The webmaster business

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want to go. I can tell you what to do to get started on the right foot, and better
yet, I can help you stay out of trouble by telling you what not to do.
So, follow the valuable guidance offered in The Webmaster BUSINESS Masters
Course. Not only will you receive answers to questions you might have, you will
also receive answers to questions that you didn’t know to ask.
As an added bonus, the Course will point you towards an excellent business-
building resource, called Site Build It!. Its comprehensive system of tools will
help you deliver traffic-generating, successful sites (good for your clients’
business) in less time and with a profit (good for your business).
Now that our introductions are finished, let us get on with the Course…
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2. The First Steps
Your own business… sounds impressive, doesn't it? It conjures up visions of
office buildings and row after row of designers producing Web sites while you sit
back and rake in the cash.
Okay. Get your head out of the clouds. The office building is a desk in your
spare bedroom. The rows of designers, nah… it’s just you. It’s time to quit
fooling around. You have a business to run.
There is a lot more to starting a business than just saying, “I want to start a
business.” There are legal requirements, forms, permits, licenses, and fees to
pay.
But before you attack the paperwork, sit down and decide just what it is you want
from your business.
Take some time to think carefully about your new venture and how you will define
“success.” Think about what kind of hours you can put in at home, how hard you
are willing to work, and any other personal factors that might influence your
business decisions…
• Are you looking to make a little money from your Web site design hobby?
• Do you want to generate income in your spare time?
• Would you like to work in the evenings to supplement the income from your
present job?
• Do you want to build a business that will let you work at home full time?
• Are you planning on becoming a major force in the Web site design market?
After you have given your “vision” some sort of framework, talk it over with
someone else or a few people. Don’t skip or rush this exercise. The clearer
your goals are, the stronger your business foundation will be.
Great! At this point, you are ready to establish…
Your Business Structure
A business is considered a legal entity. This means that it has real rights and
real responsibilities as far as the law is concerned. It can…
• Open bank accounts
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• Write checks
• Pay taxes
• Generate income
• Distribute profits
(Generating income and distributing profits that’s the good stuff!)
Where you live determines what types of business options are open to you.
Each country has its own set of rules and regulations. These rules can even vary
from one place to another within a given country.
That being said, when you start looking around, you will find that almost every
place has a version of the three basic legal business structures…
• Sole Proprietorships
• Partnerships
• Corporations
Each structure is different from the others and each has its own set of
requirements, advantages, and disadvantages as you will soon see…
1) Sole Proprietorships
A sole proprietorship is a business run by one person.
As a sole proprietor, you will provide products and services under your business
name, but there is no legal distinction between you and the business. All of the
profit from the business goes to you and is taxed as personal income. All
business losses are your personal losses and they come out of your pocket. If
you stop working, the business stops.
In short, you are the business.
To start a sole proprietorship, go to your favorite Search Engine and type in “sole
proprietorship” and the name of your state, municipality, etc. You will find links to
your federal and local regulatory boards.
These government sites will tell you what you need to do and what paperwork
you need to file. The rules may vary somewhat, but the following is what you
should expect:
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• A business license: Many states, counties, and cities license businesses.
Some require licenses only for certain kinds of businesses.
• A Doing Business As (DBA) certificate: As a business, you will be working
under an assumed name. To prevent fraud, most places require that you register
assumed business identities.
• A zoning permit: To control what kind of businesses are allowed to operate in
residential areas, the Department of Zoning in your area may require a special
permit.
Sole proprietorship is the simplest form of business organization, and the most
popular. Roughly 75 percent of all businesses are sole proprietorships. They
are easy to set up/operate, and are the most inexpensive option available.
However, there are risks with this type of organization. If something happens
and the business is sued, you will pay the bills out of your pocket. This is the
biggest drawback of a sole proprietorship your personal assets are on the line.
You can lose your kid's college tuition, your car, your cash assets, and even your
house.
The chances of being sued for designing a bad Web site are pretty slim, and
even if a client does initiate legal action, you would expect the costs to be limited
to a refund of the fees paid. The risk is there just the same so it’s important to
take that factor into consideration.
2) Partnerships
Your next option is a partnership. This can be considered a proprietorship of two
or more people.
