re-launching your business.
- ASIC: Search the ASIC registry for both company (“Pty Ltd”) and business (“Trading As”) names.
- Social Media: Lastly, check the social media platforms like Facebook, Twitter, YouTube, etc. using an online tool like NameChk.
Check this article for more details about choosing the perfect business name.
2. Set up as a “Pty Ltd” company
Incorporating as a “Pty Ltd” company is not that expensive these days. But the advantages are huge. If you only have a (“Trading As”) business name and are conducting business as a Sole Trader, you have no protection for your personal assets (e.g. house) in the event of being sued.
So once you’re up and running, consider incorporating a “Pty Ltd” company for full limited protection as soon as possible. Then have comprehensive Terms & Conditions, including a Limitation of Liability clause, on your website and this will go a long way to further protecting your business.
3. Write your business plan
“Failing to plan is planning to fail.” (Alan Lakein) Right? So have a plan. We’re not suggesting a magnum opus, but you need to cover the highlights: target market, products or services, point of differentiation, pricing, online traffic volumes, conversion rates, target sales volume, etc. Then revise the plan frequently as new lessons are learned and experience with your target market increases.
For example, when we first started Legal123 we didn’t realise that the online business market would be the most open to buying legal services online. It makes sense in retrospect, but we have to adjust our product offering as lessons were learnt.
Then make sure you’re meeting your expectations – whether that’s for a part-time business or high flying IPO. Online businesses are a lot of work and you need to know it’s all worth while. Having clear targets for profitability and growth will help you judge this – and keep you focussed on achieving your goals.
4. Learn the guts of your website
There is no way to avoid this – if you run an online business you need to understand how your website (or app) works. We’re not suggesting you become a coding guru – but you do need to know how things go together. If you don’t, you’ll not know how to ask for help and you’ll probably get ripped off.
We’ve seen startups spend literally thousands of dollars on very basic websites – just because they didn’t know how simple it can be to setup a website and some unscrupulous website designers took advantage of them. Sad to see and when the founders discovered their mistake, they felt gutted.
As a startup you have two basic choices: building a website based on the WordPress CMS (Content Management System) or using a fully functional e-commerce platform (e.g. BigCommerce, Etsy, Shopify, etc.). You’ll be able to get started quicker on an e-commerce platform but you might find it has limitations that you wouldn’t get with WordPress.
Which ever way you choose to go, spend the time to research different platforms, learn to code a little and find websites (or apps) you’d like to emulate. And ensure you have website Terms & Conditions that meet Consumer Law requirements. Remember, if you use an e-commerce platform, their Terms protect them and not you.
5. Start outsourcing early
Lastly, get help wherever possible – you cannot do everything and you don’t want to become the bottleneck that stops your online business reaching its full potential. Your time should be spent growing the business, not on the minutiae that may not be the best use of your time. There are great people out there that can probably do it faster and better than you!
You don’t need full-time employees, there are great contractors to hire out there. But you will have to put in a little work to find them. We’re looking for the best-of-the-best here at Legal123 and it’s taken a little time to build our team. So don’t delay, start looking for help early.
So there we go – 5 things to focus on when you’re starting your online business. We’re thrilled to see that some of our ideas about online startups are getting picked up. Flying Solo featured Legal123 here and Project Mum interviewed me.