So you have a great business, and you’re ready to watch those dollars just roll from online orders into your bank account from all the customers who will be buying your goods or services. Well, unfortunately it’s not as simple as that, although it’s not terribly complicated. There are some things you need to do, and they involve boring paperwork. However, that paperwork will be worthwhile once the money does start rolling in from customers.
Obtain a federal Tax ID
It’s kind of a necessary hassle, but a Tax ID is something you need to identify yourself as a business. All that is required for this is to fill out an SS-4 form. No fee is required. This is a form that asks you to define your business not only by type, as a sole proprietorship, partnership, etc. but also by function and size, as in how many employees you expect to be involved in the business in the next year. It’s a standard tax form that only takes a couple minutes to complete, but opens up the door for you to start making money in your business. The ID number should be sent to you within two to three weeks. As an addendum to this, if you operate your business out of your home and don’t want your home address associated with your merchant account, you should also obtain a P.O. box.
Register your business locally
This is particularly important if you operate a sole proprietorship or a partnership under some name other than your own. Generally all that is required for this is to go to your county office or county clerk and pay some nominal fee.
Open a merchant account at your bank
Chances are that you already have a personal checking and savings account. However, you will also need a merchant account to start receiving payments from customers. You also need it to keep your business finances separate from your personal finances. Ultimately the payment service you choose will be tied to this merchant account. As with any bank account, you may want to visit several banks and see which one offers the best option for you.
Choose your payment service
With all of these things in place, you are now ready to choose your payment service. PayPal is the most popular way to receive payments online, which means that at least a lot of your customers and potential customers may already have an account. Furthermore, you can add the PayPal button directly to your site. However, other payment services do exist. Like everything else with your business, you should choose the one that fits best for you.
This article was written by Gary Schwind for CBS Small Business Pulse.