Many of the rules and requirements associated with the sole proprietorship also
apply to the partnership (e.g., DBA, zoning permits, etc.) But there is an
additional consideration for partnerships… “The Partnership Agreement.”
The Partnership Agreement is a legal document that outlines the relationship
between all partners. For those involved, it defines job assignments,
responsibilities, profit sharing, and expense sharing. The Agreement also
addresses how business disputes are to be resolved, how to dissolve the
partnership, and how to deal with the resignation or death of a partner.
Basically, it defines who does what and who gets what.
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Never enter into a partnership without a Partnership Agreement. Your Web site
design business is not a social activity and money can make friends, relatives or
colleagues behave very strangely. This is a business. Treat it that way.
There are some real advantages to starting a partnership…
• You will have more people to share the work
• There may be more funds available to get things started
• More people means more experience to draw from
These are all good things. However, a partnership can have its problems.
Like sole proprietorship, the partners are the business. Your personal assets are
at risk in the event of a lawsuit.
And in many places, there is an additional risk each partner can be held
financially responsible for 100 percent of business debt. You can wind up
personally responsible for expenses incurred by your partner. If your partner
charges $100,000 to the business and leaves the country with the money, you
will be responsible for repaying it.
This is not a good thing. So the lessons to learn here are…
• Only go into business with people you trust
• Visit a lawyer and set up a detailed Partnership Agreement before you do
anything else.
3) Corporations
As was just outlined, with a sole proprietorship or a partnership, you are the
business. There is no legal distinction. What you do, your business does. Any
profit is your profit. And if there are legal problems, they are your personal
problems.
Corporations are different.
A corporation is a legal entity all by itself. Instead of just working with you, your
clients will deal with “The Corporation” a corporation that can enter into
contracts, pay taxes, and be sued.
But if your business is sued, your personal assets (car, house, etc.) will be
protected because you are just an employee of the corporation. This is a good
thing.
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Yes, your clients will still talk to you on the phone and you will still write the
checks and pay the bills. But there is a key difference to note. You are no longer
acting as an individual. You are now a company representative, not an
individual doing business. And it’s this distinction that protects your personal
assets.
Setting up a corporation is usually a little more involved and a little more
expensive than setting up a sole proprietorship or a partnership. You may feel
it’s worth the money for the legal protection and peace of mind it brings.
The big question is… which is the best choice for your Webmaster business?
And the answer is… it depends.
It depends on what your long term business goals are, how much work you
expect to get, who your target market is, where you live, and so on.
Most home-based businesses start out as sole proprietorships, but my
recommendation is that you incorporate as your first step. It’s a little more work,
and it costs a little more, but it’s worth the effort to protect your personal assets.
If you aren’t sure which way to go, pick up the phone and call your local Small
Business Association or Chamber of Commerce. Speak to the people who do
this stuff for a living. They can’t make your decision for you, but they will take the
time to review the details of your situation and give you the advice you need to
select the option that is right for you.
OK, the next step…
Your Business Plan
A business plan is a written document that defines…
• The purpose of your business
• The products and services you will offer
• Who your clients will be
• The legal construction of your business
For most new entrepreneurs (like you!), writing a business plan is the hardest
part of starting a business. That’s because you don’t know what to expect and it
can be very difficult to plan things you have never done.
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And because it can be such a pain, some people just don’t bother to do it. Big
mistake! According to the people who study these things, lack of planning is the
#1 reason why many small businesses fail.
Before you start a business, you need to know what you are going to do and
how you are going to do it. If you don't, your new business will run into trouble
as soon as you begin allocating your limited resources. You will wind up
spending your time and money on those things that seem to need immediate
attention but have no real bearing on your long-range business goals. And then,
when the really important things come around, your business will suffer because
you will not have laid the groundwork to address them and your available funds
will have been depleted.
The bottom line is… you must do the prep work.
So fire up the word processor or go get a pencil. We will walk through the basics
together. It will then be up to you to complete the full business plan afterwards…
1) Let’s start with the name of your business. I don’t know the name you’ve
chosen, so I’ll make one up for this exercise…
Business Name: Apple Web Site Design, Inc.
2) Write a very brief statement that tells what kind of business you are in.
