Photo by Brooke Lark on Unsplash
Written by: Mitch De Guzman
One of the most effective ways to start a business is online, through the internet. Getting your business online is considerably more manageable now than it was a few years ago. Thanks in large part to technological improvements.
But aside from establishing a business page on social media, you need to also legally register it.
Some Online Business Statistics
With the increased reliance on the internet and cheaper overhead costs, it’s no surprise that online businesses are becoming more popular. Aside from being simple to set up (because you can do it at home), it also allows you time flexibility.
Furthermore, online purchases climbed by 57% in the first half of this year. That is why more Filipinos are venturing into entrepreneurship.
These statistics can energize you to get your business off the ground. However, while everything can be simple, you must still consider crucial elements before commencing your project. In this blog post, we’ll go through the most important aspects of launching an online business.
HOW TO START AN ONLINE BUSINESS
Before you do anything else, you must first determine whether your business idea is viable. Conduct a feasibility study to ascertain how your concept will be accepted. If it is favorably received, the next step is to create a business plan.
The business plan is the most crucial step in starting a business, whether online or offline. However, many people overlook this step. Please don’t do the same! A unique idea, product, or service is not the beginning and end of it all. While it will be the primary drawcard, it is merely one component of the overall strategy.
And as a reminder, you must ensure that you have fast and reliable internet for a seamless researching experience.
Components of a Business Plan
A sound business plan is generally extensive and detailed. It also requires dedication as it contains all information about the company, such as the industry type, promotional strategies, funding, workforce, and other operational procedures.
Here are some pointers for creating a business plan:
- Have a clear goal in mind.
- Conduct keyword research.
- Determine your target market.
- Assess your competitors.
- Identify your financial objectives and projections.
- Set a budget for it.
- Define the operational and management structure
- Describe your marketing strategy.
- Keep it professional and brief.
HOW TO REGISTER AN ONLINE BUSINESS
Due to the growing online business trend, the Philippine government has begun to track down online business activities and warned them to follow the regulations and tax rules. Yes, online businesses are not excluded. If you generate revenue, you must pay the appropriate taxes to the government. It’s only fitting to do so, and it’s also a good idea to follow the rules and regulations to avoid penalties.
There are four steps to follow in formalizing your business – register your business name, get a business clearance, apply for permits or licenses, and tax registration.
A. Company or Business name
Before filling out the registration form, make a list of at least five names. You can search online for company name ideas and check the availability on the respective government portals. A search query will also give you an idea of how your business would fare.
The Department of Trade and Industry (DTI) is for small business owners or sole proprietorship. If your selected business name is not yet in use, you can proceed with your application. After passing the validation procedure, you’ll be given a reference code that you’ll need to finish the transaction.
If you intend to form a partnership or corporation, you must register with the Securities and Exchange Commission (SEC). You’ll need a lawyer to facilitate your application because you have to draft articles of incorporation and by-laws.
B. Barangay Clearance
Following your business name registration with the DTI, you will need to obtain a business clearance from your local barangay government to prove your residency and good standing. You must submit a photocopy of two valid IDs and proof of residency (a lease contract or a land title). Bring the original IDs with you for verification.
C. Municipal or Mayor’s Permit
The application process is quite identical to that of obtaining a barangay clearance. All you need is to submit all the business documents (DTI Certificate, barangay clearance, two valid IDs, and evidence of domicile) with your completed application form at the City Hall in your area.
However, you will be required to submit extra papers, like an architectural layout, which will be subject to inspection before the permit is issued.
D. Tax Identification Number
The most essential step in becoming a legitimate online business in the Philippines is to apply for tax registration. It’s also the most time-consuming technique, especially now because the Bureau of Internal Revenue (BIR) limits the number of people entering the premises due to health constraints.
Procedure for Filing Tax Application:
- Download and complete the tax registration form (BIR Form 1901) and submit the completed registration form to your respective Revenue District Office (RDO) along with the necessary business paperwork such as DTI, barangay clearance, business permit, valid IDs, and evidence of domicile.
- Pay the registration fee at any BIR-accredited bank and return the payment slip to your RDO.
- On the day specified by the BIR, claim your Certificate of Registration and the “Ask for Your Receipt” sign. However, you may be required to attend a tax filing seminar before earning your certificate of registration.
- Register your accounting book.
- Apply for a Printing Authority for Invoices.
Suppose you intend to hire workers for your internet business. In that case, you must register as an employer with these government agencies: Social Security System, Philhealth, and Pagibig, and make the required contributions.
STARTING AN ONLINE BUSINESS
You can now set up your e-commerce store after finishing the business registration process. Since constructing a business website takes time, you can do it simultaneously with the registration procedure.
While many online businesses operate purely on social media like Facebook or Instagram, investing in your own business website increases the credibility of your brand to your customers. Furthermore, you won’t be affected if the social media platform owners decided to shut it down.
There are three options for establishing an online presence for your business:
- Promoting and selling through online shopping websites
- Building an e-commerce store
- Creating a portfolio website
Let’s take a look at each one individually.
