Week 5- Legal Structure, Licenses, and Taxes

Legal Structure

When starting a business, state guidelines must be followed regarding how the business should be licensed. Even home based businesses could face fees and penalties if it is not registered properly. Types of structures include:

Sole Proprietorship- A business owned by one person who is responsible for both the profits and the debts. This is the easiest Legal Structure to set up, but comes with the most legal liability.

Partnership- Owned by two or more people. Similar to Sole Proprietorship in that the legal liability is unlimited meaning that creditors can come after personal assets in the event of debts not being paid. A Partnership splits the legal liability. It is also easy to set up.

Corporation- When set up, the Corporation is an independent entity separate from it’s owners. It has the ability to buy, sell, or own property. It can sue and be sued. They are taxed more heavily, but the owner’s personal assets are protected. The ownership can be transferred but it takes quite a bit more money to establish a Corporation.

S Corporation-Like a Corporation but does not have the same heavy taxation. It is taxed like a Partnership but with stipulations from the IRS. These include limits on what type and the number of shareholders, what type of stock is issued, and where the company earns it’s money from.

LLC- A good middle ground for companies. It combines the lower taxation with the protection of a Corporation. There is more licensing paperwork and fees involved with LLC’s but the protection of the personal assets of the owners makes it appealing.


For my project I choose to have a Sole Proprietor Legal Structure as an Assumed Business Name. In the State of Oregon, I would not have to file this if it were under my name with something like “Enterprises” at the end. But because my company is another name altogether- “Restful Nook” I file under an Assumed Business Name.



For Oregon: https://secure.sos.state.or.us/ABNWeb/regCERPrinciple.do

Licenses and Taxes

For a Sole Proprietor operating under and Assumed Business Name, in my city, I must be licensed even with a home-based Affiliate Blog. Taxes are filed Federally through a 1040 Schedule C and the same through the State of Oregon. I am responsible for the taxes on my earned income. Because I will have the business set up, I will be able to claim things on my home based business, such as a portion of my home (if it is set up to qualify), and percentages of things like cell phone use, internet, related conferences, and any other expenses incurred for my business.






Week 4- Site Design and Credit Card Payments

Site Design

The most important thing to keep in mind when it comes to web design is the ease of navigation and reading. The site needs to be a space in which people feel comfortable in so that they stick around and will purchase products or read the content I develop. This is done through having a pleasing type face, font, and layout. Not all font types are available on all machines or browsers, so it is important to use one that is, or include an alternative in the coding so that people can view the site as intended.

Colors should be easy to read, not flashing or crowding- pretty much avoid everything akin to what Myspace looked like.

Layouts should give room for the words to breathe and images should have a alternative text to display if it does not load, or if someone is using a program to read the content since they are blind. Easy navigation is essential as people will leave the site in frustration if they cannot manage to get to where they want to.

It is important that key search words are being used in the content part of the website so that search engines are sending traffic to your website.


8 Tips for Designing a Great Website

Basic eCommerce Web Design

Designing a Website Knowledge Base

Credit Card Payments

Paypal is one way easy way to receive payments on a website, though there are fees charged for the service. Once an account is set up, a “Buy Now” button is easily placed the website under the product image. The benefit to this kind of pay system is ease in which options are created within the button if there are multiple sizes or colors. Paypal is an internationally recognized payment system that people trust. The company using Paypal will still have to absorb the liability for any fraudulent purchases.

Using Paypal can be a bit time consuming if the customer has not yet set up a Paypal account, resulting in the loss of the sale if the person does not wish to register. It is important to see how the demographic I am targeting prefers to pay.







Week 3- Site Builders and Hosting

Site Builders

When it comes to a site builders, my skill set determines the which type I will be using.

1. Drag and Drop- These sites have premade templates and are a user friendly option especially for anyone not familiar with coding. They often come with a bit of support. Many can handle ecommerce or a blog-type format. The downside is that there is a loss of control so it may not be able to expand the way I planned as my business grows.

Examples: Wix.com Weebly.com Webstarts.com Bluevoda.com

2.Content Management Systems-In this category there is more flexibility, but that comes at the price of having a knowledge base to use that flexibility. They have the ability to build most any type of website.

Examples: wordpress.org squarespace.com joomla.com drupal.com

3. html editors- More difficult to use in that a knowledge of coding is essential to use. This allows for the most flexibility. Any idea is limited only by my ability to perform it. There are free templetes available at www.openwebdesign.org

Examples: Dreamweaver.com myfreewebsitebuilder.com Trellion

For my content based business that will be using affiliate links, I decided on wordpress.org. I already am familiar with the site, but have much more to learn. I want to use this class and business as a way to continue to become more familiar with the program. WordPress offers more than I need for this business model, but will allow me to easily expand to ecommerce and reservations for my Tiny Homes.

