Your First 5 Steps to a Legal Online Business (Checklist)

So you’ve got the business idea. You’ve even picked the business’s name and you might’ve even secured the Instagram handle for it. But now you’re sitting there staring at your laptop being like, what legal steps am I supposed to do to make this thing legit? I know you want to start your online business the right way without getting in trouble accidentally making a costly mistake, or just flying blind and feeling like you can’t do anything in your online business because you’re not safe. The problem is every time you search for help on this topic, you’re left with more questions than you have answered. Talk about articles full of legalese and chat GPT prompts that you’re not even sure are accurate. Not only is it making you want to slam your laptop shut, but it even has you questioning whether you should start this online business in the first place.

In this episode, I’m breaking down the exact first steps to take to legally set up and start an online business the right way. In fact, I’m going to teach you how to do it in just three days from choosing the right structure to form your business to contracts and everything in between. I’ve got you covered too, you can get this thing started and start growing it with confidence.

Let’s hop into what you can get done on day number one.

All right, on day one, I have four tasks for you. That might sound like a lot, but these are actually really quick tasks. I promise you you’ve probably thought more about these tasks or spent more time Googling them than it would actually take to get them done.

The very first thing I need you to do on day one is to nail down all of your business information. What is your business’s name going to be? What exactly do you want it to be? What address are you using for business mail? What email address are you’re using? All that kind of stuff. You’re going to need all that information for all the next steps we’re about to talk about. The thing here is really important, and again, might seem minor, is that this information is completely nailed down before you take the next steps. Because if you start registering different things in your business with different names, you’re going to have a lot of extra work to do down the line, so thank me later.

The second thing I’m going to have you do today is go get an EIN, that’s an employer identification number from the IRS. It’s free. It takes about five minutes to fill out an application online and you instantly get an EIN letter by email. You need to hang onto that letter and save it because you’re going to need it for a bunch of the next steps.

Think of your EIN number as like a business’s social security number. It’s just a way to be able to go by a number that’s not your social security number when you’re doing things for your business. Like I said, it’s free and it’s really easy to get.

Okay, we’ve already gotten done two of the four things today, and that was like a total of five minutes. So let’s hop into the third thing we need to do on day one.

The third thing you’re going to do is actually form your business. And yes, this can be done in one day, it can be done in less than an hour. It’s so easy. In America, you can form your business online by going to your state’s business website, looking at the different entity types that they have available for you, like an LLC corporation, sole proprietorship, partnership, et cetera, and you can look at what the different pros and cons are, but you can also look at what the different requirements and rules are for that entity type in your state. Sometimes just by doing that, it knocks one of the options out for you right away.

Now, since I’m not your lawyer, I can’t tell you which one you should choose, but I can tell you some of the pros and cons of the two major ones that most online business owners start with.

The two different business entity types that most online business owners start with is A LLC or a sole proprietorship. A sole proprietorship is a great like basic entry level, quick, fast, easy, usually a lot cheaper way of just getting a business registered. There is a major con to sole proprietorships, however. In America, when you register your business as a sole proprietor, you don’t get. Any personal liability protection.

So that means that there is no legal separation between you and your business, which makes you personally liable for everything that happens in your business, not great. Now, an LLC on the other hand, is not usually that much more technically difficult to register. It’s usually similar process with a few forms and a fee. However, the fees do tend to run a little bit higher, and depending on what state you’re in, they can run a lot higher, like California, for example. Now, that’s not always a reason just to dismiss an LLC out of hand because once you find out about the big pro when it comes to an LLC, you might not really be left with any other choice or might not think any of the other choices are worth it.

The big pro to registering your business as an LLC is that you are offered what’s called limited personal liability protection. That means that in theory, you are supposed to be legally separated from your business so that you are not personally liable for what happens as a result of your business and it’s actions.

