5 Reasons to Start an Online Business in 2019
Like most online startups, Swyft Filings originated from a computer and a brain. But in just three short years, we filed more than 60,000 businesses, grew our team, and found an office to house our business.
In reality, online businesses like ours attribute their growth to so much more. Advancements such as social media, user-friendly software, online forums, and more all work together to best-use the internet. The best part is, humans are still discovering more ways to improve, and will always be innovating.
Online Business Trends
Online shopping is convenient, timely, and affordable. In 2017, U.S. e-commerce sales reached a whopping 2.3 trillion dollars. E-commerce companies also provide opportunities for industries such as the warehousing industry and others like transportation and technology. According to the State of Swyft report, the warehousing industry saw an 8% year-over-year growth for new businesses formed in 2017, mostly to support the heightened e-commerce activity. Although e-commerce businesses compete against magnates like Amazon and eBay, there’s still plenty of room for online companies to benefit from these growing trends.
And here’s why…
5 Reasons to Start an Online Business in 2019
What are the main benefits of starting an online business? Here are a few that we found most promising for the upcoming year:
1. Low start-up and operational costs.
Start-up costs vary wildly on where you would like to operate your business, how elaborate the website is, the functionality of the website, how many team members you want to hire starting out, whether or not your industry is niche, and more.
Let’s use a copywriting company as an example. 3 writers that all work from home or a co-working space would eliminate rent, utilities, and additional salaries. For a simple website, you can purchase a domain for as little as $10 per year and outsource the website design for $50 per hour – a one-time fee, plus any design changes you need in the future. To grow your business, a lot of the budget will go into marketing. No need to worry about maintenance on the building, accounting for merchandise, or damage control for natural disasters and theft.
2. Tax deductions.
In working from home and conserving resources, several parts of an online business are deemed tax-deductible, including:
- Shipping – postage and other delivery charges are all deemed “ordinary and necessary” by the IRS.
- Working from home – a percentage of your home’s square footage that you use for business applied to home expenses. For example, if you use 5% of your house’s square footage for business, then you can deduct 5% of your bills on your tax return. At least in the first year, you can get tax deductions while you’re starting your business. How convenient!
- Independent contractors – the payment you provide for outsourcing copy editors (contractors) to review your writers’ (employees) work can be deducted from taxes. Note: make sure you clearly identify whether workers are contractors or employees and collect contractors’ 1099s before they begin.
- Travel and mileage – although you work from home, you might want to work at an office or coffee shop occasionally. Maybe you have a meeting with a potential business partner, or need to drive to the warehouse to pick up orders. If your business involves any kind of travel, track the standard mileage rate for your car and any expenses used to travel. This amount is deductible.
- All website fees – IRS also deems the website as a platform that is “ordinary and necessary” for the business. Services such as the domain host, merchant processing fees, and marketing to engage with customers can also be deducted.
3. Rising social media trends.
77 percent of U.S. Americans use social media, and in that percentage, social media plays a hand in targeting users – it basically does it for you! Users provide their information through their activity, and social media platforms are constantly updating their algorithm to collect this data. Social media platforms are also exploring new ways in the next years to reach users through live video, endorsing with social media influencers, user feedback, AI and other ways to reach users organically.
4. New software capabilities and design updates.
If you’re not tech-savvy, don’t give up! Website builders such as WordPress and Squarespace are continuously finding ways to be more user-friendly. Most website builders and other add-ons also have customer support to give you the value for your money. Design software such as Canva and even the Adobe Creative Cloud are affordable approaches to design and easy to self-teach.
5. Easier to pivot.
Entrepreneur named five big brands that had massively successful pivots, or changing a fundamental part of a business: YouTube, Slack, Groupon, Yelp, and Shopify. What do all of these brands have in common? They’re all online. In most cases, pivoting is easier online. One of the benefits of having an online business versus a brick-and-mortar is that online businesses don’t have to worry about the lost expenses of overhead and inventory that would be a wasted investment during a pivot. Other reasons online businesses are so flexible include ease of changing website content, time it takes to pivot, and a large pool of customers.
Preparing for the New Year
Starting a business takes a leap of courage, whether you want to start a brick-and-mortar or an online company. There are ways to make the process easier for you, and an answer to every question about starting an online business. Look forward to new advancements in the upcoming year, and follow the trends supporting your industry.