11 BOOKS. Starting an Online Business. Making Everything Easier! 2nd Edition. Inside your Google AdWords gift card worth $25

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1 Making Everything Easier! 2nd Edition Starting an Online Business A L L - I N - O N E 11 BOOKS IN 1 Online Business Basics Legal and Accounting Web Site Design Online and Operating Internet Security Boosting Sales Retail to E-Tail Storefront Selling Fundraising Sites Niche E-Commerce E-Commerce Advanced Inside your Google AdWords gift card worth $25

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3 Starting an Online Business ALL-IN-ONE FOR DUMmIES 2ND EDITION by Shannon Belew and Joel Elad

4 Starting an Online Business All-in-One For Dummies, 2nd Edition Published by Wiley Publishing, Inc. 111 River Street Hoboken, NJ Copyright 2009 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) , fax (978) Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) , fax (201) , or online at Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/ or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ. For general information on our other products and services, please contact our Customer Care Department within the U.S. at , outside the U.S. at , or fax For technical support, please visit Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Control Number: ISBN: Manufactured in the United States of America

5 About the Authors Shannon Belew is the co-owner of several online businesses: allbizopps.com, allsmallbiz.com, avespamedia.com, bizoffice.com, todayshomeoffice.com, top10workathome.com, and workathome1.com. Bizoffice.com is a nationally recognized, award-winning global provider of resources for small and home businesses. Shannon writes the Huntsville Times column Today s Home Office ; has written magazine and newspaper articles; and founded the public relations firm avespa Media, Inc. Her clients have appeared in such venues as Inc. magazine. She has also consulted for an Internet provider, advising companies on developing and reengineering their online presence. Joel Elad was a fan of the Internet before most people had ever heard of the World Wide Web. He sells online as a PowerSeller on ebay with an impeccable customer satisfaction rating. He also runs his own e-commerce businesses: JoelElad.com focuses on selling educational products such as books and DVDs about selling online, and NewComix.Com, which he co-founded in 1998, focuses on selling new comic books, Japanese manga, DVDs, and action figures. He was the lead instructor for the Learning Annex in New York and California for classes about ebay and advanced Internet sales, and he s an educational specialist trained by ebay. He also contributes to Entrepreneur magazine, TrendGrinder.com, and SmartBiz.com. After earning his MBA from the University of California Irvine with an emphasis on entrepreneurship and information technology, Joel co-authored five bestselling books focusing on online activities, including Web Stores Do-It-Yourself For Dummies and LinkedIn For Dummies (both from Wiley Publishing). He s now a consultant to e-commerce companies, a trainer to thousands of eager students at seminars and workshops, and a guide for helping people attain the freedom of growing their sales and establishing their own online presence.

6 Dedications Shannon: This book is dedicated to my family: my son, Holden; my daughter, Wiley; and my husband, Tom. Thanks for your relentless encouragement, love, and patience and for always reminding me what is most important in life. Joel: This book is dedicated to the hardest-working man I will ever have the privilege of knowing my dad. Thanks for showing me the value of planning and discipline, as well as love. You will always be my inspiration.

7 Authors Acknowledgments Shannon: Since becoming a published author, I have realized that two groups of people deserve the most thanks once a book like this one is published: the team of people that helped produce it and the great people who are kind enough to buy the finished product! That said, my sincere thanks to the entire team at Wiley Publishing that made this book a reality, not once, but twice. This includes Rebecca Whitney, Jim Kelly, Rebecca Senninger, Kyle Looper, and my co-author, Joel Elad. I am convinced that this is one of, if not the, most talented and caring group of people I could ever have the privilege of working with, or knowing. A special thanks to Rebecca Senninger and Kyle Looper for their continued guidance. Thanks also to all of those who choose to read this book and who are inspired to become entrepreneurs. It is your ingenuity, creativity, and passion to follow a dream that not only makes this world go round but also inspires the rest of us to follow in your footsteps. Of course, I can t leave out another important group of people. Thanks to my in-laws, Jim and Freida Belew, for their support and love. Most importantly, thanks to my parents, Ron and Janice Sanders, for inspiring me. You have always encouraged me to stay on track with my dreams, even through the many ups and downs of this crazy life. Every entrepreneur should be so lucky to have parents like you in her corner. Joel: I d like to give a big thank you to Anthony and Yvonne Choi, James Marchetti, Anita Cohen-Williams, and Hans Park for the contacts, information, and support I needed along the way to fill in the gaps. A special acknowledgement goes to my usual co-conspirator, Michael Bellomo, who put me on the path of being an author and keeps me going with a bizarre sense of humor mixed with a powerful dose of inspiration. Most of all, I have to thank the Wiley team, which has been truly inspirational: Kyle Looper and especially Rebecca Senninger, whose patience and guidance helped make this book possible.

