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How to Start an Online Business

Melinda Emerson, “The Small Biz Lady”, gives an overview of online business best practices. Key takeaways include why you should incorporate and how to stand out in a crowded marketplace.



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Greg: Hi, I’m Greg Corombos. Our guest this week is Melinda Emerson, also known as the “Small Biz Lady.” She is also the author of 'Become Your Own Boss in 12 Months'. You can find her online at She joins us today to talk specifically about starting your own online business and what you need to know about it. Melinda, it’s always great to have you with us and thanks for your time today.

Melinda: I’m happy to be here as always.

Greg: Technology has allowed so many businesses to exist today that simply couldn’t a generation ago. And like any opportunity, there are pros and cons to starting any sort of business. So when it comes to the online business world, let’s start on the happy side. What are some of the advantages of launching your business online as opposed to a physical location?

Melinda: One of the great things about launching your business online is that you can do it within hours. Literally, in three hours you could be up and running on one of the business places like Etsy or Amazon. And certainly, you can build your own website. There are so many DIY or low-cost tools to build a great business website. You can look at a big commerce [site], Shopify, any of those guys, to build a great [site]. They’ve got terrific templates and plug-and-play kind of stuff. You can get up and running really really fast with an online business.

Greg: What are the downsides? Obviously, there is being lost in the sea of everything that’s online. Talk a little bit about that and the other challenges that exist.

Melinda: The greatest disadvantage is also the greatest advantage. Anyone can get up and running with a business online in a couple hours. Online is the wild wild West. There isn’t a lot of regulation out here. Somebody can get online with an e-commerce business and steal all of the copy off of your website and put it on their website, and there is not a whole lot you can do. You can go out of business trying to chase that person down and sue them. The thing about going online is that you really need to know who your customer is, you need to know how to drive traffic to your website, you need to know your right keywords. There’s a lot of stuff you got to know, as well as pricing and all this kind of stuff. It’s simple, but not simple. There’s a lot of stuff you need to know, or you could lose your shirt.

Greg: One of the things you know and always stress, Melinda, is planning, business plan. What type of business plan do you need? It’s easy, like you said, to start out--it only takes a couple hours--if you really want to, but what’s the right plan to get this off the ground.

Melinda: It’s like any other business; it just happens to be online. I one hundred percent believe that you need a business plan. You need to figure out how you’re going to run your business. And more importantly for an online business, you got to figure out how you’re going to fulfill your sales. Are you going to have an inventory management system? Are you going to offer multiple colors, multiple SKUs? There’s a lot that goes into being successful online and having a great customer experience. The number one challenge that online businesses face is shopping cart abandonment. You’ve got to figure out if that’s happening to your business, why, and fix it. You also need to do things like use live chat so people can talk to you and ask questions. These are the sorts of things you need to do to make sure people have a great experience. And for those people who decide to sell through the marketplaces--the Amazons, the Etsy’s--you really need to know how to have the right keywords, the right descriptions. You got to have great pictures of your stuff on white backgrounds, right? You got to have it on white backgrounds. You want to make sure that people get their stuff in a timely manner, and there aren’t any surprises at the shopping cart. That’s really what turns people off. You got to know that if you’re going to do business with the marketplaces, you’re going to give a 15 to 20 percent cut of whatever you sell to them. However, everybody goes Amazon all day, every day. There are definitely advantages of selling in a crowded marketplace, but please understand, it’s a crowded marketplace.

Greg: Absolutely. And as you mentioned, there’s a lot that goes into the online business aesthetically, as well as content and quality of the product, and so forth. So given the fact that you’re based online, obviously you can hire people to create a professional, easy-to-use website, and that sort of thing, and deal with search engine optimization. But how much should you know about it, if in fact, this is the platform you want to use to run your business from.

Melinda: Well, one of the great things about the e-commerce templated sources you can use is that all lot of them are all-in-one. So they will help you with how to set up your website. Your biggest challenge, I think, is an e-commerce business, is having great quality pictures of your stuff. You’ve got nice pictures--well lit, action pictures of people using your stuff, wearing the sneakers, wearing the sunglasses. That’s the stuff you want. You want to make it look cool to do business with you. That’s probably your biggest concern. Getting a website up isn’t really that deep. You just want to make sure all of your systems work together so you have things like ship stations so that you don’t have to re-input the customer’s address and information to develop a shipping label. You want to make sure all the systems you use to run your online business play well together, which is why it’s great to work with companies who have great plug-ins. You can just drag in and drop it and add it to your business because a lot of people running e-commerce businesses are solopreneurs. They are armies of one. You want to make your fulfillment, once a sales happens, as seamless as possible.

