Do You Need A Business License To Start An Online Business?

Key Takeaways

hi my name is Miles Beckler and in this video I'm going to answer a viewer's question and that is do I need a business license in order to start one of these online businesses now before I get too deep into this a couple of things first of all I'm in the United States and my knowledge does not expand beyond the United States I really don't understand how it works in other countries number two I'm not a lawyer and I'm not a CPA so ultimately you will want to work with a lawyer and a CPA at some point but me having gone through the process I'm happy to share my take on it just don't take this as legal advice or as accounting advice because I'm not technically allowed to give that sort of advice with that said I've spent a long time understanding this and the simple answer is no you don't need a business license in order to start a simple affiliate marketing business um if you're going to sell physical products if you're going to be buying at wholesale and selling maybe but ultimately I think it's in most people's interest to create an audience and to sell affiliate products to that audience and or services and for both of those you do not in any shape way way shape or form need a business license so you are able to operate as yourself it's called a sole proprietor is what you would be operating as and essentially you would need to fill out a W9 form for whoever's going to be paying you so if you're getting commissions from let's say an affiliate Network like ClickBank ClickBank is going to require you to fill out a W9 form and essentially you put your name you put your social security number you sign it and you mail it to them and what they do is they track how much money you earn and at the end of the year they send you a$ 1099 form a 1099 form is essentially like an independent contractor's form this is you being an independent contractor and what this means is since you're not an employee they don't withhold any tax they don't pay your unemployment insurance and they don't pay into your Social Security you're required to do that on your own now there's some really cool benefits that come along with having one of these businesses we'll talk about those some tax deductible benefits we'll talk about that on the next video but for right now you just need to understand that you're able to move in these directions if you can start selling WordPress Services content writing services any Individual Services you can start right away and when it comes down to the question of how do I get paid generally speaking they're going to mail you a check or if you're an independent service provider you would just use PayPal you can send them an invoice have them PayPal you the money that's the simplest way to get started personally I operated as a sole proprietor for years at this point I have started a corporation and you would want to eventually start either a corporation or an LLC and the reason most people go in this there two reasons most people go in these directions number one is you get some tax benefit out of it as a sole propri proprietor you pay self-employment tax which is a little bit on top of a normal tax it's a higher tax bracket um you can also get a little bit more of um kind of protection legality protection or liability protection when you use and structure some of these uh business models uh for you but ultimately you don't need to go out and start an LLC or a corporation to move in this direction in fact I think that's a hindrance it costs money it's like 800 to 000 minimum for the filing charges and if you hire a lawyer to do this for you it can easily cost you thousands of dollars now one other tip moving in this direction just get started right you'll be using your social security number as you and you'll be reporting income to yourself track all of the income that you make very very religiously and track everything you spend on your business for all the tools and all the advertising very very religiously I would recommend you go set set up a separate bank account you could run this all through a PayPal account if you want or just set up a separate bank account at a different bank with a totally different card in your name and deposit checks you get in your name from the affiliate sales or from vendors and clients who hire you for services deposit those into that separate bank account when you have business expenses if you want to pay for advertising if you want to sign up for clickfunnels you would then pay for those business expenses out of that separate account and what this will do is is it'll save you a lot of kind of like mental challenges come tax time because you do need to report all of your income and you are able to report all of your expenses separately from your normal wages which is called W2 so if you're an employee somewhere you'll have W2 income and then you'll be creating 1099 income um personally one of the greatest things I did in getting started was hiring a really good tax person who's been able to help me kind of navigate this area um it my all of my funds went into one account my personal stuff my job stuff my business stuff went all into one account and at the end of the year it was a nightmare so if you're going in this direction a just jump in get started get running but b trust me go start a separate bank account you're going to save yourself literally dozens if not hundreds of hours of hair polling bookkeeping stuff by simply keeping your business expenses in one spot and your personal in a separate account so I'm miles Beckler and thank you very much for watching I do appreciate the questions again this was a question from a viewer if you have a question leave me a comment below or if You' just like to get the next videos as they come out click subscribe above and I'm happy to share them with you thanks for your time have a great day