Internet As a Business: You Must Follow Accepted Business Practices and Laws

You have always had this dream to have your own business. More importantly, you want a business that gives you autonomy, only requires an hour or so a day, you have the freedom to do as you want, and the time to do it. So you got this email that offers you a free website that will run on autopilot and make you thousands of dollars a day. You have visions of doing web administration as a business that will bring you those riches and fulfill your dream.

OK. So there was some exaggeration in that free website statement, in fact, it was all hype. The hook is that word “free”. Yes, they are offering you something for free – a $14.95 domain name and a free website design. What they don’t tell you is that the “upsells” are what get you. This free website is yours for only $37. What part of free didn’t they understand: you cannot charge $37 for something that is free. (There are choice words for someone who makes statements like that, ENTER YOUR WORD HERE _________.)

A Domain Name is nothing but a name. A Domain Name does nothing unless it is associated with a website design, or a better way of describing a website design is a container in which the content of your website lives. The free website design is thrown together in minutes by an experienced web developer who already has several hundred templates in his back pocket that require only several minutes of customization to make it unique for your needs.

The website design needs to be installed somewhere, either on your own “server” or on a managed host. So, minutes after you signed up, you are hit with the first upsell. First, for the free domain name, you want privacy so that anybody with a browser cannot find out your home address, telephone number, and breed and color of your dog. That privacy will cost you $10 per month.

The next upsell is for Domain Hosting. Your website needs a computer connected to the internet on which to run. One option, only for the brave and not-so-bright techies that believe they can do this themselves, is to:

  • Take an old computer,
  • Throw a network card in it,
  • Load it up with every disk drive from every old computer you own,
  • Download a free image of some flavor of Linux,
  • Fire up a free Apache web server and
  • Download a free copy of WordPress.
  • Connect that puppy to your router,
  • Get the dedicated IP address assigned to you by your internet carrier, and

BOOM! You have a working website.

NOT!!! The reality of this scenario is that you will have a HUGE learning curve to do simple things in LINUX. Every time you install a new software package or change an option, there is a great likelihood that you will spend your weekend either trying to fix what it broke, or reloading LINUX to start from scratch. You should also be prepared to dedicate a great deal of all this spare time you have after quitting your job because this new website will make you rich, learning about system administration tasks such as backup, restore, firewalls, security… You get my drift.

WordPress is a very cool web framework that has LOTS of free templates and plug-ins. But WordPress also has a learning curve associated with it. So at this point in your DIY strategy, you are several months into this and still don’t have a working website, still trying to find good content to put on your website, and haven’t made a dime from this thing they call Affiliate Marketing, yep, the thing that was going to make you rich in the first place.

Strategy Two: Punt

You now decide to suck it up, and pay the piper for that hosted domain. Well, it is not good enough to pay month to month for this service, because they warn you that the “Search Engines”, around which everything on the internet is driven, do not look kindly on short timers: they want a website that promises to be around for at least the next several years, so the hosted domain marketing team has now sold you at least a two year hosting package, with add-ons that include backup and restore services, additional security, a package to get you free links, a Search Engine Optimization (SEO) package, and free something or other that may as well be a partridge in a pear tree, which is only $1500 to renew after the first year.

The guy that charged you $37 for your free website, once you tell him the details of your new hosted domain, three days later is telling you that your website is now ready on your hosted domain using your domain name, “”. When you bring up your website for the first time, there are three articles, or “posts” that look really good. The deeper you dig, you see that you bought a website loaded with posts that start out “Ipson Lorum… “. So where is this content you were promised? Well, that is another $97 for the magic tool that generates this wonderful free content from now into oblivion. Pretty good deal: $97 for the tool that generates free content.

So you sign up for the package, but before your mouse pointer trails even disappear from the screen, they are begging you to become a “Gold” Executive Member that gives you BETTER free content for only $495. And all the free content you paid $600 for so far needs to be noticed by the illusive Search Engines so that you get more Traffic, because as we all know, this is a NUMBERS GAME: of the total traffic, 5% will click on an affiliate ad; 2% of those that click on the ad will buy something; your commission on that something they buy is initially 3% of the purchase price, but the more you sell, they increase your commission.

Well, how do you get the most traffic? Easy, buy some “backlinks” to other sites (a $15000 value for $297), and create a mailing list from everybody that visits your site so you, too, can become a spammer for the ridiculously low price of $19 per month.

So, you do what you are told, sit through EVERY BLASTED HYPE VIDEO they offer as “training”, buy all the recommended packages, and even sign up for the “Platinum” Package for Personal Coaching that will guarantee your success, worth literally millions, but available to you for only $2,995.

