The 4 things you need to know to start selling information products

Jul 4, 2024

There's a lot more to the beginning of an info product business than releasing a great product. Learn what you need to learn and some strategies for the best results.

You're thrilled to begin selling information-related products.

However, you're aware that there's more to starting your own enterprise than just releasing a product into the world.

Taxes? What are they?

Legalities, hiring employees and other legal matters?

Don't worry, we've got you.

To help you launch your online business the right approach, we've listed the four essential categories to be aware of when beginning selling info-related products.

First on the docket Let's take a look at the time and why you should incorporate your side-business.

#1. When and why to make your side hustle a business

If you're contemplating making your hobby into an official business, there are several benefits to having your company.

(In case you're unfamiliar, incorporation of your company involves formally forming the legal entity that is distinct from your personal.)

Just to mention a few of the advantages of incorporation into the business you run:

You're seen as more legitimate, professional and reliable.

It is possible to lower taxes

You can reduce your legal liability

Let's quickly dive into these benefits of incorporating your business First, it will appear more professional.

If you're not convinced that looking more legit can make a difference, take a look at successful entrepreneur, Stephanie Krikorian  who has turned her freelance writing to an LLC. Stephanie found that presenting her business as a company helped get more clients.

What's more, when you're an official business, not only do clients are more attentive and take you more seriously, banks do too.

Which is especially important if you're looking to get a loan. In fact, 70 percent of business owners with no authentic bank account have been denied any business loans in the past two years.

One benefit for incorporating your company is the potential tax breaks.

As an example, 15 million taxpayers claimed the QBI deduction. (QBI) deductibility (which allows you to claim up to 20% of the business's income during the year the year 2018.

It all depends on your tax situation, but the gist is if you incorporate your business and you are a taxpayer, you could enjoy tax advantages.

The third benefit in incorporating your company, which is limiting your legal liability is crucial in legally protecting your personal assets.

In the event of a mishap, you may run the risk of losing a lawsuit or, even more surprisingly all your possessions -- if anything goes awry. According to lawyer Gahram Kang, Esq. explains, when you're a sole proprietor, your personal assets could be put on the line if your business is ever sued.

For when you should incorporate your company there are four possible scenarios to consider. perfect situations for taking the plunge include:

#1. From the start when you start your business -- that way, you won't need to worry with switching up your organization later.

#2. Before signing any legally binding agreements -- this will alleviate some of your personal liability

#3. Once your earnings exceed an important (to you) value that's worthy of protection

#4. Before you hire your first employee, in case there are any legal problems with the team members

In the context of taxation and legalities we'll move to the topic we'll be discussing next.

For entrepreneurs from America, U.S., five main businesses to choose from are:

Sole proprietorships



S corporations

Limited company with a limited liability

(For the business structure in Europe, check out this resource for setting up a business in Europe. E.U.)

After having your structure set up It's time to know, and fulfilling, your region's specific laws and requirements.

If you're located in the U.S., for example it is necessary to apply for with a fake business name and most likely, to pay for the do-business-as (DBA) company name. You may also be required to get an Employer Identification Number (EIN) and sales tax identification number .

The requirements vary not just in different countries, but state to state, too.

In light of all these legal issues that vary between different countries, what's your best bet?

Consult with an accountant and lawyer to cover your bases.

It's likely that there's additional information under the hood is important to know in order to make the right choices for your business.

Like familiarizing yourself with employment laws, such as the difference between employee and contractor designations , so you don't infringe on any laws pertaining to labor.

Not to mention the onslaught of tax details that must be heeded and that makes the advice of a professional even more helpful when tax time comes around.

Let's look at some tax requirements to see what I'm talking about.

The U.S., self-employed entrepreneurs have to pay federal taxes as per a certain range of tax brackets .

Thereafter, based on the place you reside, there are local, state, or taxes that are additional.

Entrepreneurs residing in Europe, there are both E.U. taxes and VAT tax to pay.

Additionally, all self-employment income in the U.S. is subject to taxation. The U.S. has a taxes on self-employment of 15.3 percentage comprising 12.4 percentage for social security as well as 2.9% for Medicare.

Because you'll be responsible for paying the federal, state as well as local taxes on your own so it's best to set the proceeds from every sales to pay for taxes on the annual tax day .

As for how much to set aside, you can refer to this table of state and local taxes to get an idea of the amount you could be liable for.

Although it's an excellent guideline to follow, your cities and state's websites be more up-to-date and precise rates. Additionally, your accountant must know all of these rates.

