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Store Management Tips for Busy Entrepreneurs

It’s obvious that running an online shop is a full-time job. However, taking the time to streamline your store management and develop systems can help you make more time, reduce stress and increase revenue. Amazingly, all this without endless to-do lists or sticky notes reminders on your desk.

These are some simple store management hacks and tools that will increase your efficiency and work to your benefit:

Before they ask, answer questions

It is important to not leave potential customers hanging. Instead of monitoring live chat and checking email constantly, you can be proactive and address frequently-asked questions before they are too late.

FAQ page can be your first line defense against unwanted phone calls and emails. It also creates a more user-friendly environment. For more complicated topics, informational blog posts can be a great idea. These could include product and service descriptions as well as software tutorials and return policies. When appropriate, you can link FAQ topics to your blog content.

This helps to keep buyers away from any questions. Customers are more likely to purchase if they can find the answers to their questions easily.

Your store dashboard allows you to manage payments and refunds

WooCommerce payments is an excellent time-saver because you can manage refunds and payments right from your WordPress dashboard. Instead of logging in and out of multiple accounts you can manage your business finances from the same place you handle products, analytics, and other things.

It’s also a great tool to improve your checkout experience. Instead of having to redirect customers to a third party payment gateway, customers can pay directly from your website. You can also accept multiple currencies.

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Streamline your inventory management

Inventory management is a time-consuming task that can make running a business difficult. Automating the inventory update process is better than manually updating your warehouse or physical location inventory.

Scanventory or Square can help you organize your inventory management. It is possible to generate labels and print reports or update inventory in bulk, rather than one item at a given time.

Inventory management is the most important thing that can stop a store from growing. You can forget about those worries if you have the right tools.

One click to print shipping labels

Ever wonder how certain stores can charge such low shipping costs? They’re likely not paying full price.

WooCommerce Shipping allows you to print labels right from your dashboard, saving you tons of time and money. You can save up to 67% when you order domestic or international shipping at specially-negotiated rates with USPS and DHL.

Drop off your prepaid packages quickly without waiting in line at the postoffice. Or have them delivered right to your home by USPS.

Automate emails

Transactional emails can be used to notify customers that their order has been received, shipped or delayed. WooCommerce offers a set of default orders which automatically go to each customer. You can also include tracking information with an extension.

You can take things one step further and create additional automated emails. WooCommerce Order status Manager allows you to create new orders and then send emails as each step is completed. If you make wooden furniture by hand, you might add steps for “assembling” or “staining.” This will keep customers informed and allows them to send emails when each step is completed.

To customize transactional email messages to your brand specifications, you can use tools such as MailPoet and send marketing messages such as abandoned cart emails or newsletters.

Batch social media and blog content

It is amazing how your mind can go blank when you are asked to post on social networks. You can either quit posting or settle with a less-than-stellar plan.

Scheduling posts ahead of time helps you maintain a work-life balance, and lets you take advantage of the creative times. It’s OK if you have multiple ideas for the same thing, such as a customer review that uses a similar image. You can create as many as possible and then spread them over time.

Keep in mind that each post will only be seen by a small portion of your social media followers. If enough time has passed between posts, you can reshare them.

Repurposing content from different marketing channels might be an option. For example, let’s say you have a blog about a product or service you are promoting. You can modify something you have already written about the topic to suit your different channels. Your clever tweet was a hit with your followers. It can be shared on Facebook and turned into an Instagram image. You don’t have to create new content if you already have great content.

Comment spam must be eliminated

While enabling comments on your site can be a great way of building community engagement, it is likely to encourage spam. However, this doesn’t mean that you have to manually manage spam. With tools such as JetpackAnti-spam, you can stay two steps ahead.

It’s not only time-consuming, but it can also be risky. Spammers can be sneaky and you might not be able to identify a fake. Jetpack Antispam is a program that learns from millions and recognizes the signs of spam. It can eliminate comment spam before you have even seen it.

This will save you time and improve your customer experience.

Everything you need to know about cloud ERP and Ecommerce

One wise (and unidentified) man is quoted as saying that “I won’t be impressed by technology until I can download foods from the internet.”

Maybe that day will come, but for now we can order almost everything online.

However, businesses that hadn’t made the decision to do so were forced to reconsider their decision after the COVID-19 crisis. Ecommerce is not a future option, but a necessity for survival.

Statista estimates that retail ecommerce revenues reached 431 billion U.S. Dollars in 2020, according to Statista . The revenue is expected to rise to more than 563 billion U.S. Dollars by 2025. How can ecommerce companies manage the extraordinary growth and meet higher-than-ever customer demands?

IDC is a leading global market intelligence company. It has released a white paper, Best Together: SaaS Digital Commerce Platforms & ERP Help Organizations Move Past Legacy Limitations. This whitepaper states that the solution lies in a combination team effort and the right technology.

The IDC analysts wrote that meeting customer expectations requires team effort. This is dependent on all areas of the organization (e.g. commerce, customer service and financials, supply chain).

The analysts recommend that businesses invest in a cloud ERP and digital commerce system, such as the native Acumatica BigCommerce Connector, to ensure they grow and mature into enterprise-level companies.

Before we get into the details of this seamless solution, let’s first talk about what cloud ERP software actually is.

What is Cloud ERP?

Understanding cloud computing is key to understanding cloud ERP solutions. An Microsoft Azure article gives a clear definition.

Cloud computing simply means that computing services are delivered over the internet (or “the cloud”), including servers, storage, databases and software. This allows for faster innovation and flexible resources as well as economies of scale. Cloud services are typically only charged for what you use. This helps you to lower operating costs, scale your infrastructure more efficiently, and reduce your overheads.

Cloud ERP software, then, is software-as-a-service (SaaS) that allows users to access Enterprise Resource Planning (ERP) software over an internet connection. A cloud-based ERP system acts as an organizational system of record. Data from financial, distribution, CRM, etc. The ERP synchronizes data from all systems in real time. The ERP is a central repository for all business data. It integrates business processes and serves as an “unique source of truth” for employees. Users can also access the ERP from any device with a browser, and at any time.

A general rule of thumb is that if a company is still using a legacy system or multiple disconnected, poorly integrated systems to manage complex inventory, warehouses and financial obligations, it is time to move to a cloud-based ERP solution.

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Cloud ERP vs Private Cloud ERP

Understanding private cloud ERP is essential to fully comprehend cloud ERP solutions. Let’s take a look at both options.

1. Cloud ERP.

As we know, cloud ERP options allow users to access their business applications via the internet. They run on shared computing resources. Cloud ERP options allow users to easily integrate with third-party apps while still providing the flexibility and scalability that businesses require in a dynamic economy. Cloud ERP vendors are responsible for security, updates, as well as upgrades. Businesses pay a monthly subscription fee depending on how many users or resources they use.

2. Private Cloud ERP.

The only difference between private and cloud ERP systems is the location of the software. The software is installed and maintained at the business’s own facilities. Only the IT department of an organization is responsible for software deployment and the maintenance and security of software and hardware. The initial costs of software licenses and hardware may be prohibitive. Remote access is possible but not always an integrated function. It may be necessary to use a third-party app and device.

Private Cloud ERP: Challenges

All ERP options have their unique challenges, but private cloud ERP challenges are something businesses, particularly small-to-medium-sized businesses (SMBs), should pay attention to.

Private cloud ERP solutions may be more expensive to implement and maintain, with a higher capital investment upfront. Businesses must have a full-time IT staff. Private cloud solutions can take longer to deploy, may require more hardware to accommodate additional users, and may not be mobile-friendly.

Private cloud ERP solutions often have legacy systems that are not modernly integrated. Customers suffer as a consequence.

What makes cloud ERP business sense for an online store?

We now have a better understanding of the differences and challenges in the various ERP solutions, it is time to bring ecommerce into the picture.

Ecommerce platforms are essential for putting their products/services before customers. An ecommerce portal allows online businesses to manage sales, marketing and operations.

According to IDC’s Whitepaper, whichever ecommerce platform businesses choose, it must combine seamlessly and natively with an ERP solution–preferably, a cloud ERP solution.

Analysts at IDC write that the most successful digital businesses have an overarching strategy for digital transformation and select ERP and digital commerce systems that can be tightly integrated or combined. A future-proof digital platform must use modern SaaS systems designed for the cloud.

An online store that uses cloud ERP solutions makes business sense is always a good idea.

Cloud ERP for Ecommerce: Benefits

Cloud ERP solutions are often faster to implement, have lower upfront costs and allow for real-time communication with ecommerce platforms. Businesses can also benefit from cloud ERP solutions that include an ecommerce vertical such as Acumatica’s retail-commerce edition.

1. Flexibility and adaptability.

Flexibility in the face of market fluctuations is a key indicator of a company’s success. Businesses can easily make required customizations with the right cloud ERP system, without having to hire IT staff. They can adapt their back-office processes and workflows as well as their customer-facing apps to change circumstances.

Each merchant also operates in a unique way. Each merchant operates in a unique way. The right cloud ERP solution can be configured and used without code to adapt to merchant’s unique requirements, instead of forcing them to use the ERP software.

2. 2. Improved security

Cloud-based ERP software can be hosted in data centers such as Amazon Web Services and Microsoft Azure. They have the resources that SMBs might not have, including top-notch security. A cloud hosting service offers many benefits:

  • Physical access to the equipment can be controlled.
  • Environmental protection.
  • Protection against unforeseen disasters.
  • Network intrusion detection and prevention.
  • Regular maintenance of your system.

3. Business growth can be sustained

Businesses expect their business management software to grow along with them as they grow. However, this is not always possible. It is difficult for legacy solutions to keep up with technological innovations that are constantly changing.

Cloud-based solutions receive regular updates and upgrades. These updates allow ecommerce businesses remain competitive and provide the opportunity for continued growth.

4. Compatible with many tools

No matter what business offers or what services it sells, integration with key business applications is essential. Acumatica has the technology partner to help a business expand Acumatica’s platform.

BigCommerce allows Acumatica businesses to process orders, manage inventory and set prices. It also facilitates inbound logistics.

Steps to Cloud ERP Implementation

Connecting an ERP cloud solution to an ecommerce platform may sound like a smart decision. There are few steps you need to follow when choosing or implementing a cloud ERP system. While cloud ERP providers might differ in the number of steps and the names of the steps, the end result is the exact same: ecommerce success.

1. 1.

