Michael Norton, managing director of PayPoint.net offers his top tips for entrepreneurs looking to set-up their online venture
With e-commerce growing by 14 per cent in the UK in 2009 (According to the IMRG Capgemini e-Retail Sales Index ) and online shopping at an all time high, there has never been a better time to think about starting up an online business. As the summer draws to a close, and Britain returns from its holidays, it’s understandable that many office workers are feeling the strain of their current job and considering other options available to them. Our research showed that as many as 50 per cent of Britain’s office workers are frustrated entrepreneurs, who have considered setting up their own business — with the most popular choice of a business start-up being an online venture.
Many would-be entrepreneurs can face a range of obstacles when trying to join the e-commerce revolution and some fail to understand the number of steps which need to be completed before an online business is ready to start trading. It can often feel overwhelming, which discourages them from pursuing the venture. However, knowing what processes are involved is generally half the battle. There are a few simple steps, which if followed correctly, can ensure setting up an online business is easy and hassle free. The following advice can help keep budding entrepreneurs on the right track and on their way to trading online as quickly as possible.
Taking the crucial first steps
• Firstly, you will need to set up a legal entity which is required if you want to trade online. To register your company and get a company registration number go to Companies House or a Company Formation Agent — the cost of this starts from about £20 and can even be arranged on the same day if required
• Write a business plan so that you can be prepared for every eventuality. Ask yourself questions such as:
o Who is your target audience?
o What are your sales forecasts?
o What are your future plans for the company and how are you going to get there?
o How much is it going to cost you to set up and run your online business?
• Once all of the basics have been covered, you will need to begin setting up your online presence. The first step is to choose and then register your domain name, which should be selected carefully to help you drive traffic to your site. Registering your domain name is relatively easy and costs £3 - £25 depending on the type you require
• Create your website — we suggest working with a web developer so that you can get a bespoke site that meets your business needs
• Open an online merchant account often referred to as an internet merchant account (IMA). This is separate to your business bank account and is required specifically for online trading. It can take up to several weeks to set this up, but there are faster services available
Setting up an IMA
Services, including PayPoint.net’s 24 hour fast track offering, are available to help new online businesses set up an IMA and start trading within 24 hours. To ensure your IMA application is accepted you will need to:
• Provide a business plan and an accurate account of your previous business experience
• Supply personal documentation to prove you are who you say you are
• Decide how you want to accept payments, whether its over the web, phone or a combination of the two and if a multi-currency platform is needed
The final steps
• Make sure that you are PCI compliant. This is the security standard that applies to any business that handles or stores card details and was mandated by Visa and MasterCard last year. Failure to be non compliant can cost your business severely with daily fines and even suspension of your processing facilities from the card schemes in the event of a security breach
• Be aware of the security risks associated with trading online. Fraud is a major issue for online retailers and can cost merchants valuable income, therefore it is vital to select a risk management platform that reduces the risks associated with ID theft and allows you to safely and quickly accept online payments
• Finally, be available. Many accounts lie dormant for longer than necessary while waiting for documentation and signatures. So make sure that you are easily contactable as it will speed up the approval process
While there are a number of hurdles that would-be entrepreneurs have to overcome when setting up a new business online — the process should be exciting and not painful. To ensure that the new online business is given the best possible opportunity for success it’s vital that you understand the basic operational requirements and know where to turn for advice when it’s needed.