Now, in some states, this is a little more difficult when you own the business by yourself and in other instances, this cannot be the case when you don’t actually act like a business. It’s one of the things I spend a lot of time teaching my customers about inside of the Ultimate Bundle®® is that, yes, it’s great to go out and get an LLC or get contracts and do all that stuff, but you actually have to act like a business in order to be afforded the protection from it that you think that you have.

Okay. I’ve got one last task for you here on day one. Your last thing today is to go out and get business insurance, just to be super clear, what you’re probably going to be able to do is apply for business insurance. So it might take a day or two for you to get a policy back, review it and sign it, and then it goes into effect right away.

But this is really the only part that takes any work on your part. Which is why I think you can get it done in day one. Now, business insurance is what financially protects your business because if your business ever got sued or threatened to be sued and you had business insurance and you were threatened to be sued or sued for something that that policy covered, then they would provide you with an attorney, pay that attorney’s fees and their bills, and then pay any sort of settlement or judgment that’s found against your business, of course, minus your deductible, just like any other insurance.

Okay, so that wraps up day number one. Just to recap, we got all of our name and business info in order. We got our EIN, we formed our business and we got business insurance all in a day. It won’t even take you the whole day. That’s the best part. So rest up and let’s hop in to day number two.

Day number two is even easier. This is where if I were you, I’d probably stop and get a coffee, something a little cozy. Take some of the paperwork from all of the things that you gathered in day one. So I need you to get that EIN letter, um, that you got from the IRS. I need you to take any paperwork you got back from your state, like articles of formation, certificate of formation. Anything that you got, um, showing that you’ve registered your business and you’re going to take that over to a bank near you to open a business bank account. Yes, I absolutely recommend that you get a bank account that is labeled as a business bank account.

This isn’t just me being an annoying lawyer, stickler. This is actually a legal requirement, especially if you decided to register an LLC. So you need to have a separate bank account with very clear funds that are not being used for your personal life or your personal money is not flowing in and out of it just for your business. Once you’re done at the bank and you have all of the information regarding your business bank account, I want you to go home and open up a business payment gateway.

So I’m talking things like PayPal, Stripe, whatever other kind of platform you wanna use. It doesn’t matter, but same goes for this platform. You want to open the business version of whatever you decide to open. All you do is go onto something like PayPal, open up a business PayPal account, use the information you just got from opening up that business bank account, use that EIN number you got yesterday and set up your payment gateway.

This is where moving forward, when you get all of your clients and you start making lots of sales, this is where the money is going to flow into, and then you can transfer it from there to your business bank account.

We only have one day left to get this business baby set up, and I am so excited because it’s gonna be easy on day three. We’re simply just focused on getting your contracts and onboarding or sales system set up. So I want you to think about whatever it is that you are selling right now. We can just focus on what you’re starting out with. We don’t have to worry about the fact that you wanna start selling something else two years from now or six months from now.

Just focus on what you’re selling right now. Get a contract for it, right? That’s what you need. I obviously offer DIY legal templates, downloadable legal templates. I also have the Ultimate Bundle® that gives you a pack of 14 of them. By the way, the Ultimate Bundle® is going on sale next week from June 23rd to June 27th, only.

It’s a huge, huge sale. So if you’ve been thinking about the bundle and need your legal templates. You’re going to wanna keep your eyes out for that, but you need to get your contracts for whatever it is that you’re selling, right? So if you’re offering services, like coaching, for example, you need a coaching contract. If you’re going to start an online course, you need what I call a terms of use contract. That’s the kind of thing you put at checkout. Same goes if you’re selling digital products or downloadable items. You would wanna put something like a terms of use at checkout. So your job today is just to list out the services or products that you’re going to offer right away and figure out which contract you need for that.

I have a really handy free legal guide for you that I’ll drop a link for in the show notes down below, but that’s where you can actually go to see exactly whatever you want to offer or sell online, which contract you need for it. So I’ll make it super easy and I’ll include a link down to my free legal guide so you can start your online business today.