Ecommerce businesses need to take the time and research all options. While it may take time to compare and contrast the various cloud ERP systems available today, rushing this step could result in making a bad decision.

A checklist such as Acumatica’s Business Management System Evaluator Checklist is a great way to evaluate and research options. It allows businesses to compare features and benefits between vendors based upon five categories: Productivity (functionality), Technology (value), and risk.

This checklist, or any similar one, will help businesses to find the right cloud ERP system.

2. Installation.

The second step is to install the software. To complete the installation, you will need to first gather an internal team. This team often includes an Executive Sponsor, a Project Leader (or Project Manager), a technical Lead and Subject Matter Experts.

This step requires you to identify your requirements. Acumatica customers classify requirements as necessary, desirable, not an urgent need, and nice-to-have. This results in a list with features and functions that is affordable and fits the project’s timeline.

3. Migration.

Migration of data from an old system to a new one is complex. However, a checklist can make it easier and more manageable. Acumatica’s data migration checklist is an example.

  • Verify that all customer contact information is current and accurate
  • Correct or remove redundant data (discontinued vendors and contacts not longer associated with the company).
  • Correct or out-of date company data (old part numbers and discontinued products) should be removed
  • Set up your Acumatica database
  • Your legacy ERP data can be mapped to Acumatica’s new fields
  • Transfer the data to your new system
  • To verify that all data from the past has been transferred and is still accessible, test the new system
  • Verify that new data can be added (new product information or inventory item location, customer information).

4. Test.

It is important to test and approve any new product before it is sold to customers. While cloud ERP vendors may have their own procedures and methods for creating a test plan to test the system, most test plans will be able to test every requirement.

These are some guidelines that may be followed during testing:

  • Scope: The purpose of the test
  • Requirement: The specific requirement that is being tested
  • Configuration: System configurations required to conduct the test
  • Step-by-step procedure to perform the test
  • Test Data: An SME can provide this if needed. The test data should be representative of real-world situations
  • Expected Results: The results that are expected to be produced when the system performs according to specifications
  • Pass or fail: This determines whether the test was passed.
  • Comment: Additional observations, system behavior and partial successes
  • Training

Training is an essential step. Users and system administrators who aren’t properly trained from the start may not fully grasp the benefits of the cloud ERP system.

A cloud ERP vendor should offer training assistance, as well as all the documentation and training courses required for a complete training experience.

5. 5.

The deployment is also known as “go-live” and is when the cloud ERP vendor will be available to push the go-live button.

This step involves making the decision about when you want to go live. This usually happens on the day or days that have the lowest impact on the business. Businesses will then need to decide whether they want the new system activated and deactivated simultaneously. Or if they prefer to proceed in a gradual manner.

Whatever activation method you choose, the final result will be a business that uses a mobile cloud ERP system. But there’s more.

6. 6.

After the excitement of a successful launch, there will always be questions or additional assistance. This could include the need to integrate with custom and third-party applications. As the business refines their business processes, and continues to require support, the cloud ERP provider should always be available.

Wrapping up

Ecommerce businesses are enjoying a boom economy, and they expect even more growth in the future. These businesses need to be efficient, flexible and adaptable in order to reap the full benefits of an economy like this. This is possible when they choose the right cloud ERP solution, which natively integrates with their ecommerce platform.

Analysts at IDC write that “Already at an unprecedented high, the rate for change in the global economic system is expected to continue increasing over the next decade.” B2B and B2C merchants require modern, tightly integrated front-office and back office applications to adapt to these changes and remain competitive. These tightly integrated applications offer resilience so merchants can overcome obstacles with agility, rather than waiting for their systems catch up.

Combining the forces of BigCommerce with Acumatica will provide much-needed automation for ecommerce businesses. This will help them streamline their business processes, compete in a growing domestic market, and ultimately succeed in today’s marketplace.

Inside Gildan’s Digital Transformation for B2B Ecommerce

Started in 1946 in Montreal, Canada as a children’s apparel manufacturing company, Gildan has gone on to become one of the world’s leading vertically-integrated manufacturers of apparel, socks and legwear.

Gildan is well-known for the high quality of its products but it is also known for its program for social, environmental, and governance (ESG). Because of its long history of ethical manufacturing practices and sustainable production, Gildan was named one the ” 100 Most Sustainable Companies” by The Wall Street Journal for 2020.

The company’s portfolio includes brands such as American Apparel, GOLDTOE and others. Gildan also has a Board of Decorators website. This is an inspiring community of decorators, created by and for decorators. Recently, Gildan combined six sites into one and launched wholesale website gildanbrands.com.

We sat down with Kees Olthof (senior manager for consumer experience at Gildan) to learn more about the company’s ecommerce journey.

Interview Gildan on B2B Ecommerce Growth

How much is your business direct-to consumers (DTC) and business-to business (B2B), respectively?

Kees Olthof : “I would suggest that the majority of wholesale is B2B. DTC is for us a sales channel but it’s so much more. DTC allows us to interact directly with our customers, which allows us to be more customer-centric. The DTC websites allow us to have complete control over our brand and the customer experience.

What was it that motivated you to make the switch from paper to an online catalogue for wholesale?

KO “As a brand we realized that paper catalogues were an obsolete medium. They only allow us to interact with customers in one dimension. We realized that an online catalog could offer a richer and more interactive experience. This was what drove us to move from a printed catalog and go online. It was also part of our sustainability program because it has been a great way for us to save paper while continuing to reduce our carbon footprint.”

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What are you doing to grow your B2B ecommerce business and make the switch to BigCommerce?

KO “We’ve been in B2B ecommerce for more than 15 years. However, we used legacy systems that could only be accessed by very large clients. We were not able to use certain capabilities, and it was extremely expensive to maintain. It was not perfect, but it worked.

“We needed an ecommerce platform that met all our requirements when we compared different platforms. We needed to consider the following: culture fit, product roadmap, total costs of ownership, business requirements. Are we able to see ourselves working with this company for the long-term?

BigCommerce was a state of the art platform that could create a better customer experience and scale globally. That was crucial. The best part is the low cost. That’s why we switched from legacy systems to BigCommerce.

What features are necessary for product fit on an ecommerce platform B2B?

KO “In our case what we really appreciated is the API-first approach. BigCommerce was the core of our ecommerce system . However, it is not a one-size fits all solution. Your ability to seamlessly integrate with other solutions was a great asset.

Could you tell me more about your mobile app and the way you use it?

KO “The mobile app was originally designed to be an inventory finder. Although customers could search inventory online, it is much easier to use a mobile phone if they’re on the move or have someone at their store. The app will tell customers where the distributors are closest to them based on their location. They can then use the app from there to call, email, or request the product.

“Now, there are so many more things you can do with an application, we’re expanding its function to include a swatch scanning option. Customers can scan one of our swatch card with all the colors and fabrics using their smartphone’s camera and find out which styles are available.

“Previously, customers had to consult a table in order to determine the available colors. This feature is something that customers have requested for a long time and it’s one we are excited about.

How do you create a seamless customer experience with all of these sites?

KO. “Returning to your question, BigCommerce was chosen to be the foundation of our digital ecosystem. It houses our DTC retail websites, B2B brands sites, Board of Decorators website, and mobile app. These initiatives should not be separated, but have one experience. BigCommerce is that back-end.

BigCommerce stores all our product information. This means that customers can search on both the website and the mobile app the same way. It’s easier for our internal team to innovate and maintain with one platform that covers every channel.

“Basically, BigCommerce allows us to connect these initiatives in a way that we couldn’t before. No matter where you are on your customer journey, you’ll still receive the same seamless, smooth experience.

Are there any DTC best practices you would like to include on your wholesale B2B site?

KO “We are integrating social media onto the site, so that you can see user-generated content. Social proof is still relevant to B2B, taking a cue from consumer websites. Many DTC practices are beginning to gain acceptance in B2B. We believe there are many important lessons to be learned, even though not all DTC practices work the same.

“We also want to have more two-way conversations, which is something we can’t do in print. Customers can leave feedback via the website whenever they wish. In our FAQ section, for example, it asks if this question was helpful. “Yes or no?”

What advice or suggestions would you offer other B2B businesses going through a digital transformation process?

KO “I would tell any B2B company that when you move your business online, take advantage of the opportunity to be more data-driven. This is something that you can do online, but not offline.

Quantitative data refers to the “what” you can gain from your web analytics. The qualitative data, on the other hand is the “why” that you can get from your web analytics. This can be learned through onsite surveys and feedback. Next, shift your culture to open-mindedness and validate your assumptions.

“Also make sure everyone in your company has access to the wealth of data you collect through online interactions. This could be on your website, social channels, or mobile apps. These insights should be shared beyond your digital team to help you make business decisions.

“I believe that this is key for any manufacturer, because first-party information is something you don’t always possess without direct access to customers. These direct customer insights are crucial for any manufacturer in order to optimize processes and create better products.

Start your B2B Ecommerce Solution with BigCommerce

Are you ready to make the leap and sell online using a B2B eCommerce platform that will help you succeed? Check out . All the features necessary to simplify B2B selling will be found here.

How your Product Catalog is Key to Success in Social Commerce

Millions of people use Facebook every day to connect with their family and friends around the world. However, these social commerce platforms are now powerful sales channels.

The new social commerce is a way to increase sales and reach new customers. It allows them to buy directly from these channels. This allows consumers to move easily between channels, making it imperative that they have access to high-quality catalogs.

It not only helps to drive buyer interest and discovery but also makes it easier for them to consider your product. The first impression of your item is its title and description.

If the products in your Instagram Shops and Facebook pages are in stock, customers will feel more comfortable and have more trust in you. Merchants must have a quality product catalog in order to reach more customers and drive more sales.

If you don’t have a Facebook or Instagram account, this is how to connect.

What’s a product catalogue and why is it so important?

A catalog contains information about products that you sell on Facebook and Instagram. Your catalog data quality is key to creating positive shopping experiences in Shops and ads.

Customers will be able to find your products and make better purchasing decisions if your catalog quality is optimized.

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The benefits of a high quality catalog:

  • Increase your search engine results: The quality of your product directly affects the chances of it being found and allowing you to get more distribution.
  • Drive conversions It is essential that your website and catalog are consistent. Shoppers expect seamless experiences across channels. However, visuals and product information can be added to your catalog to ensure that buyers are able to find the right product information for their needs.

Best Practices

Merchants have a lot of opportunities through Facebook For BigCommerce. They need to be strategic in creating the best content that converts.