Later, I want to get into understanding Dream Weaver. I do not know anything about photoshop, and once I take the class on it, I feel like I will have the skills that make Dream Weaver a great tool to present a visually stunning website. Also, it works with WordPress.org and other sites, so my pursuit of wordpress is not all for naught.


When choosing a host, there a several criteria to weigh to decide which one is best for my situation. Some criteria I considered were: price per month, how long I am locked into using that host, if they offered an AdWords credit, and if a domain was included. Other criteria that should be considered is: the level of support offered, any other add ons that I would need to buy anyway (such as WHOIS protection), if email comes with it, and the amount of space you are allotted. Many of the hosting sites are unlimited in the space you can use. It is important to examine if the site builder works well with the hosting site. For example, several hosting sites play especially well with wordpress.org, thus making it easier to have them together.

Examples of hosting sites: Bluehost.com HostGator.com JustHost.com ipage.com

Week 2- Brokers, Manufacturers, Wholesalers, Affiliate and Drop Shipping Models

And just like that we jump into who to procure product from and affiliate and drop shipping models! The speed in which we must internalize knowledge in this class is fast. I have learned, though, that this is the best way to learn anything on the computer and it is best to not worry but just continue to read, absorb, read, absorb. It may all be muck on day 1, but by day 5, the picture is clearer.

Brokers, Manufacturers, Wholesalers

To pursue which kind of organization I will procure my goods from, I decided that the criteria I could use would be: lead time, minimums and price. Other criteria that could be used to evaluate would be: quality,or variety of products. By creating a vendor score card in which I rank the ability to adhere to that criteria, I can flush out which vendor would be best for the current situation of the business I want to develop. Ranking seems fairly subjective, so I decided to create a vendor selection criteria that gave the ranges that each score must fall into. I did not want to guess that I thought the lead time of 4 days was a “5” in ranking, I wanted to break down what each number would mean.

Vender Selection Criteria
Lead Time Minimums Price
“1” if 21+days “1” if 301+ items “1” if $2.50+
“2” if 15-20 days “2” if 201-300 items “2” if $2.01-$2.49
“3” if 10-14 days “3” if 101-200 items “3” if $1.51-$2
“4” if 4-9 days “4” if 2-100 items “4” if $1.01-$1.50
“5” if 1-3 days “5” if no minimums “5” if $.01-$1

Not all criteria can be broken down into ranges, but for this application it could. By giving the criteria weights, I could make the ranking reflect my concerns.

Aviators- Vendor Score Card
Weights 0.3 0.4 0.3 Weighted Totals Rank
Alternatives Lead Time Minimums Price
Alibaba 1 1 5 2.2 2
L.A. Wholesalers 4 4 2 3.4 1

After thinking about need to eventually be able to evaluate many vendors, I decided that taking the time to consider what ranking each criteria deserved, I made a formula for excel that would calculate the criteria. Instead of consider what rank a 10 day lead time would equate to, I made it so I could just put the 10 in one spreadsheet, and it would automatically update to a ranking of “3”. I did this by making an IF/AND function that related to the ranges I wanted. Since I could not find any on the internet I could copy, I include it here for reference later so I don’t have to think so hard next time!

=IF(B10<=3,5,IF(AND(B10>=4,B10<=9),4,IF(AND(B10>=10, B10<=14),3,IF(AND(B10>=15,B10<=20),2,IF(B10>=21,1,Error)))))

I know that large corporations like Honda use a more complex version of this to evaluate their vendors. Sometimes when a business is small, it is better to go with a shorter lead time with less risk at the sacrifice of profit until the company grows. By learning the small steps of being honest about the criteria and importance of those items, I can set my companies up for success and stay within the parameters my time and risk allow.

International brokers:

Alibaba Global Sources Small Volume Go Wholesale

Affiliates and Drop Shippers

I knew what an affiliate was in a vague sense before this unit. I read enough mommy and design blogs to see their links to affiliate products. I did not see how the application worked outside of pushing women to buy “these really cool napkins whose print will change the entire dynamic of your party so that everyone will be your friend!” (Although, I do really love a cute napkin) Now I understand that truly any topic can be utilized into an affiliate model. Pick a topic, write about it, review some product as an added-value marketing, provide a link. Done.