Greg: We’re talking with Melinda Emerson; is her website. She is the author of 'Become Your Own Boss in 12 Months'. Melinda, obviously incorporation and legal stuff isn’t the most exciting part, but it’s really important to running any business. So, when it comes to the online world, what do you need to consider, whether is where you incorporate, the business type, and other considerations.

Melinda: Well the biggest thing you have to be concerned about, certainly you want to be an incorporated business. Do not be out here in the e-commerce business as a sole proprietor. Do not do that. Make sure you incorporate. But there are two major things you want to make sure are visible on your website. It is your return policy, and it is what your shipping practices are. For example, I don’t like it. I want to ship it back to you. Am I eating the shipping on that? I should know that before I make a purchase. Those are the kinds of things that get people in trouble and get people really bad reviews on Yelp and stuff like that because I returned this, and they charged me a 15% stocking fee, and they charged me for the shipping. You want to make sure that people know, in no uncertain terms, what it is to do business with you. Are all sales final? That’s the kind of stuff you want to make sure is very very prominent on your website.

Greg: Let’s talk a little more about the legal framework. Whether it’s directors of the corporation, registered agents, filing articles of incorporation. What are the best ways to figure out how to do it, and the right way to do it?

Melinda: Well you need to get professionals to help you. I think if you’re going to incorporate your business, you need to have a small business lawyer. If not, you may want to use a service out there that will help you with some of that initial paperwork, and the ongoing paperwork. You just need to make sure you have a business lawyer you can call. And it also depends on how you incorporate your business. If you’re an S-corp, there are different paperwork requirements than if you’re a single member LLC. So you just need to know what that is and consult a professional to get help with that.

Greg: People need to know they still need licenses and permits, a lot of time, for online businesses, even though it’s not on the street corner.

Melinda: Absolutely, and you also need to know what your tax liability is. Just because you’re online, you still have to pay taxes on the stuff that you sell. You still need to know what your state and local and federal liabilities are for your products.

Greg: What are the most common mistakes, because obviously there is good advice, and there are lessons learned the hard way. So what can folk avoid what you have seen over the years?

Melinda: One of the biggest mistakes is not having a niche focus, you know, just feeling like “I’ve got this e-commerce website, I’m selling everything.” It should not look like a flea market when people get to your website. People should know specifically what you specialize in selling. If you want to stand out with your online business based upon price? Let me tell you something, the race to the bottom is a losing race. You don’t want to have price as the thing that makes you special. You need to have something else. And the third thing that I see people make a mistake with is, certainly, you can use paid ads, Facebook ads to drive traffic to your site. But you better know how to drive organic traffic to your website as well. You need to have a content strategy, even if you’re an e-commerce business, and you need to know that going in. Certainly paid ads will be part of that strategy, but you need to have other ways to drive traffic to your site.

Greg: Let’s talk about that a little bit in our last minute or two. You’ve talked about being accessible to your customers and potential customers through the live chat, you’ve talked about ways to drive traffic with content. What are some of the most well-proven marketing, advertising strategies that you’ve seen and been part of?

Melinda: Well certainly Google Adwords and Facebook ads. Facebook ads particularly are cost effective. And the reason I say this is because you will know notice in five to seven days whether you’re onto something or now. You just go to know the right way to do it. You need to test. I would test with three to five pieces of artwork for a Facebook ad, and within the first two to three days you will be able to see what is actually being clicked on. And then I would push the rest of your campaign the next three to four days on that one piece of artwork that seems to have the best response. When it comes to advertising, it’s testing, testing, and more testing. So you just want to make sure what message, what image is resonating the most with your customers, if you’re going to use Facebook.

Certainly Google Adwords. They are the big behemoth. But, depending on what you sell, you can get a lot of ROI on what you’re doing. But you do need to measure it, you need to look at your Google Analytics and see what keywords are driving traffic if you’re going to use your own website versus a marketplace. You’ve got to tweak it. Depending on what you sell, your keyword could be changing every four to six weeks. You want to stay on top of this and know that you might learn some medium-expensive lessons at first. But once you get the hang of it, it can work really well for your business.

Greg: Melinda, fantastic advice as always. Thanks very much for your time today. Have a great day.

Melinda: Thank you so much!

Greg: Melinda Emerson is the Small Biz Lady. You can find her at She is also the author of Become Your Own Boss in Twelve Months. I’m Greg Corombos, and for more information on starting your own online business, please call CT at 844-787-7782.

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