Online Shopping Sites
If you want to launch your online business without your own website, third-party eCommerce platforms are the way to go.
You can sell your products on Lazada, Shopee, or Carousell (formerly OLX). These third-party eCommerce sites make it easier for online retailers because of their vast customer base and readily available payment channels and delivery services. Furthermore, they run their own promotional initiatives on a regular basis, which are quite advantageous to small business owners.
ECommerce Website
An eCommerce store is recommended if you are in the selling business. It will allow you to promote and sell your tangible products to customers directly. You’ll also have complete control over the style and feel of your virtual store.
Small enterprises, too, can set up their own virtual store. However, no business, large or small, can establish a presence on the internet without a domain. (More about this later.)
Shopify, Magento, and Woocommerce are some of the most popular eCommerce systems for small businesses in the Philippines. They make it simple for small business owners to open an online store and for customers to shop online.
Portfolio Website
If you’re promoting a service, it’s a better idea to have a professional website that showcases your best work. Say you own a graphics design company, you can establish a website that displays your services, fees, packages, and previous projects to demonstrate your skills to potential clients.
SETTING UP A VIRTUAL STORE
To get your e Commerce business up and running, you’ll need a domain name, web hosting, an SSL certificate, and payment gateway.
- A domain name is the internet address for your website. It is the address that users will enter into their browsers to get to your website (example: shop.com.ph).
- Web hosting companies house your e Commerce store or website on the internet. It’s your website’s home and is required for every website on the internet. You can check thee top-rated web hosting companies in the Philippines online.
- The SSL certificate adds a particular security layer to your website, allowing you to accept sensitive data such as credit card numbers and other personal information which is essential for e-Commerce business. The presence of a lock icon on your URL enhances confidence among potential clients. Furthermore, Google doesn’t encourage insecure sites, so it displays a warning when browsing unsecured sites.
- Payment gateways are critical for your online store. It provides a more convenient overall user experience. Create a payment form and integrate a system that allows users to pay via credit cards, debit cards, or third-party payment channels such as GCash, DragonPay, or Paymaya.
COST OF SETTING UP AN ONLINE STORE
A domain name typically costs around Php 750 – 1,500 per year, while site hosting costs around Php 150 – 400 per month which is very economical than maintaining a physical store. However, an SSL certificate costs around Php 2,800 -3,000 per year. Given that we’re discussing security here, it’s inevitable that it comes with a price.
The price range is highly variable. Still, it may be a lot of money for a start-up. However, rather than focusing on the price, you should evaluate what best represents your brand.
GET A TRADEMARK
A trademark is a word, a collection of words, a sign, a symbol, a logo, or a combination that identifies and distinguishes the source of one entity’s goods or services from another.
Differentiating your products or services from competitors gives you a competitive advantage. And, of course, you’d want to keep your trademark from being replicated or stolen.
Obtaining a registered trademark protects your brand and gives you the tools you need to prevent someone from using similar signs and profiting off of your business. If you do not register your online business for a trademark, you may find yourself legally barred from extending your business.
ALL RIGHTS RESERVED
These three words act as a copyright notice, protecting your intellectual property rights. You can post this warning on your website to deter others from copying your content.
Copyright notices are optional. However, they may assist in minimizing infringements. They’re also free. If any price applies, it will be minimal. If you sue someone for stealing your website or any of your work, it can also assist you in winning the case and asking for additional damages.
RECOMMENDATIONS FOR RUNNING AN ONLINE BUSINESS
You can find a plethora of ideas for running an online business on the internet. However, you should keep in mind that your business is an extension of yourself. Therefore, all areas of your organization (from front to back end operations) must adhere to your principles.
Another thing to keep in mind is that you are unique. Recognize this and leverage it to help your brand stand out. There may be businesses identical to yours, but you are still different.
Lastly, while the primary goal of doing business online or offline is to make money, you should still focus on serving rather than selling. It’s more about quality than quantity. This will help to establish positive customer relationships and generate buzz. The most effective kind of marketing is still word-of-mouth. Social media is a very effective technique for disseminating information and sparking a trend.
TOP 10 TIPS IN STARTING AN ONLINE BUSINESS
- Set a goal and make a plan
- Organize your web assets
- Track your performance
- Know your competitors
- Keep your customers’ information secure
- Safeguard your reputation
- Understand your customers’ preferences
- Be tenacious
- Keep up with the hottest trends
- Invest in a reliable internet connection
THE IDEAL ONLINE BUSINESS PARTNER
Doing business online is fast becoming the cornerstone of many different industries, from freelance artists to restaurant proprietors. Since the number of internet users is steadily increasing, you may make a lot of money by overcoming the myriad challenges of having an online business.
Streamtech Fiber Internet provides businesses – from micro and small to medium enterprises – with the resources they need to soar above their competition. Its fiber internet service is ideal for any company that relies heavily on bandwidth and real-time analytics. Streamtech, as the name implies, provides the fastest internet connection in the market to help your business stand out from the crowd.
With Streamtech, you can obtain download speeds of up to 500 Mbps. When you’re just starting out, having this speed guarantees that you have access to all of the materials and tools you’ll need.
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