These are our top tips and best practices to make your brand stand out.

1. Use detailed product information.

Customers will be able to find your product by using category-specific attributes. They also enhance the customer experience and increase conversion rates. Different attributes serve different purposes:

  • Discovery These attributes are not directly displayed on your product detail page (PDP), but they help buyers find your product through search. These attributes include brand, gender and age group.
  • Variants – Provide variant attributes for products that have a variation. Color, size and material are just a few examples. Find out more about variants on page 2.
  • Consideration These attributes are listed on product detail pages as variant selectors. They help buyers to consider purchasing your product.

2. You can manage product variants in the catalog.

Variants are variations on the same product that you have in your catalog. For example, a T-shirt with the same size and color in different sizes. Customers will have a better experience shopping for your products when you properly set up variants in your catalog.

You can add variants to:

  • Help customers to find more colors and sizes of a product.
  • Give people more options by showing one version of each product in your shop. People can view the variants of the product they are interested in when they select it to learn more.

3. Keep your catalog current.

To use product tags on Instagram you will need a product catalogue. A robust catalog can make it easier to be successful. Consider the viewpoint of the customer. They will see your post and want to know more. They will see the product tag, and then move to the product detail page.

When updating your catalog, here are some important points to remember:

  • Inventory – Only products that have inventory can be sold. You can sell products by updating your catalog with exact inventory counts. This will allow you to know when items sell and what product categories codes are required for taxes.
  • Product names – Keep product names short and consistent with your Instagram website so that shoppers can easily find out how to use a product.
  • Product descriptions – Include the item description. This includes length, material, and size considerations. Don’t forget to include conversions for sizes that are not available in the US.
  • Sizing – For products that require sizing consideration, ensure details are accurate. Make sure you have enough inventory to cover all sizes of a product. For more information, see here.
  • Pricing – Make sure your price is correct and in line with your website.
  • Shipping Fees You can set different shipping fees, including minimum shipping charges at different service levels. In your Commerce Manager settings, you can set your shipping options.

Pro Tip: If there are not enough images or videos on a product page, shoppers will be unable to make a decision. Make sure you have at least two photographs of the product.

4. Be sure to use product tags often.

130,000,000 people click on product tags every month to find out more about brands they’re following on Instagram. Product tags allow you to highlight products from BigCommerce and provide information for customers.

Product tags are essential to give shoppers an easy way not only to find your brand but also to make it easy for them to purchase. You should make product tags a part your Instagram strategy and use them when you post images of products.

Facebook data shows that merchants who tag more than 5 days per month in their feeds see an average of:

  • Visitors to product pages have increased by 278%
  • Purchases up 231%
  • Sales increase by 216%

Because people spend so much time on Instagram, they use product tags in different formats, such as stories, reels, IGTV and captions, the most successful shopping businesses use product tags often across all formats.

To increase shoppable posts, you can use product tags frequently to reach more shoppers and make your shop stand out.

How to use AliExpress for dropshipping

Once you’ve got your dropshipping store set up, what should you do when you receive your first order?

Dropshipping with AliExpress works in the same way as regular dropshippers. Once you have received an order, click on AliExpress to purchase the item and then enter the name and shipping address of your customer. Rest is handled by AliExpress sellers.

It’s possible to dropship from AliExpress by hand. A spreadsheet with a list all products, their price, AliExpress cost, and a link will help you keep track of the AliExpress listing is a great idea. It will make it easier to track price changes and find the supplier when you receive an order.

 

Oberlo can also be used to handle this. This makes it much easier to place orders on AliExpress, and monitor price changes. This is a much more efficient way to save time, which can be your most valuable resource. This allows you to grow quickly without having to order manually dozens (or even more) of AliExpress products.

 

It works like this: It is as easy as installing the Oberlo app in your Shopify shop, checking your orders in Oberlo and clicking on Order Product next each pending order. Oberlo takes care of the rest. Oberlo will purchase the AliExpress product for you and enter your customer details.

Oberlo can even notify you if a supplier on AliExpress has increased their price or gone out of stock, and will suggest other dropshipping suppliers.

Oberlo can also be used as a dashboard to dropship through AliExpress. It allows you to track all orders and monitor delivery status.

Dropshipping via AliExpress is possible if you let the seller know what your plans are. The supplier will not include invoices or promotional materials in the shipment that is sent to you. You can leave a message to the seller at checkout. It is best to leave a message like “We are dropshipping.” Oberlo will do this for your AliExpress purchase.

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If the supplier is located in China, you can choose ePacket shipping. Many suppliers offer it free of charge. Oberlo makes it easy to choose ePacket shipping at checkout for AliExpress orders.

You will receive an email soon letting you know that your order is shipped, depending on the processing time of your seller.

To view your order, click the link in the email. This will let you see the tracking number.

 

Go to Shopify admin to complete your order. Make sure you enter the tracking number.

 

Oberlo can be used to dropship with AliExpress. Your order will be fulfilled automatically. If you are using Oberlo, skip this step.

That’s all! It’s now time to wait for your customers. AliExpress will email you to confirm that your order has been received. If there are any problems with the product, delivery or shipping, please allow some time for the customer to contact you. You can then contact AliExpress to raise the issue with your supplier, encouraging them in the corrective action and hopefully solving any future problems.

What about returns and refunds?

Many dropshipping suppliers, such as AliExpress and Alibaba, don’t offer returns. You will need to deal with returns and refunds in one way or another. If a customer places an order on your website and it doesn’t arrive or they are unhappy with the purchase, this is usually a sign that there are problems.

If your order is not received, the first case will be dealt with by AliExpress. If this happens, you can contact your supplier to resolve the problem or take advantage of AliExpress’ Buyer Protect.

It’s often a matter of expectations. The customer may not be satisfied with the product they received. If the customer is unhappy with the product, I recommend that they get a refund. Also, you can ask them to review your marketing and see if you can make any adjustments to their order. In many cases, customers may not have understood what they ordered. Ask your customer to take pictures of the damaged product and then send them to AliExpress.

Growing your AliExpress dropshipping company

After you have made your first sales, you can start to look at AliExpress and dropshipping as ways to grow.

You’ll eventually be able to identify reliable suppliers and those who don’t. The best dropshipping tip is to build relationships with reliable suppliers. This will enable you to obtain better prices and faster processing of your orders.

Dropshipping via AliExpress is easy if you use WhatsApp. To establish a business relationship, ask for the seller’s Skype username if you find yourself ordering from them often. After you have proven that you can generate recurring sales, sellers may allow you to put your logo on products and include custom invoices or branded inserts in shipping packages.

Oberlo makes it easy to start a dropshipping business.

Dropshipping on AliExpress has the best advantage: it allows store owners quickly validate business ideas as well as products. Are you unsure if your product is a good fit for sale? You can add it to your shop and start testing it! If it fails, you can easily remove it and test another item.

There’s very little risk in setting up this business because you don’t have to manage any inventory or carry it around. Oberlo is free to begin, as I said.

Dropshipping from Amazon to eBay

Dropshipping low-cost products from Amazon FBA is an older dropshipping model. This can still be used to sell to buyers on ebay. Although legal, buyers and platforms generally don’t approve of dropshipping. You only make a small profit.

You can think of it as a customer: You buy the latest grooming brush on eBay for $20. After a week, you are excited. Your brush arrives in an Amazon box when FedEx knocks at your door.

You are curious, so you search Amazon for the product and discover it is a fraction of what you paid for. What would this say about the company you purchased from? This scenario is not one you should expect to repeat.

This model can increase profits for dropshippers, but it doesn’t win any other. EBay doesn’t support the Amazon-to-eBay-arbitrage business model either, allegedly banning hundreds of Israeli companies for it in 2017.

If you are looking to establish a transparent and honest dropshipping business, avoid Amazon dropshipping to eBay.

Continue reading: Dropshipping

Dropshipping Software for Amazon

This list contains tools to help you get started in Amazon dropshipping.

  1. Amazon Channel app . This Free Shopify app lets you manage your Amazon inventory from your Shopify admin and fulfill Amazon orders. Your Shopify admin can create Amazon listings, track inventory, and monitor the sales with your Sales Overview or Analytics pages. You don’t have to leave Shopify if you want to sell on multiple marketplaces.
  2. You can use this program to verify search volume and keyword data. Paid plans start from $29.99 per month
  3. Sellery. The real-time Amazon repricing tool allows you to create repricing strategies that win the Buy Box, increase sales, and profit automatically. The trial version is free. You can then upgrade to a paid plan that will earn you 1% of your monthly gross sales. Minimum monthly payment is $50
  4. FeedCheck . FeedCheck allows you to monitor and respond customers reviews in order to build relationships with customers across all sales channels. It allows you to quickly access Amazon reviews, which will allow you to provide better customer support. It also allows you to monitor the product reviews and questions of your competitors so that you can improve and analyze your products.
  5. Shop.Tools . This app automates your Amazon dropshipping shop. Access a powerful keyword manager, PPC management tools, product research tools and marketing automation tools made with ManyChat. Messenger marketing workflows can be downloaded for promotion counter distribution, automatic review captures, rebate distribution and other purposes to help you grow your Amazon business quickly.

Dropshipping from your online store

Creating an online store to sell Amazon products is another option to dropshipping Amazon products via third-party websites like Amazon and eBay. This is the best way to build a profitable dropshipping company.

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Pros

You have more control. Your online store allows you to set up a shopping environment that is conducive to selling your products, and most importantly, to adding value to your customers. You can personalize the layout and design product pages to better inform customers about your products.

Simple design. Using platforms like Shopify, it’s easy to create your own ecommerce store. You can choose from hundreds of store designs, customize it, add your products and connect a payment gateway. You can create an online store in a matter of hours depending on what type you are looking for.

Mobile-ready. Selling via Amazon and eBay via mobile can be difficult. Your online store will be responsive if it is built with a trusted hosted eCommerce platform. This means that it will look great on both an iPad and a mobile phone. This is becoming increasingly important as almost 30% of online sales are done via mobile devices.

Shopify and other online stores allow you to manage your entire business via your mobile device. Dropshipping business owners often want to operate their business from anywhere, even on the beach.

There are no third-party fees. Amazon and eBay will not charge 10% to 15% for every sale. This will greatly increase your profit margins. Starting your dropshipping company through an online store will make you more money.

