Basic Business Types for Internet Entrepreneurs

Essential Knowledge for Internet Entrepreneurs

What does a prospective Internet business owner need to know in order to succeed? There are dozens of skills that go into a profitable net enterprise, but the most important abilities have much in common with old-school management techniques. Besides particular skill sets and a modest dose of management savvy, anyone who wants to turn a profit from an online business should have a solid grasp of the basics.

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Part I: Business Types

For starters, those entering into the game of net commerce need to decide on the general type of company they’ll be creating. Will it be a startup that searches for venture capital, a simple website that sells a product or two, a fully-developed online corporation that offers services, or a blog that posts lots of content and eventually monetizes with paid advertising? These are just a few of the forms an online business can take. There are many more. The point is, the very first thing on an entrepreneur’s “to-do” list is to decide what form the business will take.

Categorizing a New Business

The “Business 101” part of this question involves a few legal concepts. Entrepreneurs who go it alone and simply file a Schedule C with their federal income tax return are quite common in the world or online business ownership. This is legally the simplest way to go because it requires no partners and does not call for incorporation. Sole owners pay income tax on profits as if that money were personal income.

A few other business types are corporations, limited liability companies (LLCs), and partnerships. Online businesses can take any form, and those who want to operate as anything other than a sole proprietorship will likely need to consult an attorney before launch.

After the “legal structure” of the enterprise is decided, the owner should consider what kind of business structure will be needed. For example, someone engaged in affiliate marketing is basically finding customers for others, carries no inventory, and engages in a good deal of marketing. On the other hand, those who intend to sell their expertise as accountants, therapists or consultants will primarily be looking to build a client base of local customers, after which word-of-mouth will work to maintain a profitable income.

Freelance writing, media consulting, web design, graphic services, business coaching, SEO consulting and hundreds of other business types call for varying sets of skills, website sophistication and sales prowess. Understanding the direction and type of a business will determine much about its future.

Companies that sell tangible products, for example, often require complicated shopping-cart software that keeps track of order numbers, taxes, invoices, products sold, customer information, postal tracking, refunds, exchanges, discounts, and numerous other bits of data the pertain to an active, successful sales enterprise.

Other, more bare-bones operations like freelance writing businesses, might consist of nothing more than a simple website that lists prices and services offered, alongside a way of contacting the owner.

Online business can be an exciting, rewarding way of making a full- or part-time living. Savvy entrepreneurs will know exactly what they want to offer in terms of products or services before setting off on the road to Internet profitability.