8 Publisher s Acknowledgments We re proud of this book; please send us your comments through our online registration form located at For other comments, please contact our Customer Care Department within the U.S. at , outside the U.S. at , or fax Some of the people who helped bring this book to market include the following: Acquisitions and Editorial Project Editor: Rebecca Senninger Acquisitions Editor: Kyle Looper Copy Editor: Rebecca Whitney Technical Editor: Jim Kelly Editorial Manager: Leah Cameron Editorial Assistant: Amanda Foxworth Sr. Editorial Assistant: Cherie Case Cartoons: Rich Tennant ( Composition Services Project Coordinator: Patrick Redmond Layout and Graphics: Samantha K. Allen, Reuben W. Davis, Andrea Hornberger, Melissa K. Jester, Sarah Phillipart, Christin Swinford, Christine Williams Proofreaders: Caitie Copple, Christopher M. Jones Indexer: Sharon Shock Publishing and Editorial for Technology Dummies Richard Swadley, Vice President and Executive Group Publisher Andy Cummings, Vice President and Publisher Mary Bednarek, Executive Acquisitions Director Mary C. Corder, Editorial Director Publishing for Consumer Dummies Diane Graves Steele, Vice President and Publisher Composition Services Gerry Fahey, Vice President of Production Services Debbie Stailey, Director of Composition Services

9 Contents at a Glance Introduction...1 Book I: Online Business Basics...7 Chapter 1: Starting from Scratch...9 Chapter 2: Turning Internet Dreams into Reality...17 Chapter 3: Getting Real: Creating a Usable Business Plan...29 Chapter 4: Finding Money to Fund Your Online Start-Up...37 Chapter 5: Creating Policies to Protect Your Web Site...55 Chapter 6: Setting Up Shop: Everything You Need for Online Efficiency...63 Book II: Legal and Accounting...77 Chapter 1: Minding the Law...79 Chapter 2: Choosing the Right Foundation: From Partnerships to Corporations...87 Chapter 3: The Trademark-and-Copyright Two-Step...95 Chapter 4: Accounting for Taxes (And Then Some) Book III: Web Site Design Chapter 1: What s in a (Domain) Name? Chapter 2: Designing Customer-Friendly Sites Chapter 3: Building a Site without Spending a Fortune Chapter 4: Finding the Host with the Most Chapter 5: Writing Content that Search Engines Want to See Chapter 6: Lights, Camera, Action! Taking Your Site Live Book IV: Online and Operating Chapter 1: Determining Your Revenue Model Chapter 2: Making Money with Affiliate Programs Chapter 3: Turning Information into Profit, from e-books to Webinars Chapter 4: Paying Up with the Right Payment Options Chapter 5: Putting the (Shopping) Cart before the Horse Chapter 6: Taking Inventory Chapter 7: Fulfilling Expectations and Orders Book V: Internet Security Chapter 1: Understanding Security and Your Risks Chapter 2: Developing a Security Plan Chapter 3: Attacked! What to Expect from the Net-Thief Chapter 4: Securing Your Site and Your Business Chapter 5 : Overcoming Security Concerns in the Wireless World Book VI: Boosting Sales Chapter 1: Driving Traffic, Driving Sales Chapter 2: Special-Edition Public Relations for the Web...361

