The legal eagle

[gtp405]

Hi,

I am starting up a new business, and am having some serious trouble finding good information on the web which is why I'm glad I found this forum. So far all I can find is the obvious stuff about how to relate to customers so on and so forth, but I have some questions about the beginning basics that most of you have probably already covered.

Ok, so basically, without getting into detail, I'm doing a 3 branch business, but the important one is the branch I'm starting first. This particular one is an eBay business. I have several suppliers (wholesale) I'm going through. Don't worry they aren't scams as I was referred to them by Microsoft themselves. Anyways, I know there are several things I'm going to need.

an EIN, or DBA, or both

I have to do quarterly business taxes

I have to do sales tax

And so far I can't find crap online. I have a lot of questions like "am I going to have to put up twenty grand in start up costs? or is this something I can do for a much lower investment cost?" the reason I ask this is because I'm guessing I need to be able to compete with high quantity buyers, or are all quantities the same price per unit when buying from a supplier? Information about this and any info on the other three things I mentioned earlier would be very helpful. I'm glad I found this forum. So far the net has been pretty dry about this kind of information.

I do plan on talking to a business advisor, and I have one lined up, but I'd like to find out as much as I can before I do so.

Also are there any major legal things I need to be aware of besides the obvious?

Thanks!!!

[jasaunders]

There is loads and loads and even more loads of information online that will help you. Visit the SCORE website or the SBA website or Inc. or Entrepreneur magazine websites. You need to do a lot more research on your questions.

To answer very simply:
Yes, in most cases, the larger quantity you buy, the lower your costs.
As far as your investment, no one here can answer that, you need to research yourself. Contact your suppliers to find out their prices. Many/most of them won't tell you without an EIN, so you should get one first. It is free and takes only a couple minutes. You just need to complete form SS-4 on the IRS website.

As another alternative, search this forum for specific questions and answers. Questions like yours don't typically get answered because you can find the information yourself with a little research and people who ask questions such as "I want to start a business, how do I do it? What do I do first?" come off as extremely lazy, as the information is all out there if you look hard enough.

There could be many legal things to be aware of, depends on your business. You would always be encouraged to speak to a lawyer when starting a new business. If you have any specific legal questions, the YE forum has a new free legal section to provide assistance with legal questions (although not legal advice).

Put together a business plan. This will help you think about everything you will need to run the business. Costs, revenues, marketing, the market size, operations, and everything else. You can get good free templates here: Template Gallery

[gtp405]

Hi,

thanks for the quick reply. Yeah, I was pretty sure I was going to come off lazy, I'm a little stressed right now, but I belong to several forums and have a large number of posts there so I know how it goes lol. I know what you mean though, I'll provide more information.

I already have a complete business plan, I am working with a parter and we are planning on forming a LLC. I did about 6 months of research back when we originally started this business, unfortunently though there were some very very unfortunant circumstances that my partner went through at the time that were unforseen when we started planning so it fell through the cracks. My partner is now ready to work and we both have agreed on a very good plan. We are currently updating it since it's been about a year, and we generally try not to discuss too much of it as one of our branches (or at least that's what I call it) is very original and we do not want our idea stolen. As far as eBay though, that's not original and a lot of people do that, and that's the first thing we're doing so I feel free to discuss it openly. Here are some specifics:

My partner and I first started selling computers on eBay, we got about 50, had an inventory, and went about selling them. We had a ton of fun but there were changes to be made. The computers were older and weighed about 30 lbs. They were hard and expensive to ship. Even after that and the fact that they were old we had great success, and made far more money than one would think for selling what we were. We didn't do amazing or anything, but pretty good. Now we know what we want to sell. We have two specific distributors that we have contacted and both want to work with us. We will be selling small electronics online, ones that are easy to ship, things such as MP3 players, keyboards, mice, etc. Electronics is our strong point (we both work in IT) and we love doing it, so it's a good choice for us.

I have personally contacted these two distributors and asked them questions similar to the one's above about average start up cost and if the price of the product is proportional to the quantity bought. So far they will give me no specific information, which is understandable. I just don't want to get all signed up with them and then not follow through because I have to drop more many than I have to get a competetive edge. I guess that's a reasonable fear! lol

Other than that we have pretty much everything lined up, we have a great shipper, good resources (high speed internet, so on and so forth) and a good chunk of start up money. I guess what we're looking for is some type of first hand process on how to deal with taxes other specifics from people who are already doing this. As far as signing up to do business I know what I have to do and where I have to file, but like I said, I'm new to this so a little advice from more experienced persons would be great.

Thanks for the quick reply so far and I'll be doing more searching in the mean time. Hopefully this extra information I provided will help.

Thanks