More dropship supplier options. You can establish relationships with wholesalers via sites such as AliExpress, AliBaba and Oberlo if you own a dropshipping company. You can also find vendors that use EPacket shipping if you are concerned about shipping delays. This will speed up shipping and ensure your products arrive at customers sooner.

Building real businesses. You’ll also be creating equity in your business. A business that is built around a website can be sold much more easily.

Cons

You will have to generate traffic via marketing, social media and SEO. You’ll need to invest time and money in long-term campaigns to promote your store.

Shopify is the best way to grow your online business.

Dropshipping from Amazon can help you increase your sales, no matter how experienced or new. Dropshipping is a great way to increase sales for your Shopify store. We have the tools to assist you with dropshipping fulfillment and pricing. Also, be sure to read our top dropshipping tip. You can make your online business more profitable and live the life you want.

Dropshipping Fulfillment: Understanding Supply Chain and Fulfillment

The supply chain is a fancy way of describing the journey a product takes from conception to manufacturing and then finally to the customer’s hands. Hard-core suppliers chain experts would insist that a product’s supply chains extend all the way to the extraction of materials (such as oil and rubber) needed to make it. This is a bit intense.

We don’t need too much detail for the purposes of this guide. It is enough to know the three main players in the dropshipping supply chains: wholesalers, retailers, and manufacturers.

Manufacturers. manufacturers create the product, and many do not sell directly. They sell bulk to wholesalers or retailers. Although buying directly from the manufacturer is the most cost-effective way to buy products for resale is the best option, many manufacturers have minimum purchase requirements that you must meet. When selling products to customers, you will need to stock the product and then re-ship it. It is often more convenient to purchase directly from a wholesaler.

Wholesalers. Wholesalers purchase products from manufacturers in bulk, mark them up slightly, and then sell them on to retailers for resale. If there are minimum purchasing requirements, these will be lower than the manufacturer’s. Wholesalers are likely to stock products from many manufacturers, if not hundreds. They also tend to specialize in one industry or dropshipping niche. They sell to only retailers, and not to the general public.

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Retailers. Anyone who sells products directly at a markup to the public. You are a retailer if your business fulfills orders through dropshipping suppliers.

Dropshipping is not a job, it’s a service.

Notice that dropshipper is not listed in the supply chain. Why is that? Why? Because any one of these three — manufacturer, wholesaler, and retailer–can act in a role as drop shipper.

If a manufacturer offers to ship their products directly to you, this is called dropshipping. A retail merchant can also dropship but its pricing will not be as competitive as that of a wholesaler because it doesn’t buy directly from the manufacturer.

A “dropshipper” doesn’t necessarily mean that you will get wholesale pricing. This simply means that the company will ship your products for you. You want to get the best price so make sure you are working with a genuine wholesaler or manufacturer. This topic will be covered in detail in the next chapter.

Dropshipping in action: How to order

Let’s now look at the process of a drop-shipped order. We’ll show you how an order placed at Phone Outlet, an online retailer that sells accessories for smartphones, is processed. Phone Outlet dropsships all its products directly from Wholesale Accessories, a wholesaler.

This is an example of how the ordering process might look.

Step 1: The customer places an order with the Phone Outlet

Mr. Allen is looking for a case to protect his new smartphone so he orders one through Phone Outlet’s online shop. A few things happen once the order has been approved:

  • Phone Outlet and Mr. Allen will receive an email confirmation (likely identical to the original order) that the store software generates automatically.
  • The payment of Mr. Allen is automatically captured during the checkout process. It will then be deposited to Phone Outlet’s bank account.

Step 2: Phone Accessory Outlet places the order with its supplier

The next step is to forward the email confirmation from Phone Outlet to Wholesale Accessories. Wholesale Accessories will charge the wholesale price plus any shipping and processing fees to the credit card that Phone Outlet has on file.

Note : Some dropshippers support automatic XML order uploading (a common format to store inventory files), but the easiest way to place an order with dropshipping providers is via email. It’s universally accepted and simple to use.

Step 3: Ship the order to wholesale accessories

Wholesale Accessories will pack the order and ship it to the customer, provided that the item is in stock. Although the shipment is from Wholesale Accessories, Phone Outlet will include the name and address on the return label. The invoice and packing slip will also contain its logo. Wholesale Accessories will send a tracking number and an invoice to Phone Outlet once the shipment is complete.

Please note that dropshipped orders often take less time than you might think. Quality suppliers can usually ship an order within a few hours. This allows merchants to advertise same day shipping even if they use a dropshipping supplier.

More information: Everything you need to know dropshipping and ePacket

Step 4: The customer is notified by phone outlet about shipment

Phone Outlet will email the tracking information to the customer once the tracking number has been received. This may be done using the email interface built into the online store interface. Once the order has been shipped and payment received, and the customer is notified, fulfillment can begin. Phone Outlet’s profit or loss is the difference in what it charged Mr. Allen versus what it paid Wholesale Accessories.

Dropshippers can’t be seen

The dropshipper, despite its vital role in order fulfillment and delivery, is invisible to the customer. Only Phone Outlet’s logo and return address will be visible on the shipment once it is received. If Mr. Allen receives an incorrect case, he will contact Phone Outlet. Wholesale Accessories would coordinate behind-the scenes to send the correct item.

Dropshipping Fulfillment: Understanding Supply Chain and Fulfillment

The supply chain is a fancy way of describing the journey a product takes from conception to manufacturing and then finally to the customer’s hands. Hard-core suppliers chain experts would insist that a product’s supply chains extend all the way to the extraction of materials (such as oil and rubber) needed to make it. This is a bit intense.

We don’t need too much detail for the purposes of this guide. It is enough to know the three main players in the dropshipping supply chains: wholesalers, retailers, and manufacturers.

Manufacturers. manufacturers create the product, and many do not sell directly. They sell bulk to wholesalers or retailers. Although buying directly from the manufacturer is the most cost-effective way to buy products for resale is the best option, many manufacturers have minimum purchase requirements that you must meet. When selling products to customers, you will need to stock the product and then re-ship it. It is often more convenient to purchase directly from a wholesaler.

Wholesalers. Wholesalers purchase products from manufacturers in bulk, mark them up slightly, and then sell them on to retailers for resale. If there are minimum purchasing requirements, these will be lower than the manufacturer’s. Wholesalers are likely to stock products from many manufacturers, if not hundreds. They also tend to specialize in one industry or dropshipping niche. They sell to only retailers, and not to the general public.

Retailers. Anyone who sells products directly at a markup to the public. You are a retailer if your business fulfills orders through dropshipping suppliers.

Dropshipping is not a job, it’s a service.

Notice that dropshipper is not listed in the supply chain. Why is that? Why? Because any one of these three — manufacturer, wholesaler, and retailer–can act in a role as drop shipper.

If a manufacturer offers to ship their products directly to you, this is called dropshipping. A retail merchant can also dropship but its pricing will not be as competitive as that of a wholesaler because it doesn’t buy directly from the manufacturer.

A “dropshipper” doesn’t necessarily mean that you will get wholesale pricing. This simply means that the company will ship your products for you. You want to get the best price so make sure you are working with a genuine wholesaler or manufacturer. This topic will be covered in detail in the next chapter.

Dropshipping in action: How to order

Let’s now look at the process of a drop-shipped order. We’ll show you how an order placed at Phone Outlet, an online retailer that sells accessories for smartphones, is processed. Phone Outlet dropsships all its products directly from Wholesale Accessories, a wholesaler.

Learn more: 

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MSI

This is an example of how the ordering process might look.

Step 1: The customer places an order with the Phone Outlet

Mr. Allen is looking for a case to protect his new smartphone so he orders one through Phone Outlet’s online shop. A few things happen once the order has been approved:

  • Phone Outlet and Mr. Allen will receive an email confirmation (likely identical to the original order) that the store software generates automatically.
  • The payment of Mr. Allen is automatically captured during the checkout process. It will then be deposited to Phone Outlet’s bank account.

Step 2: Phone Accessory Outlet places the order with its supplier

The next step is to forward the email confirmation from Phone Outlet to Wholesale Accessories. Wholesale Accessories will charge the wholesale price plus any shipping and processing fees to the credit card that Phone Outlet has on file.

Note : Some dropshippers support automatic XML order uploading (a common format to store inventory files), but the easiest way to place an order with dropshipping providers is via email. It’s universally accepted and simple to use.

Step 3: Ship the order to wholesale accessories

Wholesale Accessories will pack the order and ship it to the customer, provided that the item is in stock. Although the shipment is from Wholesale Accessories, Phone Outlet will include the name and address on the return label. The invoice and packing slip will also contain its logo. Wholesale Accessories will send a tracking number and an invoice to Phone Outlet once the shipment is complete.

Please note that dropshipped orders often take less time than you might think. Quality suppliers can usually ship an order within a few hours. This allows merchants to advertise same day shipping even if they use a dropshipping supplier.

More information: Everything you need to know dropshipping and ePacket

Step 4: The customer is notified by phone outlet about shipment

Phone Outlet will email the tracking information to the customer once the tracking number has been received. This may be done using the email interface built into the online store interface. Once the order has been shipped and payment received, and the customer is notified, fulfillment can begin. Phone Outlet’s profit or loss is the difference in what it charged Mr. Allen versus what it paid Wholesale Accessories.

Dropshippers can’t be seen

The dropshipper, despite its vital role in order fulfillment and delivery, is invisible to the customer. Only Phone Outlet’s logo and return address will be visible on the shipment once it is received. If Mr. Allen receives an incorrect case, he will contact Phone Outlet. Wholesale Accessories would coordinate behind-the scenes to send the correct item.

Pros and cons of sole proprietorship

A sole proprietorship can be a business with only one member that has not been incorporated by state filing. There are pros and cons to sole proprietorships. However, there is no distinction between owner and business and no liability protection. While sole proprietorships can reduce startup costs, they won’t limit your personal liability.

No matter how your business structure is set up, it is important to keep your personal and business finances separate. Combining funds can lead to huge tax, accounting, and liability headaches. Chase ranked first in our review of the best business bank options. A $300 bonus is available to new customers.