10 Chapter 3: Web Marketing at Work Chapter 4: Converting Browsers to Buyers Chapter 5: Analyzing and Monitoring Your Customers Chapter 6: Mastering Search Engines, Optimization, and Rankings Book VII: Retail to E-Tail Chapter 1: Knowing When to Put Your Store Online Chapter 2: Understanding the Differences between Real and Virtual Customers Chapter 3: Window Dressing for the Online Display Chapter 4: Making In-Store Customers Loyal Online Shoppers Chapter 5: Staying Local, Getting Mobile with M-Commerce Chapter 6: Troubleshooting the Transition to E-Tail Book VIII: Storefront Selling Chapter 1: Instant E-Commerce with Storefronts Chapter 2: Mastering the Amazon Chapter 3: Let s Hear It for Yahoo! Chapter 4: Making ebay THE Way Chapter 5: New Storefronts, New Opportunities Book IX: Fundraising Sites Chapter 1: Raining Donations: Why Not-for-Profit Is Big Business Online Chapter 2: Adding Online Moneymakers to an Existing Site Chapter 3: Getting the Donor Base to Come to You Chapter 4: More Online Marketing Strategies for Nonprofits Chapter 5: Legal Considerations for Nonprofit Organizations Book X: Niche E-Commerce Chapter 1: Discovering Niche Markets Chapter 2: Discovering Niche Trends That Pay: Children and Boomers Chapter 3: Blogging for Profit Chapter 4: Socializing (And Profiting) in Second Life Book XI: E-Commerce Advanced Chapter 1: Overhauling the Business Chapter 2: Redesigning to Win New Customers Chapter 3: Expanding Products to Increase Stagnant Sales Chapter 4: Bringing Former Customers (Back) Home Chapter 5: Revisiting Marketing Strategies Chapter 6: Hiring Experts to Get Business Rolling Again Chapter 7: Transitioning a Small Site into Big Business Index...781

11 Table of Contents Introduction...1 About This Book...1 What You Need Not Read...2 Foolish Assumptions...2 How This Book Is Organized...2 Book I: Online Business Basics...3 Book II: Legal and Accounting...3 Book III: Web Site Design...3 Book IV: Online and Operating...3 Book V: Internet Security...3 Book VI: Boosting Sales...4 Book VII: Retail to E-Tail...4 Book VIII: Storefront Selling...4 Book IX: Fundraising Sites...4 Book X: Niche E-Commerce...5 Book XI: E-Commerce Advanced...5 Icons Used in This Book...5 Book I: Online Business Basics...7 Chapter 1: Starting from Scratch What Are You Waiting For? Start Your Business Now!...9 Choosing Just the Right Business...11 Creating online businesses for today and tomorrow...11 Finding a business that s your type...11 Getting Started...13 Chapter 2: Turning Internet Dreams into Reality Thinking Like a Netrepreneur...17 Putting Your Business Idea under the Microscope...19 Using informal research to verify your idea...19 Applying a SWOT analysis to your idea...21 Creating a feasibility study to validate an idea...24 Identifying Your Market and Target Customer...25 Classifying your customer...25 Going to the source...26 Competing to Win: Analyzing Your Competition...27

12 x Starting an Online Business All-in-One For Dummies, 2nd Edition Chapter 3: Getting Real: Creating a Usable Business Plan Understanding the Value of a Plan...29 Recognizing That the Parts of the Plan Make a Whole...30 Getting Help to Write the Plan...33 Determining when to hire a professional...33 Knowing what to expect from a business plan consultant...34 Using a Business Plan Today, Tomorrow, and Always...36 Chapter 4: Finding Money to Fund Your Online Start-Up Bootstrapping the Low-Cost, No-Cost Site...37 Making the leap to the bootstrapping lifestyle...38 Saving money to make money...38 Getting resourceful...39 Looking at the pros and cons of bootstrapping...42 Finding the Perfect Investor...43 Turning to your friends and family network...43 Finding angels...44 Venturing into the world of venture capital...46 Checking Out Alternative Financing...48 Taking a Shortcut: Purchasing an Existing Site...51 Chapter 5: Creating Policies to Protect Your Web Site Taking Care of Customers...55 I pledge to you...55 Put it in writing...56 Putting Policies in Place...57 Privacy policy...58 User agreement or terms and conditions...59 Shipping policy...59 Return policy...60 Safety for young users...61 Other online policies...61 Delivering On Your Promises...62 Chapter 6: Setting Up Shop: Everything You Need for Online Efficiency A Floor Plan for Success...63 Must-Have Equipment...66 Make form follow function...66 Revving up with a powerful PC...68 Let somebody else do the hard stuff...70 Tools for Your Desktop...71 Searching for a Web browser...71 Sending and receiving messages with Using document-viewing software and other useful applications...73