Once you get the contract or the contracts that you need in place, we just wanna make sure you set up a smooth purchase process. So if it’s services, you’re going to want to set up whatever tool you’re using on the backend to deliver your contract and your method of payment. If it’s a digital product, you wanna go ahead and test it and put the terms of use at checkout.

Make sure people have to check something to agree to it, and make sure that they’re also getting a copy of that as a PDF once they’ve purchased. Honestly, that’s really what you need to do to just get the basics in place. Of course, on days 4, 5, 6, 7, all the way into the future in your business, there are so many things that you can layer and add on.

If you have a website, for example, you want to consider getting the three website policies, um, one of which is legally required, the privacy policy. The other two is the website disclaimer and the terms and conditions. Of course, if you’re offering different services in your business, you might need different contracts.

If you’re going to hire, uh, contractors, you want an independent contractor agreement, like there’s so many things you can add on, but I would encourage you not to get too caught up in all the what ifs and the add-ons yet. If you’re just starting out, the things that we’ve talked over today are a fantastic foundation because you’re going to protect your sanity and your boundaries with your contracts.

You’re going to actually protect yourself personally if you set up your business the right way with forming your business, and you’re going to protect your business’s money with the business insurance. So it’s a really nice trifecta that has you protected from many different angles for a beginner.

Right? So we’re not talking about Amazon and target sized businesses yet, if that’s okay. We don’t all need those or want those, but we do need to have some foundational level of protection in place, and that’s really what we’ve set up in these three days.

Of course there are even more steps, and I have even more information to give you about exactly how to legally set up an online business the right way. That’s why I’ve created a free legal guide where you can get a step-by-step guide to exactly how to set up your online business. So go and grab that legal guide now, and if you’re like, I just wish somebody would tell me exactly how to get all of these things done, plus just give me the contracts I need. Like you don’t wanna spend all the time, money, and energy even going to a lawyer near you who’s gonna charge you thousands of dollars. Per custom contract. Well, luckily that’s why I’ve created the Ultimate Bundle®, which has over 4,000 of your online business peers in it already, because it’s the one stop legal program to get you legally set up and protected in your online business.

It’s where I’ve dropped over 14 plug and play contracts and website policies. So I’ve got you covered for all of your client contracts. Anything you’re gonna sell with digital products, courses and memberships. Even if you sell products on platforms like Etsy or Shopify, it also includes your website policies, a contract to hire contractors and, and an affiliate program contract so that you can even start to make affiliate income in your business.

From next week, June 23rd to June 27th, only the Ultimate Bundle® is on sale. You don’t wanna miss this. If you’re thinking about getting the bundle, make sure you sign up for my legal guide down below, because when you do, you’re going to start getting my weekly email, Sam sidebar, where I drop legal tips and marketing advice that works for my multi seven figure business.

And that’s how you’re also going to be the first to know when the Ultimate Bundle® goes on sale on Monday, June 23rd, so don’t miss it. Click down below to make sure you get my free legal guide, and I can’t wait to see you inside the Ultimate Bundle® soon.

Thanks so much for listening to the On Your Terms® podcast. Make sure to follow on Apple Podcasts, Spotify, or wherever you like to listen to podcasts. You can also check out all of our podcast episodes, show notes, links, and more at samvanderwielen.com/podcast. You can learn more about legally protecting your business and take my free legal workshop, Five Steps To Legally Protect and Grow Your Online Business at Samvanderwielen.com and to stay connected and follow along, follow me on Instagram at samvanderwielen and send me a DM to say hi.

Thanks so much for listening to the On Your Terms® podcast. Make sure to follow on Apple Podcasts, Spotify, or wherever you like to listen to podcasts. You can also check out all of our podcast episodes, show notes, links, and more at samvanderwielen.com/podcast. You can learn more about legally protecting your business and take my free legal workshop, Five Steps To Legally Protect and Grow Your Online Business at Samvanderwielen.com and to stay connected and follow along, follow me on Instagram at samvanderwielen and send me a DM to say hi.