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Sole Proprietorship: Pros and cons

 

The advantages of a sole proprietorship Cons of Sole Proprietorship
Simple Setup and Affordable Unlimitable Liability
No corporate business taxes There is no ongoing business life
There are no annual reports/filings It is difficult to raise money
No restrictions on the use of formal business structures Inability to take on business debt
Simple Recordkeeping It can be regarded as unprofessional

 

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5 Advantages of a Sole Proprietorship

The easiest type of business is a sole proprietorship. This type of business does not require any formal setup, annual administration, dedicated taxes or formal record keeping. A sole proprietorship allows you to simply sell goods and services. All bills and debts are your responsibility. All income from business is pass-through, and can be filed on your personal tax returns.

These are the five benefits of being a sole proprietorship:

1. 1. Easy setup and low cost

A sole proprietorship does not require you to file any paperwork or complete formal business structures. The only thing you need to do is start your business. You don’t even have to pay any filing fees or incorporation fees. You may need a permit, special license, surety bonds or business insurance policy depending on your industry. However, you don’t have to file any filings with the state.

This ease of setup and low cost of administration/management makes sole proprietorships great for cottage industries and seasonal businesses. It can be very beneficial to start a new venture, especially one that does not have significant liability.

Sole proprietorships are so easy to establish that they don’t require owners to take the necessary steps to incorporate. This would give them liability protection and other benefits. These steps are not required for sole proprietorships, and they also forfeit the liability protection that comes with formal business structures.

You can protect your liability by incorporating as an LLC using a service such as Rocket Lawyer. You can legally seperate yourself from your business by having them assist you with federal and state filings.

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2. 2.

You don’t have to pay 21% corporate taxes on your business profits as a sole proprietor. You simply keep filing personal tax returns, and any income you receive from your business is claimed as pass-through taxes. All income is subject to your normal income tax rate. Solo proprietors often are exempted from the state franchise and excises taxes.

These exemptions make taxes for sole proprietorships much simpler and less expensive than those of C-corps. Revenue is taxed at company level, and then again when dividends are paid to shareholders. The current dividend tax rate is between 15-20% and 41%, meaning you can pay up to 41% on your taxable profits. This does not include income tax that you pay on your salary.

Pass-through tax benefits are not only available to sole proprietorships. Both LLCs and Scorps can be considered pass-through entities. They avoid double taxation as well as the corporate tax rate. However, LLCs can be subject to franchise or excises tax depending on their operations. This means that taxes may still be higher than sole proprietorships depending on the level of profit.

As a sole proprietor, you might be subject to the following taxes:

  • Normal income tax – As a sole proprietor, there is no salary. All profits are instead filed on your personal tax return, and taxed at the ordinary income tax rate.
  • Self-employment taxes – If you own a business, you will have to pay self employment tax on all income earned by that business. This is the employer-portion FICAtax. This means that you will pay 7.65% additional taxes, or 15.3-16.2% FICA taxes.
  • Sales Tax – Depending on the nature of your business, you might need to collect and pay sales taxes if you sell goods. The amount varies from one state to another, but is usually between 6-9%.

3. There are no annual reports or filings

Solo proprietorships don’t need to file annual reports with the state. You don’t even have to file any other tax returns. This is in contrast with LLCs or S-corporations which generally have to file an annual report after they are formed. This report usually requires the updating of managers or members’ lists.

You would need to file many additional filings if you decide to use an LLC or LLP, Scorp, C-corp, or other entity instead of a sole proprietorship.

  • When you officially establish a company.
  • Annual filing- Charged in most states to keep you company current
  • You must notify the state if you are changing managers or directors.
  • List members –Many types companies must inform the state when their members change
  • An annual audit – Some companies must submit an audit every year
  • Company tax returns Certain types of companies must prepare corporate tax returns, and pay separate taxes for business profits

It is beneficial that sole proprietorships do not have to file an annual return. This saves time and headaches. However, most states charge a fee of $50-$200 for annual filings. Solo proprietors need only file their annual tax returns.

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4. 4.

Others, which are more structured, have certain restrictions on their operations and must meet additional requirements. These requirements do not apply to sole proprietorships. As a sole proprietor, you are free to make any business decision you like, provided it is legal. There is no approval or formal review.

You can skip certain requirements for other business types if you are sole proprietor:

  • Annual meetings –Companies like LLCs must hold an annual meeting to review the lists of members and managers
  • Board Meetings – Some companies must have certain business decisions officially approved by directors
  • Recorded Minutes –Formal minutes must be kept for these meetings of LLCs and corporations
  • Shareholder votes Any formal actions by the company, such as appointing new managers or admitting members, must be voted upon
  • Formal Reviews – Managers need to be formally re-appointed and certain actions must be reviewed.

5. Simple Record Keeping

An LLC or other formal-structured business requires you to separate your personal and business finances. You run the risk of being open to unlimited liability. This is known as “piercing corporate veil.”

Sole proprietors are subject to unlimited liability so many sole proprietors don’t separate their finances. Sole proprietors deposit their business income directly into personal accounts and pay all bills and debts themselves. They treat the business as an extension to their personal finances. This could make it easier to run a sole proprietorship than an LLC.

Although it is simpler to keep business and personal finances separate, it is often not a good idea. Separate records allow you to monitor cash flow and help you manage your business better. First, open a checking account for your business.

Separating finances in a sole proprietorship won’t protect your assets, but it can assist with bookkeeping, as the business grows. If you choose to change to an LLC, or any other type of business structure, it will make things easier. Chase was voted the best business account by us after we reviewed them all. Bonuses are available to new customers.

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5 Con’s of a Sole Proprietorship

Consider the pros and cons of sole proprietorship. One of the biggest disadvantages to sole proprietorship is that it allows for unlimited liability. The business owner can be held responsible for all obligations. If you are looking to grow your business, it is possible that W2 employees won’t be available (only 1099 contract employees).

The following are major disadvantages to sole proprietorships:

1. 1. Unlimited Liability

You don’t have the limited liability protections that an LLP, LLC or S-corporation offers if you are a sole proprietor. If someone is hurt by your business, a product you sell, or a mistake that you make, then you are personally responsible for any business expenses or debts. This means there is no legal distinction between you and your company.

You’ll be responsible for some liabilities in a sole proprietorship.

  • Your business’s expenses
  • Business-related debts
  • Product-related Liability
  • Property-related injuries
  • Insufficient or inappropriate service can result in civil damages

A sole proprietorship has unlimited personal liability. Customers, vendors, and lenders can seek your personal assets to pay any business obligations. This is in contrast with LLCs, Scorps and C-corps which provide a shield of liability between the business and its owners.

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The personal assets of the company owners are protected in an LLC or Ccorp. They cannot be taken by customers, lenders, or vendors to meet the company’s obligations unless the business owners do anything that would allow the corporate veil be lifted or if the owner signed a personal guarantee. A sole proprietorship may not be the right choice if you are looking to legally protect yourself.

Rocket Lawyer can help you form a single-member LLC. This will protect you from any liabilities that may arise from your company. You can visit them right away and receive legal documents in no time.

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Josh Zimmelman Westwood Tax and Consulting An LLC is a limited-liability company that protects your personal assets from creditors and lawsuits. Others entities, such as sole proprietorships and general partnerships, are unlimited liability companies. These businesses have the same owner and company. Therefore, you are liable for all debts of the business, even if the partner takes them on.”

– Josh Zimmelman, President, Westwood Tax & Consulting

2. 2.

Your business will survive if you set it up as an LLC or C-corp. Your business can continue to exist as long as your business files are current and you have proper licensing. However, if you are a sole proprietor and you have to go bankrupt, it is the end of your business.

There is no way to ensure continuity in a sole proprietorship. A family member or employee may be able to continue working in your business but they would be starting a brand new company. They wouldn’t be sustaining your operations. This makes it difficult to plan for the long-term and make succession plans for your eventual exit.

Sole proprietorships cannot hire full-time employees or W2 employees. Although you can hire 1099 independent contractors to work for you, it is not possible to manage payroll or retain employees over the long-term. You will need to incorporate an S-corporation or C-corp if you plan to hire employees in future.

3. It is difficult to raise capital

If you need to raise capital from outside investors, structuring your business as a sole proprietorship may not be a good idea. Because there is no business to sell, it is almost impossible to raise capital unless you have tangible assets and intellectual property that investors could buy into.

Sole proprietorships do not have equity shares and are not licensed businesses. There is no formal process for reviewing business decisions and approvals. Shareholders in sole proprietorships have virtually no rights. These concerns are why investors don’t usually invest in sole proprietorships.

Even an LLC can make it difficult to raise capital. However, you can elect an S-corp, which makes it much easier. A C-corporation is the best option if you need to raise capital, particularly from angel investors or venture capital firms.

4. You can’t take on business debt

A sole proprietorship is not a company that has been established. Therefore, it is not possible to obtain a loan for a business. All debt, even those you borrow to grow your business or run it, is considered personal debt. Lenders may require that all loans are personally guaranteed by the sole proprietor. This means they have the right to seize your personal assets in the event of default.

Because a sole proprietorship does not constitute a separate business entity, you own the business. You are personally guaranteeing the repayment of any business loans to sole proprietorships.

This may not be the case for other business structures. Even if you are an LLC, you will likely need to personally guarantee any type or loan you get, including an SBA Loan. When you take on business debt, make sure that you understand all of your personal responsibilities.

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5. 5. Perceived lack of professionalism

Customers and business partners often think sole proprietors lack professionalism. This may not be an issue for people who want to start a small business from home or make extra money. It is worth taking into consideration the pros and cons associated with a sole proprietorship when you are deciding on the type of business structure that you would like to use.

C-corporations, which are at the opposite end of the spectrum of sole proprietorships and partnerships, are commonly used by large companies around the globe. They are considered the most professional and well-respected. These entities are known for having the most rigid organizational structure and oversight regulations. However, they offer the best opportunity to raise outside capital and provide the highest liability protection.

Solo proprietorships on the other side do not have any form of oversight or management. A sole proprietorship simply means that someone is selling products or working for themselves. Sole proprietors often receive income from their business. Many bills are paid out of their personal accounts.

You can avoid some of this unprofessionalism by opening a small business checking bank in your business’s name. Many providers allow you to use an “doing business under” (DBA) alias. This will depend on the institution. You can find more information in our article on the Best Checking Accounts.

Sole Proprietorship Examples

The pros and cons of sole proprietorships make them ideal for small-scale entrepreneurs just starting out in low cost, low-liability ventures. This is also a better option for small-business owners with no substantial assets, which a creditor could pursue if the business fails.

These are some examples of sole proprietorships that are worth mentioning:

Amazon Businesses

Amazon businesses are often started by people who white label products. This can be done easily as a sole proprietor. You can find more information in our article How to Sell on Amazon.

