Do you have a business idea with the potential to trade online? This guide explains how to get your online business started.
Trading online can involve selling a product or service or offering an online booking platform. How you trade online will depend on your business offering, so some of these steps may not be relevant to everyone.
In the beginning, you may consider starting an online business at the same time as working a full-time job, so it’s important that you’re aware of your obligations as a business owner.
1) Decide how you want to sell online
Will you set up your own website, use a reseller platform like Amazon or eBay, or a mixture of online sales and offline sales?
Consider writing a business plan and researching what option is best for you. Writing a business plan will help you narrow your target audience and determine what your customers expect from your site. You should ensure you can meet your customer’s expectations.
Shopify and Squarespace offer templates for new e-commerce businesses. They’re easy to use and easy to manage. There are also great tools online that help you manage your client’s expectations. For example, if you want your clients to book meetings with you, Calendly is a great online platform to manage your appointments.
If you operate your business remotely, consider establishing a virtual business address in Ireland. This can enhance your business’s professional image and streamline correspondence.
2) Sole Trader or Limited Company
Starting an online business means officially registering with Revenue and the Companies Registration Office (CRO).
Decide what business structure you want to be in – Sole Trader or Limited Company? There are advantages and disadvantages to both business types.
In general, Sole Traders take on more risk than Limited Companies. Sole Traders are personally liable for the business’s debts; therefore, you may need to sell off personal assets to repay debts.
On the other hand, you should also consider the pros and cons of a Limited Company, as it might be the right option because the registration process creates a separate legal entity. This provides more security for you as you have limited liability as a company.
When setting up a Limited Company, you may also need to obtain a company seal. A company seal is used to authenticate important legal documents, ensuring compliance with Irish regulations.
3) Build your brand, website, and social media presence
Starting an online business means you need an online presence to stand out from your competitors.
There are many different agencies and consultancies you can use to help you build your brand if you don’t have experience. Website design, search engine optimisation, branding, digital marketing, and user experience are all areas you can hire experts in.
4) Focus on your analytics
Starting an online business means you can use software like Google Analytics to track the success of your website.
Visitors, conversions, and average order value per customer are all interesting statistics that can help you understand your business.
Online e-commerce platforms like Shopify have ready-made reports on their platforms. Google Analytics also offers online courses to learn how to analyse your online business.
5) Set up your taxes properly
As a business owner, you need to ensure your business is tax registered.
Sole Traders need to register for Income Tax, and Limited Companies need to register for Corporation Tax. This needs to be done before your business starts to invoice clients.
Other taxes you must consider registering for include: Value Added Tax (VAT) and Pay As You Earn (PAYE).
If your business is applying for VAT, you should know how to charge VAT. There are different guidelines depending on what you are selling and to whom. So, always seek professional advice before you register for VAT.
6) Know what expenses you can claim
Claiming tax-deductible business expenses reduces the tax you pay at the end of the year.
The expenses you claim must be wholly and exclusively for the purpose of the business so it’s important you know which expenses qualify. For example, you can claim many expenses if you are working from a home office.
You should keep track of all your expenses and finances so you don’t overpay on your tax bill. Using online accounting software will greatly help you reduce the administration time of recording and maintaining business records.
While embarking on an online business journey is exciting, it’s also prudent for entrepreneurs to be aware of how to close a limited company in Ireland, ensuring they’re equipped for all phases of the business lifecycle.
Ready to set up your online business?
If you’re ready to take the next step to set up your online business, get in touch with our Client Services Team. We can discuss what you must do to register with the appropriate authorities.
Ensure you get set up correctly with our Company Formation Service.
We take care of everything you need so you have time to focus on getting your website, suppliers, and analytics for your online business.
Tom is a Fellow Chartered Certified Accountant (FCCA) and Chartered Tax Advisor (CTA) and is the Head of Accounting at Kinore. Areas of expertise include Accounting, Compliance, Taxation relating to small business and company directors.
