MAKE MONEY ONLINE: THE BIG GUIDE

Welcome to the exclusive two-part series on starting your own online venture! Do you have abrilliant idea that can bring in revenue (and profit!) through the world wide web? Perhaps you already are active on the internet, but want a way to bring everything under one umbrella business for practical and legal purposes?

There are many ways to start thinking about running your own business… and being a business owner is something that will become increasingly popular as the years go by. As the owner of two small businesses, I have been through the process myself, and I would like to help YOU do the same! Don’t let anyone tell you that running a business is difficult, you just need to know where to go and how to organize yourself. Let’s start in with the basics, and then in part two we will cover more specific goals and structure.

Forming an Idea that Works

If you are looking to start a business, what’s the first thing you will need. That’s right…a business idea! It sounds a bit funny, or even a bit obvious, but solidifying your idea will probably be the biggest step you will have to take. As an example, I am going to use Bullish Bankers… which is an online financial research community that I formed with some friends from Penn State University.

It’s one thing to say “okay, I am going to start a financial business online“… but it is entirely different to lay out exactly what you will be doing. Obviously, the point of owning a company is to make money (assuming you are for-profit). Therefore, you will need to first consider your competitive advantage. What do you have to bring to the table? If you are planning on going in direct competition (i.e. doing the exact same thing as another business), you better be more experienced and able than your peer to be able to win. I would prefer to be in a niche like financial services, but have some kind of spin that makes my business unique. That is what we did with Bullish Bankers LLC., and it has worked thus far!

When you are brainstorming your business idea, don’t think solely about what you are doing… make sure that you can be profitable in your space, and that you have some kind of edge over your competition (whether that be uniqueness or execution skills).

What Kind of Business is It?

When thinking about eBusiness, one has to understand that being an “online business” isn’t a classification. In fact, now that so many companies are moving to internet-based revenue streams… it is essential that you understand where you are on the map. Additionally, if you are a business owner… you will need to be able to quickly identify to potential partners, employees and clients exactly what business you are in. For example, if you walk into a bank for a new account and tell them you are an “internet” business… they are going to want more information.

Furthermore, it is important to have a classification for what you do for your own sake. Too many people come up with business plans and think that they can do everything at once. If you are going to focus on selling cars, don’t also try to offer marketing services. Not only will your business industry give your clients a better idea of what exactly you do, but it will help you to keep from over-extending yourself. Staying with your niche industry is always the best way to form and operate a profitable business… don’t try to do too much at once.

Naming Your Business

Coming up with a name for your business is a very important part of your new online venture… but it shouldn’t be a deal breaker if somebody has already chosen the name that you wanted. That being said, I would have to say that the name your company carries will be important in lending authority to your name. I would suggest sitting down with a pen and a notebook to jot down ideas as they come to you. Go ahead and take an hour to come up with some interesting ideas, then pick your favorites. I would suggest using some “trigger” word that would immediately attach the name of your business to what you do. For example, when we selected “Bullish Bankers”… that is a name that immediately brings up the thought of Finance to people in the industry, so it is much easier to get your foot in the door.

Checking to see if your name is available can be a bit tricky. The problem here is the you register your corporation with the State department where you reside… so you will need to check with the State to see if your business name is available. This can be solved relatively easily with a search through Google for something like “California business name availability search.” Try out some combinations, or simply call your State department to figure out if you are in the clear or not.

Recruiting Partners and Stakeholders

Alright, so by now we have the idea, the name and the general business strategy set in stone. All we need right now is a helping hand. Sure, you can opt for what is known as a “sole proprietorship” and go it alone. In this case, ignore this section entirely. However, I would actually recommend that you enter into some kind of partnership among people you know, and people that are interested in the business. We will discuss the actual contractual part in the next part to get things legalized… but for now you should consider recruiting a few partners or private investors that are interested in the success of your idea. Nothing jump-starts a business like a little buying interest to keep you motivated to succeed!