Etsy Shops

To avoid the expense of setting up and managing a formal business entity, many sellers using Etsy are sole proprietors. You can find more information in our How to Sell on Etsy article.

Other Personal Business

Solo proprietorships can be used to run a variety of other businesses. Sole proprietorships can also be suited to independent service providers such as massage therapists or consultants via platforms like Upwork.

A sole proprietorship can work well for even a small snow-shoving or lawn-mowing business. In these instances, it is important to change to a business that offers liability protection prior to purchasing trucks and other equipment. For example, moving to an LLC or Scorp would protect you against personal liability in the event of injury.

If their business is only a small, part-time venture or a weekend business, some small business owners prefer to be sole proprietors. This allows them to avoid having to register or manage an LLC. However, those who grow eventually opt for a more formal structure which provides greater liability protection.

Alternatives to Sole Proprietorship

There are many business structures that can be used in place of a sole proprietorship.

Limited Liability Company

LLCs make it easy to create and manage a company. You can create them online in most states in as little as 5-10 minutes for $150-$200. Although LLCs offer limited liability protection for company owners, they require annual filings, up-to-date member lists, tax filings with K-1s issued members, and more formal administration.

Limited Liability Partnership

Limited liability partnerships are not available in all states. They can only be used to practice a licensed profession. They are tax-exempt entities and tax liability is passed to their owners based upon the ownership stake.

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Although LLPs function in the same way as LLCs, they can only be used within certain industries.

S-Corporations

S-corps, closely held corporations, are generally considered pass-throughs and receive special tax treatment in some areas. S-corps owners can pay their own salary, but the IRS doesn’t recognize LLC owners being entitled to a salary. However, they may deduct this expense from the corporate profit.

You can find more information in our article C-corps.

C-Corporations

C-corps are the most stable and expensive of all the business structures. C-corps are subjected to double taxation. Corporate profits are taxed at 21%. These profits are then subject to double taxation once they are distributed as dividends to owners of the company, at the individual income tax rate.

You can find more information in our article Ccorps and S-corps .

Is a Sole Proprietorship Right for

The pros and cons of sole proprietorships are beneficial for new business owners who are just starting out. They should not be entering a risky field or needing a lot of capital. They shouldn’t have to borrow money or be at risk of injury. Ideal would be a cottage industry.

Solo proprietorships work best for those business owners who do not have significant assets that could be taken over by creditors, vendors, or customers as a result of debts or liabilities incurred from the operation. This type of business is ideal for entrepreneurs who are just starting their business and plan to move to a formal structure later.

Frequently Asked Questions (FAQs

1. What are the advantages of an LLC over a sole proprietorship?

An LLC is a better option than a sole proprietorship because it limits your liability as business owner. The sole proprietor of a business is responsible for all its debts and obligations. An LLC allows business assets to be segregated from personal financial accounts. You are personally responsible for any business obligations only if you give a personal guarantee or do anything that would allow “piercing” the corporate veil.

2. 2.Why is it good to be a sole proprietor?

There are pros and cons to sole proprietorships. They can be very beneficial for small businesses or new ones. Unfortunately, many businesses fail. So it’s a good idea to start as a sole proprietorship until you know if your business will succeed. This is especially true for businesses that don’t require large amounts of outside investment or involve a lot of liability.

3. Are You Required to Register as a Sole Proprietor

You don’t need to register as sole proprietor. Depending on the industry you work in, you may need to register for specific licenses.

4. What is the best way to pay taxes as sole proprietor?

You can structure your business as sole proprietorship and continue to pay your personal taxes. You can claim any income you earn from business operations and pay self-employment taxes. Depending on the location of your business, you may need to collect and pay local and state sales tax for any goods that are sold.

Bottom Line

The sole proprietorship is an informal, great structure for small business owners. It is important to weigh the pros and cons when choosing a business structure. These businesses don’t offer liability protection or make it difficult for their owners to raise funds, but they are easy to set up and manage.

How to start a cleaning business: The complete guide

A wide variety of cleaning services are offered by cleaning businesses, such as vacuuming, dusting and floor mopping. Cleaning businesses have been focusing on the CDC-recommended procedures to eradicate the COVID-19 virus. This guide will discuss low-cost ways to get your cleaning business started on a tight budget. In seven easy steps, we will show you how to start your cleaning business.

1. Select the type of cleaning business you want

First, you must decide if you want to start a commercial or residential cleaning company. This decision will impact everything else, from financing to equipment to marketing.

Many cleaning companies do not offer services to commercial and residential customers. Each cleaning company offers different services and requires unique equipment. This is why specialization is important. It is also important to decide whether you are starting your business from scratch or buying a franchise that specializes in cleaning.

Commercial vs. Residential Cleaning Businesses

A residential cleaning service is one that specializes in cleaning homes, while a commercial cleaning service is one that specializes in cleaning businesses. It gets more complicated. The residential cleaning business is typically more affordable to start. However, adding on services like window washing and floor waxing can make it very profitable.

You also want to consider that residential is done during the day, and commercial is during the night. Also, residential cleaning is more detail oriented because the homeowner is more likely to inspect your work, and be particular about how you do certain tasks such as arranging pillows and blankets. Commercial covers more square feet, so you’ll have to work faster and less detail oriented than residential.

You’ll have more customers in residential areas, which means less competition for your business. Your budget and your lifestyle will determine which option you choose between residential or commercial.

Do You Need to Buy a Cleaning Franchise?

Franchises in cleaning are very popular. You can choose from more than 15 brands. Cleaning franchises are attractive because they are generally affordable to start. Many franchises offer the option of starting from home or part time. As low as $3500 for a Stratus Building Solutions franchise

It’s important to keep in mind that not all cleaning franchises will be affordable. Some franchises require a $200,000 investment. These franchises require vehicles, advanced equipment, and a physical location.

Learn more:

Magento pos

Shopify pos

Bigcommerce pos

Woocommerce pos

Netsuite pos

MSI

 

A franchise offers industry and business training, which is why many new business owners opt to purchase it. The Maids, for example, offers seven-weeks of business training. It also provides two days of culture and admin training at headquarters. You can also get four days on-site training at your place. This is a boot camp for cleaning businesses!

Research top cleaning franchises

Franchise Type Initial investment
Stratus Construction Solutions Commercial $4,000 to $73,000
JanPro Commercial $4,000 – $54,700
Vanguard Cleaning Systems Commercial $6,000 – $37,000
Anago Cleaning Systems Commercial $11,000 to $68,000
Maid Pro Residential $58,000 to $222,000
The Maids Residential $63,000 to $141,000
Merry Maids Residential $125,000 – $90,000.
Molly Maid Residential $112,000 to $156,000

2. 2.

Next, you need to create a business plan. Get your ideas down on paper. Also, research startup costs and project how much the cleaning business will make over the next two-years (referred to as financial projections).

traditional business planning is required if you are looking for large amounts of funding from a bank, investor or other financial institution. To help with financial projections, most people will use a business plan software. Software is required to help you understand what an income statement or balance sheet are.

A one-page business plan is possible

The one-page business plan should take you less than fifteen minutes to complete. It’s easy: Simply write one to two sentences for each of the questions provided in the template.

Download template: PDF

Create a budget

You will need to calculate the financials of your cleaning company along with the business plan. Three figures are required: estimated startup costs, estimated monthly expenses, monthly income and estimated startup costs.

These are the most common expenses associated with a low-cost cleaning company:

  • Permits and Licenses: $50 to $500 to Register as a Limited Liability Company
  • Insurance: $500 – $3,500 per year, depending on how many employees. You can expect to pay only a few hundred dollars a month.
  • Cleaning products and equipment: $300-$600 depending on the model of tools. Vacuums of high quality can be purchased for $200 to $300. There are $10 off for several all-purpose cleaning products, $10 off for a broom and $20 on a mop. You also get $20 off for dusting supplies.
  • Advertising:$100 – $200 for print or online marketing
  • Labor: About $12 per hour.

Once you have estimated your expenses, it is time to calculate your rates and the monthly income you will make.

Get your Cleaning Rates Set

Rates will be determined by factors such as location, competition, clientele and interior condition. Upgrades such as wall washings, appliance cleanings and window cleaning can help you earn more revenue.

These options are important when setting your rates

  • Hourly rate: $30-$90 per hour. The most popular billing method is the hourly rate. Call your competitors to get an estimate of your hourly rate and inquire about the cost of service.
  • Flat rate: $120-$150 for a single family home. This rate can be determined by estimating the time it will take to clean a house. This rate may be preferred by customers because they know exactly how much to pay each month.
  • Square Foot Feet Rate: Commercial cleaning companies charge per square foot. An office building will typically be charged between $.05 and $.20 per square feet.

Add up the income and expenses

Once you know your startup costs and monthly expenses and your potential income, the next step will be to calculate your net income (income after expenses) and the time it will take to make your initial investment back. This is also known as breakeven.

Let’s take, for example, startup costs of $4,000. You calculate that your monthly expenses will be $1,000, which includes your quarterly tax withdrawal, or about 20% of your income.

If you clean 20 houses per month, earning $120 per house, that’s $2,400 in income. You will have $1,400 in net income each month after you subtract the $1,000 monthly expenses.

This scenario will require you to breakeven in four months and earn your $4,000 investment back. It’s unlikely that you will have 20 homes within your first month of business. This client base and your return on investment may take more than four months.

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3. 3. Get the necessary funds

You did it! Now you know the amount of money it will take to open the cleaning business and keep it running for at least six more months. Now, you have to raise the money. How do you go about it?

In order to begin your business, it is a good idea to use personal money. Avoid debt whenever possible. If you have vehicles or a physical address, this may not be possible. No matter what type of business you are opening, you will still need to repay the debt if it fails.

To start your cleaning business (bullets), you might consider the following funding options:

  • Personal money: Before you use any personal funds to launch your business, make sure that the money is transferred into a bank account for the business (described below).
  • Crowdfunding – This funding option is often overlooked by new cleaning business owners. Crowdfunding is a way to raise funds from family and friends before you open your business. The funds can be used to buy equipment, and then for prepaid services.
  • Credit Cards: We don’t recommend that you take on large amounts of debt in order to start your business. A credit card can be an option if you are willing to take on debt. You can get a 0% APR for 12-18 months if you have excellent credit.
  • Personal loan – We recommend that you do not take out a personal loan in order to start a cleaning company. Because the loan isn’t secured by collateral, the interest rate is high (12%)
  • Home equity loans: You can get a loan to fund your startup if you have equity in your house. The interest rate on this loan will be very low because it is secured by your home.
  • Rollover to business startups (ROBS).: This is only for franchise openings. ROBS refers to when you use your 401(k), money to open a new business.

