By: Mari Boyle
The coronavirus pandemic has forced businesses across industries to quickly adapt and change the way they operate. For small businesses with limited resources, this transition can be increasingly challenging. As state governments begin to lift some control measures, experts advise preparing for a potential second wave of coronavirus. For small businesses especially, it is important to prepare for this possibility. One of the ways small businesses can prepare is by establishing an online presence. Irrespective of whether a subsequent second wave of coronavirus occurs, small businesses can grow their business by transitioning solely from a brick and mortar model to operating online as well. This blog post will help you begin that transition by discussing how you can move your business online and issues to be aware of while operating in cyberspace.
taking your business online
Create a Website
The first step, particularly for small businesses looking to sell goods online, is creating a website. Through a website, businesses can continue selling their products and communicate to customers information about their business and operation plans throughout the different transitional phases of COVID-19. There are several affordable website design tools available to small business owners. Among the most popular include WordPress. This guide provides a comprehensive, step-by-step tutorial for how to set up your first website. It covers the important topics of registering the name of your website (domain name), designing your website, and other resources for building a website.
eCommerce
If you are looking to sell goods online, you have several options. You can create your own eCommerce store on your website and sell products through that medium. This gives you complete control over the website, design, and functionality. You can also hire someone to make your website for you. It’s easy to find website developers on sites like fiverr.com, upwork.com and freelancer.com. While hiring a developer will cost you some money, it will save you time that you can use on running your business.
Another option is to use hosted eCommerce platforms, such as Shopify. An advantage to this option is that a majority of the work is done for you and you can customize your site through pre-made templates. A third option is selling through marketplace sites such as Amazon, eBay, or Etsy. While this option allows for the least personal customization, it reaches a greater audience.
Email Marketing
Staying connected with your customers is important and can be done by text or email. There are several platforms that allow you to communicate with customers effectively through emails, such as Constant Contact, Vertical Response, and Mail Chimp. However, it is important to be aware of, and abide by, laws regulating commercial emails in the process. This post covers such laws, such as the CAN-SPAM Act which regulates commercial communications, in a later section.
Social Media
Meet your customers where they are by establishing or increasing your social media presence. Social media provides an additional low-cost platform for businesses to communicate and interact with customers. Small businesses can use these platforms to notify customers about changes in operations and direct them to your website. Businesses can bolster their social media presence by posting often and announcing sales or discounts.
Issues to be aware of…
Taxes
When moving your business online, it is important to understand your tax liabilities.
In the past, online sellers only had to collect the applicable taxes in the state where the business maintained a physical presence. However, in 2018, the Supreme Court ruled that a business must also collect taxes in states where the business has a “nexus.”
“Nexus” is a term used to describe a particular connection between the online seller and the state. If you are selling online to someone in another state and a “nexus” is found, you have to comply with that state’s tax laws and collect the applicable taxes. How “nexus” is defined, and the amount of the tax differs across states. Several states have established specific criteria as to when a business has established a “nexus” with that state through online sales. It is important to know how much you are selling, where you are selling, and the applicable tax. Many states have a de minimis rule that holds that unless you sell a certain amount to their residents, you do not have to remit sales tax to the state. All of the different standards can be challenging, so consider consulting a tax professional or find software to help you navigate the different tax laws. If you use an e-commerce platform, the platform will likely do this for you.
Data Privacy
Another concern of customers and business owners alike is data privacy. In operating a business online, business owners should be aware of state and federal data privacy laws to ensure compliance. For example, the Children’s Online Privacy Protection Act (COPPA) has specific requirements if your website or online service collects personal information from those under the age of 13. For more information on COPPA, see our blog post here.
Many states require businesses to take certain measures to protect the personal information they collect. In California, the California Consumer Privacy Act (CCPA), which went into effect this year, made robust changes to the state’s privacy laws in an effort to better protect consumer privacy rights. If you gather data from anyone in Europe, you must learn about the EU’s General Data Protection Legislation (GDPR). See our post here.