Okay, so we’ve covered the thought-process behind launching your own eBusiness. Now that we have everything in place and ready to go… let’s turn to the second half of this report and start considering how to actually file and register all of your ideas legally. It is important to have everything ready to go before you start… which is a big reason behind why I laid out this “idea machine” technique before actually talking about registering your business.

Do you have that million dollar idea? If so… let’s figure out exactly how to get up and running. Check out part two of this series on forming your own eBusiness, and we’ll continue this lesson to the point where you can legally operate as a business!

Part Two

Now that we have our corporate strategy set up and organized, we need to talk about the real “nitty gritty” details of how exactly to form your business. Everybody talks about it, but it seems like something that is so difficult to do that many people don’t even try! Not the case. Starting a business on the internet, an eBusiness if you will, is one of the more simple processes out there. All we really need is some legal protection under an LLC or an S-Corporation to start off; then, we should set up some financial agreements to lock in our business security. Let’s get to it! 

Limited Liability Corporations (LLC.) and S-Corporations (Inc.)

One of the most daunting tasks in operating an eBusiness online is choosing between the two types of corporate structure: Limited Liability Corporation (LLC.) or S-Corporation (Inc.). There are many similarities and differences between the two… but in the long run, the choice is really based on a business-specific case. In the terms of online businesses, you probably won’t want to try out anything but an LLC or an S-Corp for practical reasons… so let’s stick with the two.

There are many examples of both businesses on the internet, and the differences can sometimes be blurred. When you think about a Limited Liability Corporation or S-Corporation, both function as “pass-through” entities for your business. What this basically means is that any taxation for the business can be “passed-through” to their owner’s income statements for legal purposes. This avoids the problem of double-taxation that you would run into with anything else. For Bullish Bankers, we took the LLC. for flexibility and practicality, and became Bullish Bankers LLC. My friend Tyler Cruz (whom many of you know) chose to get an S-Corp for Merendi Networks because of savings on employment taxes among other things.

The Bottom Line Decision:
I recommend Limited Liability Corporations because they are a lot easier to operate. They do not have to be operated by a board of directors like an S-Corp, and also offer flexibility in profit-sharing and a more lax ownership structure. If you would prefer the rigid and set-in-stone rules that come along with massive employment… go with the S-Corp. If you would rather feel your way through it all with a more allowing structure… go with the LLC. You can read more details in this article if you need more information.

Registering Your Corporation

Now that you have selected between an LLC and an S-Corporation… it’s time to go ahead and actually register your business. How much will this cost? Actually, it is only around $100 to do it yourself.  The price will vary by state, but in Maryland (where I registered both of my small businesses) it was just $100 for registration filing for life. Not a bad deal for thousands in potential tax savings, eh?

So here are the two routes:

• Hire a Professional: If you are just too lazy to dig around on your State Department website and do the filing yourself (which is ultra-simple), you can always hire someone and pay them fees to do it for you. Sure, this will run you around $200 (double) for the filing costs and the service charge… but it is also a lot easier. I’d recommend using LegalZoom.com to handle this. I have never used them myself, but have heard only positive remarks toward their service.
• Find the Forms and File: This is really very simple to do, and is just a one-form contract. The best way to do anything nowadays is to search through Google. So search for your “State filing an LLC.” or “State filing an S-Corp” and you should find the documents available noproblem. Not a lot is required on these forms, just your name, business name, address and a check for the amount required. They will be called the “Articles of Organization” or “Articles of Incorporation”. For an example, see how easy the form for Maryland is!

Filing with the Internal Revenue Service (IRS)

To save some time, we are going to go ahead and file for an Employee Identification Number (EIN) from the IRS. The reasoning behind this is essentially the same reason why individuals carry Social Security Numbers. This is a number that you will need time and time again, so it is better to get it now and get it over with.

Getting an EIN from the IRS is one of the quickest and easiest steps you will make, despite how daunting it seems. It is completely free, and you can apply for an EIN online and get your EIN number almost instantly via email. Then, just print out the forms to have a physical copy or two. You’ll need the EIN if you sign on as an affiliate for any company or if you need to open a bank account, among other things.