You can’t apply for traditional bank loans or SBA loans until you have a minimum of three years worth of income and expenses or paid off any equipment. Banks don’t usually lend to startups.

A bank loan or franchise financing may be available if you are franchising. A bank may be able to arrange funding through the franchise. If the franchise’s overall failure rate is low, a bank might be willing to finance it.

4. 4.

Now that you have enough money to start your cleaning company, it is time to organize your legal documents. To open a bank account for your business, you will need an employment ID number.

Register for an Employment Identification Number

To identify small businesses, the federal government provides the employment identification number (EIN). This number is used to file taxes, open a bank account or get a loan. The IRS offers a free EIN. It takes approximately 15 minutes to complete the entire process.

Register the Legal Entity

All owners of cleaning businesses need to register their business as an entity. If a lawsuit is ever filed against your business, you can protect your personal assets by registering as a legal entity. The cost of registering a business depends on the state. It can range from $40 to $500.

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Tip Do not try to save money and skip this step. Cleaning business comes with a risk because you use chemicals in the homes and homes of your customers. You could be sued by customers if you cause damage to their homes, or if you accidentally destroy something. Your personal assets could be used to pay damages if you don’t have a legal entity.

 

  • Sole proprietorship – This is the default structure for your business if you do not register it as a legal entity. A sole proprietorship does not provide legal protections.
  • Limited Liability Company : This is the legal entity that you will most likely choose to run your cleaning business. It is easy to set up and requires little maintenance each year.
  • C corp – The C-corp is another legal entity. It’s easier to set up than the LLC. Many business owners hire an attorney for assistance in setting up the LLC. C-corps are typically used for larger businesses that have many investors.
  • S corporation – Technically the S-corp (small company corp) is not an entity legal. It’s a tax designation. The S-corp was created by Congress to give small businesses similar tax benefits as large corporations. To determine if your LLC can be designated as an S-corp, you can use the custom calculator.

Visit your state’s official website for business registration. You can use an online legal service if you find the site difficult to navigate. IncFile can register your company for free (plus any applicable state fees).

Register for a Business Bank Account

Get a bank account before you incur any expenses or take on any new clients. You want to make sure your personal and business finances are separate as a business owner.

Separate bank accounts are useful for keeping track of income and expenses in order to file taxes. This separation of finances makes it easier to handle any IRS audits.

You can open a business check if you already have a banking relationship. Novo is a great option if you are looking for a bank. Novo is an online bank that caters to small businesses. Novo does not require a minimum balance to open a checking account. Big banks may require $1,500.

5. Get Proper Licenses & Insurance

A license is required for a cleaning business to operate in the locality. All cleaning companies will require insurance. This insurance covers any damage to a customer’s house. Workers’ compensation insurance is required if you hire employees.

Business License

Your state may not require you to obtain a license to operate a cleaning business. Check your state’s website for information about licensing requirements.

A General Business License is required for your city. A record of the businesses that are in operation is all that’s required by most cities. Visit the official website of your city to obtain a General Business License.

Atlanta, for example, requires that all businesses obtain a General Business License. This applies to both online and home-based businesses. The license costs $75. A $500 fine can be imposed if you fail to get a license.

General Liability Insurance

You should at least purchase general insurance (GL). This insurance will protect you from property and bodily injury. A small cleaning business will need GL insurance. It costs around $300 per annum.

Customers may ask for proof that your company is covered by general liability insurance before they hire you as a cleaning service. Customers want to be able to collect for any damage your cleaning might cause in their house or business.

Janitorial Bond

Although you will do your best to find the best people for your cleaning company, there is no guarantee that they won’t steal on the job. In the event of theft, a janitorial bond ( certainty bond ) protects the homeowner.

Here’s how it works. If an employee takes an item from a customer’s house, the bond company will pay for replacement. The bond company places your business on a payment schedule so that you can repay them over time. This is better than a lawsuit or large payment to the client.

A bond is required for new cleaning companies to ensure that thefts don’t cause financial ruin. An annual janitorial bond costs around $200

Workers’ Compensation

Workers’ Compensation Insurance is required if you have employees. Workers’ compensation insurance covers employees who are injured while on the job and pays for their medical bills, rehabilitation costs, as well as lost wages. Workers’ compensation will cost approximately $450 per employee annually.

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6. Buy Cleaning Equipment

Your first customer is almost accepted! First, you will need to buy the equipment necessary to do the job. Below is a list of affordable items that will help you get your cleaning business off to a good start.

These are the basics you’ll need:

  • Clean uniform or apron
  • Use paper towels
  • Microfiber cloths
  • Latex gloves
  • Use scrubbers
  • Toilet brush
  • Grout brush
  • All-purpose cleaner
  • Window cleaner
  • Wood cleaner
  • Grout and tile cleaner
  • Extendable duster
  • Sponge
  • Disinfectants
  • Vacuum
  • Bucket
  • Mop

 

Don’t be overwhelmed by the sheer number of cleaning products and brands available if you are starting from a tight budget. When you first start out, make sure to only purchase the items that are necessary. Do not spend more or get into more debt than you need.

Write down your cleaning wish list items. It’s tempting to want a premium vacuum right now. But resist the urge.

In your business plan, list your wishlist items. Indicate the net income level at which you will make each purchase. There will be milestones in your business that you can look forward to!

7. 7.Market Your Cleaning Business

Let’s discuss low-cost, free ways to get your cleaning company noticed. All online marketing, including Google My Business and social media, is free. Although physical marketing materials may have a price, you can make an impact on customers with creativity.

Material for Physical Marketing

There are many options available for physical marketing materials such as flyers, business cards and postcards. We’re talking about marketing on a budget so I will only discuss one low-cost strategy to market a cleaning company.

Leave a note on a card after each cleaning. Thank the homeowner for their service and ask them to forward your card to anyone who is interested in having their home cleaned.

If you are promoting your business using marketing materials, leave a small gift like chocolates or something that the homeowner would appreciate, such as a hand sanitizer. This is called reciprocity. This personal marketing creates an emotional connection between the homeowner and their customer, which makes them more likely than others to reciprocate.

Online Marketing

These are free online marketing strategies that will help you get your cleaning business noticed online.

  • Google My Business: All local businesses can use the GMB, a free listing provided by Google. Your GMB will be displayed first to potential customers who search for residential cleaning businesses.
  • Google My Business: After you have created your GMB listing, Google will also provide a one-page website for free. Although this is not a permanent website, it is a great option for cleaning businesses on a tight budget.
  • Social media profiles – The best advice for social media success? Choose one platform and use it well. You can choose the social platform that you like best (for cleaning, either Instagram) and build your following there.
  • Local business directory: A cleaning company should be listed at least on Yelp or Yellow Pages. You can find other directories that you should be listed on by doing a Google search for your service and seeing what results are returned.

Network in Your Community

Networking in person is an effective and memorable way to promote your business to potential customers. Try attending small business groups in your area such as the Chamber of Commerce and Rotary clubs. Volunteer to serve as a leader in order to make a lasting impression on the organization.

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Bottom line

We have discussed the steps required and low-cost ways to get your cleaning business started. A franchise is a great option for a new business owner who needs the support and training they need. After you have your first customers, it is important to put in great work. A clean house or office is the best way to market your business.

What is Premises Liability Insurance?

What is Premises Liability Insurance?

Premises liability coverage covers guests who are injured on your property. In all states, the law requires that property owners make every effort to ensure that guests are safe.

Understanding what premises liability coverage entails is the first step to understanding why you might need it. Premises liability refers to the idea that businesses are responsible for keeping their premises safe for visitors. The business is responsible for any injuries or damage that occurs on the premises. The business could be sued or subject to claims. Although every state has its own laws regarding premises liability, each state may have their own definitions of coverage. This could include licensing, invited, or trespassers.

What is Premises Liability?

The property is granted permission to both the invitee and licensee visitor. The licensee visitor is invited, but not invited. Legally, the invitation to use the property signifies that you are committing to the property’s safety.

Although they may not be invited, a licensee can still expect reasonable safety. A licensee could be a delivery driver, utility worker or other person who needs to access your property in order to perform their job.

Trespassers have limited rights. If a trespasser gets hurt while on the property they cannot collect from the owner. In most states, however, the property owner must maintain the property in a satisfactory manner and not attempt to harm the trespasser with traps.

There are exceptions to this rule, however. Trespassers should be warned of any non-obvious dangers. This could be an indication for a swimming pool considered “attractive nuisance” by children. In this instance, property owners would be held to a higher standard of care.

It is essential to read the state laws in order to fully understand your state’s liability as a business owner. Visitors, including those who are trespassing on your property, may be liable to you for a high degree of care and safety.

Types of Premises Liability Exposures

When a business is addressing premises liability, there are many types of exposures. Some examples of exposures include but are not limited:

  • Slip and fall accidents: It doesn’t matter if the floors are slippery because of a wax coating or because water was spilled, this can be a liability for the business owner.
  • Inadequate Maintenance: Even something as simple as a railing that needs new bolts could lead to serious injuries or liabilities.
  • Low security: Businesses are liable if they do not have the security measures or personnel in place to stop people accessing high-risk areas.
  • Defective conditions If someone falls from a chair that has been found to be defective and then hurts themselves, the company is liable.
  • Escalator and elevator accidents: A business owner might be held responsible if someone falls off an escalator without warning and is then injured by the belt that feeds back into the system.

How Premises Liability Insurance Works

Premises liability protection protects business owners against claims arising from property damage and premises injuries. This coverage can be purchased separately or as part of a General Liability Policy. The limits can be purchased separately and are often greater than the general liability policy limits.

Important Exclusions from Premises Liability Insurance

Premises liability does not cover all types of injuries or property damage that may be caused on the premises. These exclusions include:

  • Professional negligence: An error or omission in the care of a professional can result in an injury to a person.
  • Premises liability: Employee injuries Workers’ compensation insurance covers them.
  • Own property of a business: To cover losses to their property, a business must have commercial property coverage.

What are the Covered Shared Premises?

