Important Areas to Consider

It goes without saying that running a full-time online business will take more time, more money, and more energy than you are expending now in your current business endeavors. Perhaps you established a Yahoo! store for "fun" or as a hobby, or to earn a little extra cash. Maybe you have dreams of becoming a successful entrepreneur and just dipped your toe into the e-commerce ocean to see if you liked it and could succeed. Or perhaps you've heard how you can use the Internet to expand your physical-world business beyond the limitations of your local market.

In any case, if you truly want to run a full-time business on the Net and have decided to control your own destiny, you should ask yourself the following questions.

Do You Really Want to Have a Full-Time Business?

Are you willing to drop other time-consuming activities, such as your full-time job, to do it? Do you have a passion for the business idea that you chose? One reason new businesses fail is that the owner lacks passion for his or her company vision. Like a strong passion, what was done for "just fun" or as a hobby will now be all-consuming. Your long days as an employee will seem short compared to the time needed to run a full-time business.

You must also consider your goals. What are they? To create a small family business with a decent income that will be passed on to your heirs? Or perhaps to use your business as an investment in the future, hoping to sell it to much larger company and retire early on the proceeds? Or do you have dreams of an IPO and seeing your company name up in lights on NASDAQ?

Web Resource: Are You Suited to Own a Business?

Fill out the Business Challenge Questionnaire at www.avantrex.com/business/bizquest.html to see if you are really suited to own your own business. The Avantrex people will analyze your responses and contact you with their suggestions. The questionnaire takes only a few minutes.

If you have a service business, can its expansion actually hurt the business? Expanding or increasing the products you sell offers the security that you have control over the quality and quantity of your merchandise. But if you have a service business, will you be able to hire additional people who can provide the same level of service that your service company is currently known for? You need to hire not just any people to sell and ship your merchandise, but hire the right people to maintain your high level of service.

Are You Prepared to Hire a Staff of People to Help?

Up to this point, you might have had family members or friends help you "on the side" with your part-time business. But a full-time business has employees, not family and friends. That means taking on an entirely new set of responsibilities, including hiring, payroll, and tax collecting. Don't forget the laundry list of local, state, and federal government rules and regulations that pertain to running a full-time business: withholding and unemployment taxes, Medicare and Social Security withholdings, and a host of government rules and safety regulations. Of course, if you have the budget for it, you can outsource many of these duties. For a small part-time and even full-time business, however, that option can get expensive.

Hiring people can have both a positive and negative effect on your business (see Chapter 22, "Finding and Hiring"): positive if you hire the right people, negative if you don't. Up to this point, you were probably the CEO, buyer, marketing manager, and customer service rep all rolled into one. But if you expand your business to full-time and it succeeds, you will need to hire people to replace you in those responsibilities. If you choose the wrong people, your business can suffer; worse yet, you could find yourself having to micro-manage every aspect of your company instead of doing your job of growing the business.

Do You Have the Capital to Grow Your Business?

Growing a business takes money. That little space in the corner of your house or basement that you used as your office will not do if you plan to go "big time." You'll need a real office away from the house and any and all distractions. You might consider, as a start, one of the many business centers available today where you can rent a separate office space but use the shared secretarial and receptionist services, have access to office machines, and even have the use of a conference room.

You'll also need to consider other overhead costs, such as warehouse space, advertising and marketing costs (marketing on the Internet is not free, although is can be lower in cost than in the brick-and-mortar world), and professional expenses if you plan to use an accounting service to track and manage your growing business. If you plan to take your existing small business online, you have a whole new set of cost considerations, such as creating a customized online store that reflects your current business, hosting your website, managing your database and inventory, and providing top-notch customer service in a virtual world. That's not even mentioning the challenges of search-engine marketing, email marketing, and a host of other promotional tools.

Are You Prepared to Write That Formal Business Plan?

Now that your business has a track record, it's time to dust off your original business idea and assumptions, and compare them to reality. Don't believe that just because you took the time to lay out a business plan at the start of your business that you don't need to revisit it now that you have a successful part-time business under your belt. A business plan is a living, breathing document that is always in transition. You should update it periodically, especially if you plan to take your part-time business full-time or if you plan to venture into the virtual world with your physical-world business. Plan your work and work your plan.

You might find that new factors have entered the equation and that you must modify and flesh out your business plan. Remember, a business plan is not a destination, but a roadmap to success; it's a way to monitor your business assumptions and make changes to it along the way.

If you decide that establishing a full-time business will require additional capital, a formal business plan is necessary to approach funding sources for money, whether those sources are investors or a bank loan. That means complete financials, including a proforma, cash-flow and income statements, and a balance sheet. Even if you are not seeking funds, a proforma and cash-flow statement that are well thought out will tell you the amount of money you will need to operate your business. Many part-time businesses are expanded using savings, second mortgages, lines of credit, and credit cards.

The point of answering these questions is not to throw a wet blanket on your enthusiasm, but to help you decide whether you are ready to jump feet first into what can become a time-consuming and capital-intensive situation. Normally, if you want to succeed in e-commerce, it takes money, time, more money, technical skills, more money, marketing and operational know-how, and still more money.

But there is good newsand it's not saving 15% on your auto insurance.

The Yahoo! store program can dramatically reduce the cost of creating a full-time customized online businessand help you succeed at it. Succeeding in a full-time online business has to do with professionalism. The chapters that follow will show you how to create a fully professional and customizable Yahoo! store and help you succeed in the world of e-commerce.