Setting Up a Banking Account

Many banks nowadays 

emphasize small businesses. Because banks function off of deposits and loans… they actually do want your money. Check out your local banks or nationalized chains and ask them about their banking plans for small businesses. You are going to want a bank with checking… and if you are planning on running a lot of transactions you might want to pay a little extra for the flexibility. I use PNC Bank for my operations through both LLCs that I own.

Once you set up a bank, you will have something to link a PayPal account to if you choose to do this. As an online eBusiness, I trust PayPal to handle most of my transactions. Plus, since this is legally separate from your banking account, you will get as many free transactions as you want! This PayPal-Bank combination is pretty standard nowadays, and it is how a lot of us operate. At the very least, you need that bank account to have checking capabilities so you can pay the bills under your company name.

Protecting your Business with Legality

We’re almost done! We’ve got everything from the company registration (takes a month or two to clear) to a bank account to our Employee ID Number from the IRS. All we need at this point, is a few second checks against any potential liability issues that might arise. I would recommend getting together a Privacy Policy and a Terms of Service for every website that you administer under your eBusiness. We need a way to ensure that nothing goes wrong… and if something does, you are protected against it. Writing a Privacy Policy and Terms of Service can be a time-drawn process, but it is well worth it in the long run. You can take a look at the Privacy Policy and Terms of Service from Bullish Bankers LLC. if you need an example of how to correctly write one of these to cover your bases.

Second to the online forms to secure your liability downside, if you are working with partners you should draw up a charter. This is just a simple document that you can write yourself delegating tasks and the corporate structure. We’ll call this a Manager’s Agreement. One thing about the law that many don’t understand, is that you can effectively write anything yourself and have people sign it to be legally bound… so long as they are fully aware of what they are signing and consent to the terms. Get in Microsoft Word and write up a clause… perhaps delegating who is the CEO and who is the HR Representative… perhaps talking about ownership, who owns what % of the business… or even talking about your voting process. You should always draft something like this and have it signed early if you are running a corporation to have everything set before you hit the ground running.

Bottom Line:
Whew! That’s a lot of paperwork, eh?  Hopefully, after reading through this two-parter… you realize that starting your own business really isn’t too much work when it all comes down to it. After all, once you get past the initial set up, your business will carry a considerable amount of added weight, and people will downright trust you more. An added bonus to all of this is that you no longer have full liability for loss because of your filing with the government. I’d say it’s a good idea overall.

Hope you enjoyed this lesson on forming your first eBusiness. Feel free to contact me with any questions, or just drop a comment. Oh, and stay bullish on the net!

From | Netfool

How to Invest $20, $100, and $1,000 (and More)

Got only $20 to put away right now?

It may not sound like much, but you can use it to buy shares in Intel. Or Johnson & Johnson. Or Harley-Davidson (you rebel). And those are just a few of more than 1,000 options available. What if you’ve got $100 — or $1,000? Your options are even greater.

We’re not here to tell you where to invest your money. We won’t lay out a handful of stocks on a “buy” list. But what we can tell you is how you can invest your money — the mechanics of investing small, large, and medium amounts of cash. We can even help you choose a broker.

How to invest $20
Let’s start with $20. We’re going to assume that you’ve already paid off any high-interest debtand that you have some money stashed in a safe place (like a savings or money market account) that you can get to quickly in case of an emergency expense. Now you find yourself with a little extra dough, and you want to begin investing for your future.

Is it even worth it to invest such a pittance?

Heck yeah it is! One of the best ways to invest small amounts of money cheaply is through Dividend Reinvestment Plans (DRPs), also known as Drips. They and their cousins, Direct Stock Purchase Plans (DSPs), allow you to bypass brokers (and their commissions) by buying stock directly from the companies or their agents.