Sometimes, a business owner might lease property owned by another company or person. This can complicate premises liability. The business lease generally transfers all liability to the business, and away from the lessor. The business and its customers are entitled to reasonable care regarding the safety and maintenance of the property.

In cases where the business owner expects reasonable care, the property owner is liable. Parking lot maintenance might not fall under the business owner’s responsibility. Therefore, the property owner would be liable. Elevators and escalators are also the responsibility of the building owners.

Premises Liability Insurance vs General Liability Insurance

Although they may be mistakenly referred to as one and the same, general liability insurance and premises insurance are not. Although premises liability insurance is a part of a general policy, it can also be included in broader coverage.

Premises liability insurance protects against claims that a property isn’t maintained properly or a visitor is injured. General Liability Insurance provides greater protection, including personal property coverage and claims that result from business operations. For example, a homeowner might trip on a handyman’s tool bag and get hurt.

Why do you need a standalone Premises Liability policy?

If you require greater protection for your property, a standalone premises liability policy is a good choice. This is often the case with vacant land, or land that will soon be built on. Contractors’ insurance covers other general liability claims. A premises liability policy would include builders’ risk insurance.

Is General Liability Insurance enough?

A general liability policy that covers premises liability and other issues is acceptable for most small-business owners is fine. If you feel that the limits of the general liability policy are too restrictive, you can get an umbrella policy or increase them.

Bottom line

You, as a business owner are responsible for providing a safe environment for customers and employees. You are responsible for any injury claims that may occur on your property. However, you could also be liable for any lawsuits brought against you by fraudsters. Premises liability coverage protects you against fraudulent and real claims.

LegalZoom Step-by-Step Guide to Setting Up an LLC

LegalZoom, an online legal service, assists you in the LLC (limited liability) registration process. Although you can register your LLC online through the state website, many business owners prefer to have LegalZoom assist them.

LegalZoom may offer you questions or other products that you are unsure about during your LLC registration. We discuss what LegalZoom offers and explain why you should pay.

Before you begin reading the following information, you might find it helpful to visit the LegalZoom LLC registration page. Follow the instructions:

Visit LegalZoom

1. Select an LLC name and confirm it’s available

LegalZoom allows you to start your LLC by entering your business name.

If the name is still available, your LLC registration will be valid. You will need to register another business name if the name is not available.

These are the requirements that you will need to follow when naming a business.

  • Be unique – Your LLC name should not be identical to any existing LLC in your state.
  • Do not confuse customers. Don’t give your LLC a name that is similar to another competitor’s to confuse the public or to try to get customers.
  • Avoid restrictive terms

 

Tip If your business name has not been selected and you want to verify that it is, LegalZoom offers a free service in which they will contact the state government to confirm that it is available. Once they have made their determination, which takes around 15 minutes, a LegalZoom representative will contact you.

 

2. 2.Define the purpose of your LLC

After you have been notified that your business name has become available, you will be asked to answer some questions about when you plan to launch your business.

Is this your first LLC:

And what industry your business is in:

LegalZoom asks these questions to provide you with more relevant information and services throughout the process for your particular business.

3. Indicate whether you’ll hire employees

LegalZoom will use this question to find out more about you and offer additional services. This will not affect the LLC.

4. Identify a Registered Agent

Next, you will need to answer the question: Who should you choose as your Registered Agency (RA). Registered agents are your official contact for legal and other state documents.

You could choose yourself as your own RA. However, if you do so, you or an employee must be available Monday thru Friday from 8 a.m. to 5 p.m. to receive a legal document such as a summons or subpoena. If you’re not available during this time, you could lose your LLC status with the state.

LegalZoom can act as your Registered Agent if you are unable to be there or if you prefer LegalZoom to do this for you. Many business owners find that having an outside RA provides them with peace of mind knowing they won’t lose any important documents. LegalZoom acts as your registered agent for $249 per annum.

5. Choose from the Recommended LLC Documents

The LegalZoom LLC sign up process for “Essential Documents”, consists of three parts: the Operating Agreement, employer ID number (EIN),, as well as business licenses.

Here’s a further breakdown of the “Essential Documents” LegalZoom is offering:

LegalZoom’s Essential Documents Best for Additional cost
Operating Agreement Business with multiple owners or one who wants to modify the rules of their LLC $99
EIN and Operating Agreement If a small business plans to hire employees or elects to be taxed like a corporation, it can opt to be subject to the corporate tax. $159
Operating Agreement, EIN, and Licenses Licenses and permits are required for small businesses to be able to operate. $199

Operating Agreement

Operating agreements are used to describe how companies run and can help prevent or resolve disputes. Although most states do not require LLCs for operating agreements to be filed informally, many states require that one is kept on file with your company.

No matter what state requirements, we recommend that you draft an operating agreement for your LLC in order to establish your management structure and remove uncertainty. An operating agreement can be purchased through LegalZoom at $99 when you file for an LLC.

You can still purchase LegalZoom through your online account if you decide that LegalZoom is the right service for you.

Employer Identification Number

The EIN (Internal Revenue Service number) is what the IRS uses to identify your company. The IRS website allows you to request an EIN for free. LegalZoom can help you skip this step if you prefer. The EIN is a crucial legal step in starting a business. Without it, you can’t file taxes.

Business License

LegalZoom can help you determine the right type of permit or license your business requires. This is a great service if you have multiple licenses that your business requires from different government agencies.

 

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6. Select Additional Business Services

The last step in selecting the pricing package for your LLC is to look at LegalZoom’s other business services, Smart Employer or Total Compliance. You won’t likely see Smart Employer services if you haven’t stated earlier that you don’t intend to have employees.

Smart Employer

The Smart Employer legal package includes unlimited legal forms, legal advice, tax consultations, and legal advice. The Smart Employer legal package costs $39.99 per calendar month after a 10-day trial.

If you believe you will have legal questions for an attorney, or if you will need to create customized legal forms, this may be the right package for you. You could use the legal forms for employment, client, or vendor contracts.

Total Compliance

The Total Compliance package protects you from missing renewal deadlines for LLCs. The state may charge a late fee if you miss a deadline. You may also lose your LLC status if your LLC expires more than six months after the renewal deadline.

7. Select an LLC Package and Pay

LegalZoom LLC costs vary depending on the speed you need your documents filed and what your stats filing fee is. The state filing fee is $40 in Kentucky and $500 in Massachusetts.

If you’re already in business and have customers, you likely want an expedited filing to get your personal assets protected as-soon-as-possible. If you haven’t started your business and can wait for your filing, choose the Economy package.

LegalZoom LLC Packages at A Glance

Economy Standard Express Gold
Pricing $79 + State Filing fees $329 + State Filing fees $349 + State Filing fees
Name check and business filing      
Articles of Organization      
LLC Next Steps Guide      
Peace of Mind Review ™      
Lifetime customer support      
Financial Account Authorization Letter      
Deluxe Organizer N/A    
Official Seals and Certificates N/A    
LegalZoom VIP Processing N/A    
Rush Processing with the Secretary of State N/A N/A  
Express Shipping N/A N/A  
Learn More Learn More Learn More

8. 8.

After you have selected your pricing package, you will need to give the final details to create your LLC. Although the information required will vary from one state to another, generally it is your business and personal information. LegalZoom will also ask you for a payment method.

After you have selected a package, LegalZoom will ask for the following information:

  • Your primary business address: LegalZoom will list any state-specific requirements.
  • You can form a Professional LLC if you are a licensed professional in medicine, law, accounting or architecture.
  • End date of your fiscal years. This is usually Dec. 31. If your business receives large amounts of revenue at one time or another, you may need to consider a different date.
  • Dissolution Date: Choose a dissolution day if you have a temporary business, such as one that was formed to attend a particular event. Your LLC doesn’t need to have a dissolution date.
  • Names of the owners: Enter the names of each owner. If you are the only owner, please enter your name.
  • Ownership interests Describe whether ownership is expressed in units or percentages. Next, list the interests of each owner and select the type of consent required to transfer ownership.
  • Management structure: Indicate if your LLC will be managed by one owner or multiple owners. This will decide who can open bank accounts, sign checks, and bind the LLC.
  • Information about your EIN: LegalZoom will obtain an EIN for you LLC. Please provide details about your business. This information will be required if you decide to apply for an EIN yourself.
  • Contact information: Name, phone number and Social Security number for one of the LLC owners, managers, presidents, or employees to the IRS.

Once you have completed the information, hit submit and LegalZoom begins preparing your documentation. Once it is completed, it will be sent to your Secretary Of State. LegalZoom will notify your via email once the application has been approved. After you have received the notification, your LLC has been set up and you are ready to launch your business.

LegalZoom to Form an LLC: The pros and cons

LegalZoom is a great tool to create an LLC. However, it may not be the right choice for every business. LegalZoom is a great tool that can help you save time and money but it doesn’t replace an experienced attorney.

LegalZoom’s Pros and Cons for Forming an LLC

  • Full service LegalZoom’s add on services can assist you with all aspects of your initial filing, including tax, legal and compliance issues.
  • Time-saving: LegalZoom helps you save time by handling all the paperwork required to form your LLC.
  • Less expensive that hiring an attorney. Attorneys can charge between $150 and $500 per hour. LegalZoom can help you save money by organizing your LLC and handling other legal matters.
  • Additional support and reminders. LegalZoom’s add on services can help you recall important filing dates and answer any questions you may have about running your business.

LegalZoom to Form an LLC: The Cons

  • A limited amount of expertise is No one can replace the knowledge and experience of a qualified business lawyer.
  • More costly than other services: It costs $79 to form a LegalZoom LLC, plus filing fees. Similar services are available on other websites for filing fees (as part a trial), or $49 plus filing fees.
  • More time to respond: Although LegalZoom claims a turnaround time of 7-10 business days for their Express Gold package with a fast turnaround, many customers complain about slow service and long processing times.
  • Potentially confusing. LegalZoom’s Add-ons can be helpful, but they can also be confusing if your aren’t sure which services you require to form an LLC. If you choose to add on services such as tax consulting or registered agent, pricing can become confusing.
  • Limited customer service: Customer feedback reveals that customer support can sometimes be difficult to reach or unhelpful.

Bottom line

You will need to be familiar with state requirements and tax obligations in order to set up an LLC. Although you can register your company yourself, the process can be time-consuming and confusing. For $79 to $359 plus filing fees, you can save money by forming a LegalZoom LLC within 15 minutes.