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Thread: Setting up an online business

  1. #1

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    Default Setting up an online business

    Hi all,

    I have this really good idea that I have been thinking of for a while for an online business and I have discussed it with my DH and we've decided that we will launch it when I become a SAHM. So until that happens I have the time to get myself organised. My biggest dilemma is organising the business online - how do I go about setting up a website, etc to sell my product?

    Any advise would be greatly appreciated. I'm pretty quick to pick things up, however I've just never had to setup a website before, so I'm wondering where to start.



    Cheers
    Belinda

  2. #2

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    id love to do this too!!!

  3. #3

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    Ok, you have 2 main paths to go down.

    1 - find one place that can do it all for you - web-hosting, web-design, domain name registration etc - advantage of this is that your web page will look professional, downside will be cost, especially if you cannot up date it your self and have to go back to them. A good place should at least allow you to maintain inventory, product descriptions etc.

    2- do it yourself, find yourself the best deals from different providers, either do the web-design and setting up the shopping cart using something like Zen cart, or if you are not IT savy then find someone who can, maybe a student, who needs the practise etc and will do it on the cheap.

    How to find businesses that can help - find other WAHPs and get recommendations, or just have a look at the bottom of their web-page, it will often have listed who designed it if professionally done, or at least list the software used to build it.

    Word of warning - look after your domain name - make sure you know when it needs renewing - the main risk of using cheaper providers is that their renewal notification system is often not the best, and you can lost the domain name if not renewed. Sorry seen it happen too many times.

    Have a look at this thread for other info I have given on setting up a business.(my 2nd post).

    :-k Mmmm me thinks maybe I could start up a business start-up business. I know what to do, I just need to get off my butt to do it

  4. #4

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    Thanks for your advice Astrid - it gives me an idea of where to start investigating matters.

    Cheers

  5. #5

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    Astrid, I tried to follow your link, but I got errors...

    I'm not so much bamboozled by the IT side, but the business/legal side of it?
    ABNs - can you earn up to a certain amount before you need one?

    How do you register as a business, and does that necessarily mean you can purchase
    things wholesale? Is this up to the wholesaler?
    I think it is, as DH works in wholesale sales, and his company won't allow you to purchase unlesss you have aphysical shopfront, not just an online store.

    Isn't there some sort of legislations that if you earn under a certain amount
    from a "hobby" you don't have to declare it as taxable income? I know tupperware sell themselves under this guise..

    What else do I need to be aware of?

  6. #6

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    Ok, have fixed the link.

    Mmm Serious Hat on now - please be careful when stating what is or is not a hobby business, a business that maybe below the threshold for having to deal with GST is not necessarily a hobby business when it comes to income tax, please do not get these areas confused. The test for a hobby is a lot more complicated, so hobby is not really the correct term to be using for just being under the $50,000.

    I have a legitimate business that turns over less than $50,000, that could never be classified as a hobby as far as income tax is concerned. With it I choose to be registered for GST as it makes it easy to deal with other businesses.

  7. #7

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    I always understood you were classified by the ATO as a business or 'enterprise' if it was with the intention of making a profit?

    From ATO site:
    Am I in business?

    Why does it matter whether my activity constitutes a business?
    It matters because it affects whether:

    -any money you receive from the activity is assessable income
    -any loss you make can be offset against other income you earn in that year or in future years
    -you need an Australian business number (ABN), and
    -you can register for goods and services tax (GST).

    If you are carrying on a business then you are entitled to an ABN. You may choose to register for GST if your annual turnover is less than $50,000. However, you must be registered for GST if your annual turnover is $50,000 or more.

    Additionally, any payments that are paid to you in relation to supplies that you make to another business may be subject to pay as you go (PAYG) withholding (at a rate of 46.5%), if:
    you do not quote an ABN on an invoice or other document relating to the supply, and
    certain exceptions do not apply.

    For further information on when payments may be subjected to PAYG withholding when an ABN is not quoted, see Taxation Ruling TR2002/9 `Income tax: withholding from payments where recipient does not quote ABN'.

