The great thing about the age of the internet we currently live in is the ability for so many of us to build a thriving internet business from home whilst still having a regular job. For those entrepreneurs who work days for someone else, and nights burning the hours for their passion, one of the great challenges is doing things the most efficient way.
The great thing about online businesses is the sheer amount of online services that are available. Whatever your venture there are a few common things that you’ll need to get started and it’s really important to set them up early and understand how they work.
Understanding and setting up your accounting and payment systems right from the start will save you countless hours in the future.
1. Your accounting system
As boring as this sounds its absolutely critical to have your accounting system set up in such a way that makes sense to you and your business. Thinking about things like:
How will I know if I make any money? How will I know if this product that I’m selling has a realistic margin?
These types of questions may not seem like part of your accounting system, however if you set up your accounts with some thought (and help from an accountant if need be) you can make your life a whole lot easier when it comes time to run some reports and understand how your business is running.
Another thing to consider in your accounting system is how it can be integrated with other systems. How well can you connect it to your payment system for example. You might have a great accounting system, but if you have to manually input every credit card transaction it is going to become very stressful. Automation ability is key to being able to scale your business and handle lots of customers.
Xero is a fantastic online accounting system with great integration.
2. Your payment system
How you receive payments is very important for obvious reasons. You need to be able to receive money from your customers – right?
Take a moment to consider your own online shopping habits. What payment processing tools are you comfortable with, which ones do you avoid? Do you like using your PayPal account whenever possible? Does using a credit card directly with a site concern you? What about the layout of the page you are entering your credit card details on – does it look professional?
These are all things you should consider when choosing how you will get paid and how your customers will perceive you. You might have the best product in the world but if people are wary about how your payment process works, you could be losing a lot of business.
Checking out the cost of processing payments is an absolute key factor also. A lot of the payment processing providers will charge a fixed fee and a percentage per transaction. If you have low value transactions (micro transactions) the fee can seriously eat into your profits.
And of course, like your accounting system you want to be able to automate the payments into your accounting system. This may not be straight forward and may require additional help to get it working, however it will be well worth your while. If you are dealing with taxes, discounts and varying pricing structures, setting up rules in your accounting system to recognise these coming through from your payment system could save you days of work every month!
Payment systems like Stripe and eWay are great options.
There are a lot of things to consider when setting up any business and often we avoid them because doing the fun stuff is so much more exciting. By spending some extra time up front and understanding how the boring stuff can be more efficient will ultimately give you more time to do things you want to do rather than endless hours doing the numbers.