Obviously, you are designing Web sites. Will you be doing anything else?…
Type of Business:
Web site design and consulting services for private organizations and small
businesses.
3) Create a “Statement of Purpose” for your business. Some people call this
section a “Mission Statement.” Think of it as an explanation of what your
business is, what it does, and any features or assets that make your business
special or unique (i.e., stand out from the crowd).
Here’s an example, but don’t just copy this presentation. You need to think about
your own business reality and customize this section to reflect your particular
situation…
Statement of Business Purpose:
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Apple Web Site Design, Inc. is a home-based design company that provides
quality Web site design, consultation, and Internet services to small business
owners at competitive prices. The company will focus on providing Web site
design services to professionals and to companies that provide business-to-
business (B2B) and business-to-consumer (B2C) services and products.
As an Internet-based business, our primary storefront and primary advertising
tool is our Web site (www.applewebsitedesign.com). This site makes us
available to our prospective clientele twenty-four hours a day, seven days a
week.
The business draws on the experience and education of the owners, who have
on-the-job experience in business management and web site design. This
comprehensive background provides the skills necessary to support business
operations, technical aspects of a computer-based business, and the design and
development of products for our clients.
4) List the services that your business will provide.
Look at the sample list below. Cross out those that don’t apply to you and add
others if you wish. If there are services that you won’t offer now, but expect to
offer in the future, list them as well and indicate when you intend to start
providing them…
Products and Services:
Apple Web site Design, Inc. will provide a full range of web site design and
development services including:
• Web site design services
• Consultation services
• Web site reviews
• Search engine optimization
• Copywriting
• Web site maintenance services
• Graphics services
• Logo development
• Photo editing
• Database development
• Subcontracting
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5) Develop a list of potential clients who might be willing to pay for a Web site.
You may wish to serve a variety of markets or you may want to target a particular
group only.
Clientele Served:
Our clientele will consist of business-to-business companies, business-to-
consumer companies, nonprofits, and professionals (doctors, lawyers, etc.) who
are looking to promote their services and products on the Internet, and other
Web site designers that need subcontractors for specific tasks.
6) Define your business goals clearly. This is often one of the most difficult
sections of the plan to determine.
Don’t consider your goals as wishes on a list (“I’d like to sell 500 Web sites this
year”). Write down a set of well-defined realistic objectives. All your activities for
the next few months will focus on meeting them. For example, if you plan to sell
six Web sites within the next twelve months, you need to give some thought as to
how you are going to accomplish that feat.
Take some time to consider your services and potential market. Set
business/sales goals that you think are challenging, yet achievable. Stay away
from goals that are way beyond your reach or that are too easy to attain…
Business Goals:
Our goal is to become profitable by the end of the second year of operation. We
will do this by selling a minimum of six Web sites in the first year and twelve in
the second. We will achieve these goals through aggressive marketing and
promotion to specific segments of our target market that is professionals
(doctors, lawyers, etc.)
7) List your coordinates. These include…
a) Civic address (which is also your home address!)…
Location of Main Office:
Apple Website Design, Inc.
123 Winesap Road
Seattle, Washington 98101
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b) Mailing address. This might be the same as your Main Office, or it could be a
private mail box…
Apple Website Design, Inc.
413A Granny Smith Ave.
Seattle, Washington 98101
c) URL…
http://www.AppleWebsiteDesign.com
10) Describe the legal construction of your business. It can be a sole
proprietorship, partnership, or a corporation. It may also have special features
depending on local requirements and regulations…
Legal Construction:
Apple Web site Design will be structured as an S-Corporation.
11) Define who is running your business and their position in the company.
The format of this section may change depending on the legal construction…
Principal Officers:
Your Name President
VP’s Name Vice President
Treasurer’s Name Treasurer
Your business plan is a living document. It will change and evolve as your
business develops. With time, you will gain a better understanding of how
everything fits together, and your original plan may require some revisions. Try
to keep it in tune with your daily reality.
(Start Your Own Home-Based Website Design Business provides a more in-
depth discussion on this essential business element.)
Now for a quick summary of your actions so far…
You have gained a basic understanding of the three kinds of business structures
and, hopefully, you have decided which is best for you. (If you are still not quite

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