    You are not entitled to an ABN if:

    -your activity is a hobby or a private recreational pursuit, or
    -you are an individual or a partnership mainly of individuals, and there is no reasonable expectation of profit or gain from the activity.
    My bookkeeping business is definitely under $50k, but there's no way it's a hobby, as my plan was to make money from it!

  8. #8

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    Have just started a "Am I a hobby thread" so this info can be easily found by others.

  9. #9

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    We have three (and hopefully soon to be four) home-based businesses here So I'll give you what info I can.

    how do I go about setting up a website, etc to sell my product?
    It depends on how much money you have to spend. If you have some capital to invest, search the web and find five of your favourite sites. Look down the bottom of the page and there should be a link to whoever the designer was. Click on it, search their profiles/portfolios and get some quotes from your favourites.

    ABNs - can you earn up to a certain amount before you need one?
    As a business you should have an ABN. You'll need one for certain things. You don't have to register for GST until you've earnt $50 000.
    As a hobby you don't have to have an ABN. You can earn up to $20 000 as a hobbiest.

    How do you register as a business, and does that necessarily mean you can purchase
    things wholesale? Is this up to the wholesaler?

    You register your business through your state government. This federal site should be able to provide all relevant details... http://www.business.gov.au/Business+Entry+Point/
    Go to this site to find out whether your chosen business name has been taken...
    http://www.search.asic.gov.au/gns001.html

    Some wholesalers will only deal with businesses that have an ABN, some will deal with the public. It depends on the individual wholesaler.

    Isn't there some sort of legislations that if you earn under a certain amount
    from a "hobby" you don't have to declare it as taxable income? I know tupperware sell themselves under this guise..

    The amount you can earn is $20 000

    Hope that helps a little

    My DP is a computer programmer and web designer, and I help out so if you have any questions in regards to websites etc, please feel free to ask. I'll try to explain it in non-tech terms

    I also have a fairly comprehensive list of good web-sites to visit for information if there's any other area you need more information on.

    Good luck with it all

    Kasie

  10. #10

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    Quote Originally Posted by Kasie
    [b
    Isn't there some sort of legislations that if you earn under a certain amount
    from a "hobby" you don't have to declare it as taxable income? I know tupperware sell themselves under this guise..[/b]
    The amount you can earn is $20 000

    Kasie
    Sorry disagree with this one, if it is correct, then can you please provide tax ruling reference. Depending on what you are doing and how any amount can be taxed.

  11. #11

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    Im pretty sure it's not based at all on how much you earn, rather on the activity that's being carried out.

  12. #12

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    My accountant told me that if we earnt over this much doing websites then we would have to inform the tax department. My understanding of it was that once you earn this much they start to reconsider whether you would be classed as a hobby or business. It's to do with Do you have a purpose of profit as well as a prospect of profit? and What is the size, scale and permanency of your activity? as stated in http://www.ato.gov.au/businesses/con....htm&page=2&H2

    I'd certainly suggest seeing your own accountant before going on anything said here though

  13. #13

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    Well I reckon turning over $19,900 doing websites (even tho under the $20k) would be classed as profitable and you're most likely to be setup as a business. I'd be wary of some accountant's advice too

    I worked for an accountant for 9 years and we've shared the same floor with a few dodgy ones who will tell you what you want to hear.. ie.. you don't have to pay tax.

    From that link:
    Does your activity have a significant commercial character?
    Very important question. Invoicing people for work carried out is pretty commercial regardless of the turnover.

    Definitely ask an accountant, or even a couple of them! Ring the tax office too if unsure. They can help determine hobby vs business better than an accountant.

  14. #14

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    Well, each business venture needs to be evaluated on its own circumstances and what applies to your own business, if applied to another could get that business in a lot of trouble. I agree with Ivana though, a turnover of nearly $20k would be pushing the limits, I do know of a number of ventures, such as some types of racing, which have high turnover, but are not likly to turn a profit, so are classed as a hobby.

    If in doubt I would always get a ruling from the ATO rather than just rely on one accountants opinion.

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