13 Table of Contents xi Your Essential Software Toolkit...74 Connectivity: Today s Internet Options and More...75 Book II: Legal and Accounting...77 Chapter 1: Minding the Law Keeping Your Business Legal...79 Federal tax identification number...80 Resale certificate...80 Business bank account...80 Employee forms...81 Zoning for Business (at Home)...82 Obtaining Business Licenses...85 Chapter 2: Choosing the Right Foundation: From Partnerships to Corporations Strategizing for the Best Organization...87 Operating Alone as a Sole Proprietor...88 Fictitious name registration...89 Husband/wife sole proprietorship...89 Sharing the Load with a Partnership...90 Limited Liability Company (LLC)...91 Making It Official with Incorporation...91 Different flavors of corporations...92 The choice to incorporate...92 Changing Your Organization as It Grows...93 Chapter 3: The Trademark-and-Copyright Two-Step Understanding Why Trademarks and Copyrights Matter...95 Making Your (Trade)Mark...96 Protecting Your Investment with Copyrights...97 Establishing Registration Yourself...99 Getting your trademark...99 Filing for copyright Retaining Professional Assistance Chapter 4: Accounting for Taxes (And Then Some) The Tax Man Cometh Again and Again Income tax Employment tax Sales tax By the Numbers: Accounting Basics Determining periods and methods And now, your balance sheet A quick glimpse: The P&L...112

14 xii Starting an Online Business All-in-One For Dummies, 2nd Edition Choosing Software to Make Your Tasks Easy Going online? What size are you? How much do you want to pay? Do you need support? Hiring a Professional Recognizing that it takes all types Knowing what to expect from your tax professional Finding likely candidates Choosing the best person for you Following the Rules of Recordkeeping Dealing with all the paper Storing records: How long is long enough? Book III: Web Site Design Chapter 1: What s in a (Domain) Name? Picking Your Online Identity Approaching your domain name carefully Understanding what a domain name should be Registering the Perfect Name Who you gonna call? Let s make it official Finding Out What to Do When Somebody Gets There First Exploring your domain name options Getting what you want at a price All the Good Ones Are (Not!) Taken Varying the extension Getting creative Chapter 2: Designing Customer-Friendly Sites Maximizing Performance for Profitability Looking Your Best Following basic design principles Making design choices Choosing Substance Over Style Counting on Function to Win Customers Understanding the customer experience Building function into your site Chapter 3: Building a Site without Spending a Fortune Mapping Your Route to a Successful Site Setting reasonable expectations Avoiding common holdups in developing a site...159

15 Table of Contents xiii You Can Do It! Make a Build-It-Yourself Site Using HTML: The old-fashioned way to build a page Going modern with Adobe Dreamweaver and more The pros and cons of using automated site builders Creating Your Site with the Pros Seeking experience: Choosing the right Web site designer Comparing apples to apples Speeding up the process Keeping an eye on your business interests Chapter 4: Finding the Host with the Most Differentiating between an ISP and a Host Determining What Makes the Difference for High-Performance Hosting Sorting Out Your Web Site Host Options Putting the Long-Term Contract in the Past Serving Yourself: Don t Overlook Other Server Options Chapter 5: Writing Content that Search Engines Want to See Words Are Words Right? Wrong! Getting Ready to Write for the Web Understanding who and why Understanding that packaging is everything Getting organized Making a list and checking it twice Moved to Purchase: Turning Words into Action Choosing Words that Search Engines Notice Chapter 6: Lights, Camera, Action! Taking Your Site Live Some Things to Know Before You Start Uploading Taking the Compatibility Test: Testing Screen Resolutions, Browsers, and Platforms Checking it out Testing on Mac, Windows, or whatever Keeping people in mind Taking a Trial Run Three, Two, One Take Off! Book IV: Online and Operating Chapter 1: Determining Your Revenue Model Selling Tangible Products Projecting how you ll make a profit Manufacturing and selling your own goods Buying tangible goods and selling them online...207