Even the best online business ideas need sound legal and financial foundations if they’re going to succeed. Here are the basics you’ll need to consider when creating an online business.
Register your business
The first step to building an online business is applying for an Australian Business Number (ABN), opens in new window - the unique, 11-digit number that will always identify your business.
Unless you’re operating under your own name you’ll need to register a business name, opens in new window. Try to come up with a few options in case your favourite is already taken. You can check for availability with online searches and ASIC, opens in new window, while a company like NameChk, opens in new window can help with domain names and social media sites.
Check whether you need a license
You’ll need a licence or permit to carry out certain activities online, from the obvious like selling alcohol to using music on your website. The requirements vary from business to business and state to state. The Australian Business Licence and Information Service, opens in new window can help you find and apply for any licenses that you may need.
Create a professional-looking website
Invest in quality
Your website is your shopfront – if people aren’t hooked by their first impression they’re unlikely to look inside. They also expect the purchase process to be seamless and simple. This isn’t a place to cut costs. Your success could depend on how professional your website looks and how easy it is to navigate.
Stay in control
Unless you’re highly skilled yourself, it's worth investing in a professional web developer. Before they start work, have them sign a contract setting out things like delivery timelines, how and when you’ll pay and, most important, that you’ll own all of the codes and passwords so you can easily use a different developer in the future. If you’re entering into a contract with a web developer, it’s a good idea to get legal advice so you understand each parties’ rights and obligations.
Secure payment options
Consumers are wary about sending money to websites they don’t know so make sure you have a clear returns policy and spell out your security processes. You also need to offer effective and reliable payment options. For example, NAB’s eCommerce and online solutions provide benefits such as same-day settlement, sales in multiple currencies and the highest levels of security.
Find the right finance
Starting an online business costs less than most physical alternatives. However, you'll still come up against some expenses from web development, branding and marketing to insurance and software subscriptions. Starting an eCommerce business from scratch also takes a great deal of time and effort. You may need to cover an income gap if you decide to leave your regular job to focus on making your business a success.
Various financing options include venture capital, crowdfunding and private investors, or so-called business angels. All come with pros and cons. It’s important to get some independent legal advice before making any decisions.
Alternatively, your bank should provide a range of financing options. For example, NAB offers secured and unsecured business loans and overdrafts as well as invoice finance to help with cashflow. You’ll also need the transaction account best suited to your particular needs – this personalised recommendation can help.
With careful thought and the right advice, you could soon be running your own successful online businesses. Remember that NAB has a team of specialist bankers and advisers ready to help.
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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.