It certainly is content driven for most applications which requires time, but since I love to write it sounds like fun. I also see how an affiliate model can drive traffic to other business I develop further. Starting with an affiliate model can be a good way to enter eCommerce. Transitioning to drop shipping, merchandising, or other endeavors all can be easier by starting with affiliate. If anything, the content can be used to drive traffic to other websites that I develop for customers to buy from me.

Affiliate Links:

Affiliates for Newbies

Amazon Affiliate Program

Google AdWords

Commission Junction

Bass Pro Shop


Drop shipping was up for review next. I love drop shipping. My husband has done it as part of his functions at every job he has had and I find it interesting. “You mean, you can sell things for a higher price and you don’t even have to touch it?!” When it comes to if this is the right model though, some of the criteria to consider are: profit per item, infrastructure requirements, and liability. The profit per item can be substantially higher than the affiliate model, but the infrastructure required for returns, accounts payable and receivable, and the liability of when returns go wrong. I have witnessed and been apart of the conversations between shippers and manufacturers. “No, it’s YOUR fault, YOU pay!” Ultimately, the company suffers and the customer is mad. Before I jump into drop shipping, I need to make sure I am ready to cover the extra shipping costs and sometimes eat the returns that go wrong. Also, another problem that can arise is something called “charge backs”. This is when someone fraudulently claims to their financial institution that they did not make a purchase that they did. The company always eats that costs.

Drop Shipping Links:

From Zero to a Million Users

Encyclopedia.com Drop Shipping

Product Sourcing

Week 1

This week was an interesting start to eCommerce. The main idea of if a product or a business model should be chosen first was the focus. I decided to write both an essay for choosing a product first and another essay for choosing the model first to see which argument I could present stronger. I first was inclined to pick a product first as the ultimate path to follow, but upon further thought, I decided to go with picking a model. This is especially true if I am uncertain as to what product I should pick. By narrowing down the goal I have for my business then pairing it with a business model first, I will open myself up to products that I may have not considered before. Matching my capabilities and time constraints with the process ensures that I have the skills needed to carry the product forward to be successful. Also, the ability to duplicate the model with several products is also a pull for me to streamline a model process to create many businesses.

I keep feeling as though I should decide concretely what I should be doing for my business. I now think that I should be open to the knowledge that is coming and be will to change directions based on what I learn.

When it comes to picking a product or category to sell, Google Keywords search is an amazing way to quantify the number of searches and competition. By having a concrete number attached to the number of people searching for a word, it can show what opportunity truly exists.

Another concept I have been mulling over for the past months is the concept of never being ready. I have understood this concept better when applied to service. If I am to wait for the perfect situation for me to serve my fellow man, I will never serve. As I helped organize the community that I live in to help a homeless family with small children buy an RV, I had a few people close to me tell me that perhaps I should not spend so much time on it considering my own family is not doing great financially. I usually would have been inclined to listen, but I know that I was suppose to help this family at this time. Their suggestions were not entirely unhelpful as I made sure to be honest about how much time and energy I had to contribute to this cause. The lessons I learned about empathy and putting into practice the talk, “Are We Not All Beggars” was life changing.

This is how I thought about starting college back up. I have 3 children 5 and under and a demanding calling in the Relief Society presidency. I certainly have enough reasons to put something on the back burner for now. But, again, I felt the Lord prompt me when I heard in the Pathway presentation that for Latter-day Saint, education is a commandment. I felt as though the time was now. It would not be easy, but I would be successful. I remind myself of this this week when all 3 children have the flu which means no Preschool or a day of babysitting so I can complete my work.

When I attended at Portland Code School, I was so nervous! I knew from basics from online courses, and knew I used to be able to learn fast, but I had no idea what to expect. I showed up and we covered more in one Saturday then I had an entire semester in a class I took at BYU-Idaho. But I learned something about myself. I most certainly have lost a few brain cells after each child I had, but if I focused and left myself open to absorb the material, I could do it! And do it well! There was no way to feel as though I was ultimately prepared for the class, except my showing up.

As I worked with at a business doing shipping solutions while my husband is the General Manager for their other businesses, I have learned so many lessons from working closely with the owners. I have seen how waiting to know everything perfectly is not the way to do business. I have seen time and time again them take on a new idea with the assumption that they can figure it out. And they do! Their attitude is “Why Not?!” I am resourceful person who networks well, so I now see that I also can take on that attitude. It is taking those first unknown steps that is the most frightening.

It has been lessons learned in layers that has brought me to the point of being ready to learn the nuts and bolts about eCommerce and how to actually make it happen. The fear is gone, and excitement is now in it’s place.