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Online Business Basics: 1

Online Business Basics: 1

November 10, 2005
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Will virtual reality boost the paysite market?
Yes, it will soon
  39.66%
Yes, but in a few years
  36.87%
No
  23.46%
Out of 179 votes. Results based on votes submitted by members of XBIZ.net social network.

" It's not what you make but what you get to keep. "

Whether you're looking to establish a virtual storefront for your offline products and services or you want to launch an "online only" operation, success does not require a formal business education. But it does require entrepreneurial skills and an understanding of the proven steps and strategies that will ease the process for you regardless of what you intend to offer.

The following is a brief overview of 12 important steps to take, considerations to be aware of and factors that will impact your success. While many of these issues are intertwined, I've separated them as logically as possible. They should provide a helpful guide to further research before launching your online business:

  • Have a plan. For many entrepreneurs, having an idea is all that's needed. Time and experience shows, however, that the more effort you spend on planning, the better the results will be. While having a formal business plan always is the best choice, many operators - especially first-time entrepreneurs without formal business training - will find the process daunting. While the details of business planning are well beyond the scope of this article, any plan is better than no plan.

    Consider what it is you want to offer: How does it stand apart from what your competitors offer? If it doesn't, then why would someone pay for it? Who are your competitors? What makes them successful? How saturated or mature is the market? Make a list of factors and write them down.

    It doesn't hurt to seek help with this task. When it came time for me to write my first business plan more years ago than I care to admit, I sought the help of the U.S. Small Business Administration, which assigned me a mentor through SCORE - the Service Corps of Retired Executives. A former vice president of Monsanto Chemical took me under his wing, helped me write my business plan and was available to introduce me to a network of business professionals that could provide legal, accounting and financial help, including direct capital investments in my business. This was invaluable help - and it was free. Make good use of SCORE as well as any programs offered through local colleges and universities - even if you must be vague about your business.

  • Consult an attorney. While attaining qualified legal advice should be one of the first steps in any new business venture, there are few other arenas where this is such a vital concern as it is in the adult entertainment industry. Not only will you have general concerns about legal requirements such as corporate structuring, copyrights and trademark protection, but the issues of obscenity, hostile jurisdictions, federal record-keeping requirements and myriad other concerns need to be addressed. At the very least, you should budget for a comprehensive website review by a qualified attorney well versed in online adult law.

  • Consult an accountant. In addition to your attorney, an accountant can help you determine the best corporate structure for your new online venture. A good accountant will help you formulate the financial projections for your business plan and can also assist you in raising capital, either through banking contacts or through "angels" that will provide private financing, often for an interest in the company.

    New business owners, especially the tech-savvy type most likely to begin an online venture, might mistakenly believe that a copy of QuickBooks or some other accounting software can take the place of a qualified accountant. These tools should be thought of as supplements rather than replacements. A good accountant will help you set up your record-keeping software to get the most out of it and make the best use of it come tax time. Your accountant also is a valuable asset in limiting your tax liability. Remember, "It's not what you make but what you get to keep."

  • Select a domain name. One of the most important considerations in starting an online business is the choice of a domain name. A good domain name will be short, easy to remember and reflect your offerings. Consult with your attorney over possible choices regarding your ability to trademark the name, and be aware of the misleading domain name provisions of federal law that prohibit adult websites from using domain names without the words "sex" or "porn" in them. While this felony law has been rarely enforced, there is at least one adult webmaster serving jail time in Florida for violating it.

    Regardless of all of the hype surrounding alternative top-level domains (TLDs), nothing can replace the "legitimacy" of a dot-com. If you must use a multi-word domain, then the hyphenated version (i.e. Word1-Word2.com) is the best bet as it is a superior choice for search engine placement. You also will want to register the unhyphenated version, as well as any common misspellings, in order to protect and reinforce your brand.

  • Select a web host. This is one area that you really can't afford to skimp on. Price should be your last consideration; quality support, consistent uptime and redundant connectivity are far more important than price. At the same time, you shouldn't invest in more capacity than you need. While all web hosts will be happy to upsell you to a more robust package, once you're tied into a contract, being able to downsize your plan to cut - and stop paying for - unused capacity may be another thing altogether.

    There are many considerations when choosing a web host, and you should discuss your needs with your design and programming team. For example, you might require database connectivity, certain add-on server modules, or even a dedicated streaming server for video intensive applications.

In part two, we'll look at choosing a billing mechanism, building your website and beyond...


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