Want to sell without the hassle of a physical location? Starting an e-commerce business may be the best option for you!
✨Online Retail Business Checklist ✨
🛍️ Set up your business
Check out our Steps to Start Your Business article for more information on business operations set-up!
📝 Business plan
Your business plan communicates what your business does, your vision for the future, and the steps you will take to reach those objectives. Generally, the business plan should include:
- An executive summary
- A marketing plan
- An operations plan
- The proposed organizational structure
- Financial projections
🚧 Business structure
You have probably heard the terms sole proprietorship, general partnership, limited partnership, and type C or S corporation. The determination to form a company under a particular structure has much to do with the business activity, location, and organization.
The legal structure of the business will dictate many of the entity's operational functions and tax liability, entrepreneurs are encouraged to seek legal advice when considering these choices.
For more information, see our page on Business Structure.
✍️ Register your business
Register your business correctly with the California Secretary of State (SOS). This should be done after you determine the most appropriate operating structure for your business and have determined its name. Sole proprietors do not need to register, but corporations, limited liability company, and partnerships must file with the SOS.
You may also need to register with the California Employment Development Department (EDD). An employer is required to file a Registration Form within 15 days after paying more than $100 wages to one or more employees
💸 Income taxes
As a business owner, you are required to pay state and federal taxes on your business every year.
For federal taxes, you will need to apply for an Employer Identification Number (EIN).
For state taxes, you will need file with the California State Tax Franchise Board.
✅ State Requirements
💸 Seller's permit
California requires that you obtain a seller's permit if you are selling tangible, taxable goods (like food and clothing). You can apply for a Seller's permit through the California Department of Tax and Fee Administration (CDTFA).
🍽️ Resale certificate
You may also be interested in getting a Resale certificate through the CDTFA. A California resale certificate lets you buy goods tax-free if you’re planning to resell them, rather than use them personally—just show it to your supplier at the time of purchase! This is limited to items you will not collect sales tax on, such as napkins or to-go boxes.
💬 Fictitious business name
If your new entity will conduct business under a name that does not contain the surname of any and all owners, or is a corporation that will do business under a different name than is registered with the State, you will need to file a Fictitious Business Name Statement with the County of Sonoma Clerk-Recorder-Assessor’s Office. This application must be filed within 40 days of the business start date.
🤕 Workers' compensation insurance
Every employer in California is required to have workers' compensation insurance, even if you only have one employee. Workers' comp insurance provides medical care, disability benefits, supplemental job displacement benefits, and death benefits. Don't be afraid to shop around for an insurance carrier that best meets your needs.
☑️ Local Requirements
👷 Home Operation permit
If you e-commerce business is based out of your home, you may need a Home Occupation permit to operate. Online retail stores based out of unincorporated Sonoma County do not need to apply for a permit, but business operations need to follow the County Code for Home Occupation. If you live in an incorporated city, check with your local business development agency to see if you are required to apply for a permit!