More than 1,000 major corporations offer these types of stock plans, many of them free, or with fees low enough to make it worthwhile to invest as little as $20 or $30 at a time. Drips are ideal for those who are starting out with small amounts to invest and want to make frequent purchases (dollar-cost averaging). Once you’re in the plan, you can set up an automatic payment plan, and you don’t even have to buy a full share each time you make a contribution.

Drips may be one of the surest, steadiest ways to build wealth over your lifetime (just make sure you keep good records for tax purposes). For more details on Drips, see “What if I can only invest small amounts of money every month?“

How to invest a couple of hundred bucks 
So you’ve weeded out all the wooden nickels from your spare-change jar and have tallied up a few hundred bucks. Instead of blowing it on snack food and Elvis memorabilia, consider investing it in an index fund (the only kind of mutual fund Fools like). An index fund that tracks the S&P 500 is your ticket to an investment that has traditionally returned about 10% per year.

Some index funds require as little as $250 for you to call yourself an owner. This low minimum is usually restricted to IRAs (Individual Retirement Accounts). After your initial investment, you can add as much money as you like, as frequently as you like, with no additional costs or commissions. You purchase index funds directly from mutual fund companies, so there are no commissions to pay to a middleman.

If you have a few hundred dollars to start with, then this is a great, low-cost way to establish an instant, widely diversified (500 companies!) portfolio.

How to invest $500 
Once you’re up to $500, your investment options open up a bit more. You can still buy an index fund, and now you’ll have your pick of fund companies that require higher initial investments. This freedom will enable you to shop around for a fund with the lowest expense ratio.

You should also seriously consider opening a discount brokerage account. You’ll want to focus on the account option that best serves your needs; some accounts require a minimum initial deposit, and some don’t. That means you can open up an account with whatever investing money you have available, and start researching and perhaps purchasing individual companies. (Or, if you’re enamored of index investing, you can easily invest in Spiders, a stock-like investment that mimics the performance of the S&P 500.)

The key here is to keep your costs of investing (including brokerage fees) to less than 2% of the transaction value. So if you’re planning to add to your position in stocks a few times a month, a Drip or an index fund may still be the way to go.

How to invest $1,000-plus 
What can you do with a grand? Obviously, with $1,000 you can open up a discount brokerage account, but look at the rewards if you can scrape up an additional $1,000 a year to add to your original investment.

Say you’ve got 40 years to retirement. If you start with $1,000 and invest an additional $1,000 each year, and your money earns 10% annually, then when you’re ready to retire at age 65, you’ll have $532,111.07. That seems worth it to us. If you have earned income, you can set up a Roth IRA, and you won’t even pay any taxes on that $532K when you withdraw it. (As always, your mileage may vary.)

Again, even at this level, the key is to keep fees from eating up your earnings. So make sure that the costs of investing (including brokerage commissions, stamps to mail in checks, and books that help you learn to invest) are less than 2% of your account’s overall worth. With small accounts, that can be a challenge, but with such low commissions being offered by discount brokers, it’s definitely doable.

From http://www.fool.com/

What’s Paypal? How to create a Paypal account

The Paypal solution of payment is used on the Fotolia web site for three reasons:

• To allow users to purchase credits by using their Paypal account [Learn more]
• To pay commissions to photographers [Learn more] 
• To allow users to convert credits into cash from affiliation revenue.

In these three cases, customers and photographers must have a Paypal account. We will outline how to open a Paypal account. 

Paypal is a free solution which allows users to transfer money to anyone with an email address or securely purchase items from internet sites (purchase photographs from Fotolia for example) In addition Paypal customers may receive payments to their Paypal account (Commission payments to photographers or ebay sales for example). At anytime Paypal customers may transfer money to their regular bank account without any Paypal fees (for sums of more than $100, $1 of expenses if less).

Paypal is a subsidiary of e-bay, one of largest companies on the Internet.

To create a Paypal account, click on your country below to get started:

• If you are American: Paypal US
• If you are Canadian: Paypal Canada
• or Paypal Worldwide

From |http://blog.fotolia.com/us/guideline/payment/paypal.html