You now need:

  • A graphics package to create your own “Viral” banners: $97
  • A Video Editing system that lets you create your own YouTube videos: $295 for 1 year
  • A free screen capture program that creates videos in XYZ video format. Of course, nothing on the web except Android phones and several desktops play XYZ video format, so you need a converter for XYZ to FLASH that is only $69. The add-on to make those videos so they can be viewed on an iPad is another $29, a one-time offer.
  • A mailing list program for $29 per month. Just for signing up, they too offer you another FREE WEBSITE.
  • A Webinar Recorder that allows you to teach others about your success in the weekly Webinars you conduct. $59 per month.
  • With all this stuff going on, you need to monitor this environment wherever you are, so you upgrade your smartphone to a 4H-capable phone (oh wait, that’s cows and sheep – I must mean 4G).
  • a $9.95 smartphone app that checks the status of your websites every 5 minutes, and allows you to automatically delete the 160 comments of spam you get every day on your new WEB EMPIRE.

A Pretty Dismal Picture, Right?

So, get out your calculator, and as they do with the annual “Cost of the 12 Days of Christmas” bits aired by the news channels each year, add all this up over a two year period, and create a baseline against which you can compare your actual costs for DOING THIS RIGHT.

There are several constants here: you still need a domain name and web hosting solution. You need to establish a NICHE, and PRODUCTS within that niche you are going to promote. You must get a source of content that describes the products you are trying to sell, discussions about the products, articles about how to use the products, feedback on how you can improve the products, and a business infrastructure to support the products and customer service issues.

What About, “Web Administration as a Business”?

By putting a website online, whether you know it or not, you have become a BUSINESS. You are spending money as expenses to a BUSINESS. Your income is considered BUSINESS INCOME. You may wear many hats, and must make business decisions as a principal, or proprietor of your business. You must keep records. This is a little more than you had planned. Your vision of just being a Web Administrator, that your only job is to perform the daily care and feeding of the technical issues and content has been smashed by all this BUSINESS STUFF.

These are the things the GURUS don’t tell you. Whether you have a legitimate product, or establish a website simply to do affiliate marketing or blogging, you need to establish yourself as a business. Simply hanging out a shingle is not enough. You need to protect your business and protect your new income (or account for your losses).

  • Decide on a company structure: Sole Proprietorship, LLC, Corporation, Partnership
  • Get a zoning permit and business license in your locality – required for most home-based businesses but blatantly ignored until other issues come up that require that business license.
  • Get a FEIN – it is like a social security number for a business entity
  • Get a state tax license and reseller certificate. Yes, Virginia, you are responsible for collecting sales and use taxes for items sold in your state. Some states require sales and use tax no matter where the buyer is located.
  • If you don’t have an accountant, GET ONE. Discuss your business structure, account structure, tax implications, filing requirements, and ongoing business bookkeeping requirements with a professional. Do this now to avoid last minute fire drills, penalties, and interest for ignoring these requirements or DOING THIS WRONG.
  • Be sure you are meeting state and federal requirements if you have employees. Paying someone “under the table” can put you, your business, and the employees in jeopardy with state agencies, Federal labor laws, the IRS, and open yourself to liability in civil and/or criminal litigation.
  • If you do not have an attorney, you may need one for establishing your corporate structure, researching regulatory compliance requirements, drawing up partnership papers, researching patent and copyright issues, etc.
  • Talk with your insurance advisers on whether business insurance is necessary. Some of the biggest causes of business failure within the first five years of starting a business are legal or criminal action, liability issues, and lawsuits regarding “ERRORS AND OMISSIONS”.

Talk with a BUSINESS CONSULTANT for help in navigating through these issues, and also guidance in creating the necessary BUSINESS DOCUMENTS:

  • Business Plan
  • Policy and Procedures Handbook
  • Employee Handbook
  • Corporate Documents: Minutes, Resolutions
  • Environmental Impact Statements
  • Emergency Procedures
  • Business Contacts and Mailing Lists
  • Advertising and Marketing Plan
  • Training and Certification

Talk with an IT CONSULTANT to ensure that the IT infrastructure is established, whether simply a PC and a website, the creation of a “Cloud Computing” environment, or building a datacenter.

  • System Documentation and Runbook
  • Backup and Recovery Plans
  • Disaster Recovery infrastructure and plans
  • System Hardware and Software
  • Network infrastructure, firewalls, and security
  • Application Software, installation, configuration, and training
  • IT infrastructure monitoring and reporting
  • IT Infrastructure, PC, and Application training

Rich Moyer, Principal Consultant and Proprietor of Spaho Consulting, has been working as a Large Business, Small Business and IT Consultant with all types and sizes of businesses from large mega-corporations down to sole proprietors and small businesses for many years.

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