Additionally, most states have breach notification laws that require businesses to notify certain individuals in the event of unauthorized access to personal information. Businesses establishing an online presence should ensure their privacy policies are updated to comply with applicable state laws and know what data is being collected by their business.
Cybersecurity
Along with data privacy, of equal importance in moving online is protecting your business against cyberattacks.
According to the U.S. Small Business Administration, small businesses are often targets of cyberattacks because “they have the information that cybercriminals want, and they typically lack the security infrastructure or larger businesses.”
The most common types of cyberattacks include (1) Malware, software designed to cause damage to a network, (2) Viruses, harmful programs that spread from computer to connected computer, and (3) Phishing, which uses emails or websites to infect a computer with malware or a virus. In moving your business online, being proactive in protecting your business against cyber attacks can reduce your risk of becoming a victim. Some places to start include:
· Training your employees to spot phishing emails, use good browsing practices, and create strong passwords.
· Use antivirus software and update it regularly.
· Secure your Wi-Fi network by making sure it is password-protected, encrypted, and hidden through a Service Set Identified (SSID) For more ways you can protect your business from cyberattacks, take a look at this checklist.
CAN-SPAM
Mass communications can be a great way to reach your customers. However, when your emails or texts contain commercial content they must comply with the CAN-SPAM act. Briefly, the CAN-SPAM act has certain rules for emails that advertise or promote a product or service. Some of the rules include:
· Don’t Be Deceptive. The header information (who the email is from) must accurately identify the person or business that sent the email. The subject line must also accurately reflect the content of the message
· Do Disclose. You must disclose clearly and conspicuously that the email is an advertisement. You must also notify the recipient that they can opt-out of receiving future emails and how to do so.
Of note: This is not a comprehensive list of everything the CAN-SPAM act requires. For more information on what is required or prohibited by the CAN-SPAM act, see this guide.
Moving your business online gives you a relatively cost-effect way to grow your business without purchasing another physical storefront. In the face of the coronavirus pandemic, establishing an online presence can minimize the negative impact the pandemic has on your business and prepare your business for a potential second wave of coronavirus or whatever else may come.
Mari Boyle, at the time of this post, is a rising third-year student at Penn State Dickinson Law. Mari is from Pittsburgh, Pennsylvania and is interested in corporate law and litigation. Mari currently serves as President for the Business Law Society and as a Senior Editor of the Dickinson Law Review.
Sources:
https://www.ftc.gov/system/files/attachments/cybersecurity-basics/cybersecurity_sb_cyber-basics.pdf
https://www.ftc.gov/tips-advice/business-center/guidance/can-spam-act-compliance-guide-business
https://www.sba.gov/blog/5-ways-start-selling-online
https://www.solanosbdc.org/sites/default/files/Moving%20Your%20Biz%20Online%20Rough.pdf
https://www.wpbeginner.com/beginners-guide/the-ultimate-coronavirus-small-business-guide-wordpress-tools-for-remote-work/
https://www.wpbeginner.com/guides/
https://www.sba.gov/business-guide/manage-your-business/stay-safe-cybersecurity-threats
https://www.fcc.gov/general/cybersecurity-small-business
https://sites.psu.edu/entrepreneurshiplaw/2020/06/08/a-beginners-guide to complying-with-coppa
https://oag.ca.gov/privacy/ccpa
https://www.forbes.com/sites/kellyphillipserb/2019/10/02/new-sales-tax-rules-take-effective-this-week-in-more-than-a-dozen-states/#4ac097075cfb
Image Sources:
https://www.makdigitaldesign.com/ecommerce/10-tips-too-increase-sales-and-efficiency-of-your-ecommerce-store
https://www.cpomagazine.com/data-protection/the-future-of-data-privacy-corporate-compliance-in-a-post-gdpr-global-market/