However, it's okay. It's income tax time. But there are to be use and sales taxes that must be paid.

The majority of states charge sales tax in most states , which means, when you're located in one of those states, you must pay sales tax on your customers and send it to the government on your behalf.

In other cases, the government collects the use tax  as a tax imposed when consumers do not pay sales tax at the moment of purchasing.

Hee Did you get enough of the legalities as well as tax discussion? Us, too.

The main takeaway is when it comes to legalities and taxation you'll have plenty to think about. Additionally, the laws are different across countries, so consult your accountant or lawyer for extra security.

When you're not talking with professional advisors take a look at financial tools for business to keep you well-organized.

#3. The most effective tools to manage the business's finances

As with everything in your business It's crucial to pick the best tool that is right for you as well as your company.

If you're a creative seeking a single account system, you should check out FreshBooks , one of the most popular accounting software for small businesses.

FreshBooks offers features such as expense and time tracking payments processing, as well as making invoices and proposals to your specifications.

QuickBooks QuickBooks HTML0 is yet another good option to consider if you are looking for an accounting software which makes it simple to monitor and pay taxes and maximize your tax deductions.

For features, QuickBooks lets you track the income and expenditure, control sales tax and sales tax as well as import costs, and arrange your expenses in categories to allow you to maximize deductions.

For an accounting tool that offers a generous free plan, look to Wave .

Wave is an accounting and invoicing program which lets you manage your expenses, income, invoices, and payments and manage double-entry accounting. It is possible to manage several businesses from one account, too.

Whatever accounting software you go with the use of software to keep track of your finances for business can be a boon.

If you're on the fence about investing in an accounting tool, think about the security and benefits it can bring to you.

A shocking 69 percent of owners of small-scale businesses have to stay awake at night worrying about cash flow in addition, 38% of business owners work for more than 100 hours juggling federal taxes on their own.

And if you're among the 40 percent of entrepreneurs that believe tax and bookkeeping are the most difficult part of being a small business owner, an accounting program simplifies and helps you manage your money, too.

In essence, accounting software helps to manage cash flow, budget, and expenses as cleanly as you can, which can greatly assist you during tax time and while operating a growing company overall.

With a clear grasp of your financials will be aware of what your budget can afford to hire help. This is our last topic of the day.

#4. How to find, hire, and manage freelancers in your company

The first step is figuring out what you need help to solve.

With the average business owner being responsible of an average of 4.2 roles  It's not a surprise that 37% of small businesses outsourcing a business function.

When hiring freelancers to help you, it's vital to clearly define which parts of your company processes you'd like delegated.

If you're unsure how to begin, you might want to consider assigning freelancers work that includes:

beyond your knowledge, or

Do not consume too much of your time

Once you have the tasks of a freelancer outlined then you can decide on your budget, which varies widely depending on the skill set and niche you're hiring to fill.

A budget for SEO, as an example, averages $497.16 per month  and a freelance writer might be less than $20 an hour .

In general, if you are hiring for the first time and you want to start by working with a lower budget, set aside $100 to $200 per month, and then work to increase it from there.

Next, you must look for talent and freelancers that you could find using marketplaces like Upwork as well as PeoplePerHour .

You can also hire freelancers directly from their sites for example, Lianna Patch from Punchline for copywriting, or Peter Brady , who is a Drupal developer.

Once you've found a handful of freelancers that you're interested in contact them, and make sure to include:

A brief overview of you and your company

The scope of your project and the tasks you would like your freelancer to do

The timeline for everything or if you want help on a recurring basis

When do you plan to be connected with progress reports

If you are contacting freelancer candidates Ask them regarding their availability, and whether they have any concerns about your tasks. Anywhere you can clarify the scope of your work will allow you to avoid miscommunication down the road.

That includes discussing specifics, such as task and project execution and the payment.

In the case of paying freelancers, not just will you be able to fulfill your obligation by paying them fair and on time, but you should also be able to pay the freelancers on time.

It's a shame that 54% of freelancers claim they don't get paid in a timely manner, so being on top of the bills you pay will improve your relationship with your clients.

It's also about clearly communicating your expectations and extent of your work. It's also about building a healthy work rapport with freelancers frequently checking in with them and talking about their goals and achievements.

In a nutshell:

It's important to first define what you'd like the freelancer to do and then determine your budget. Once you're ready for talent, look through for freelancer and marketplace sites in person. Contact candidates and agree on the work scope, expectations, timeframe, and payment.

It's all about keeping regular contact and maintaining your relationships with freelancers.

It's time to launch your information products to the world.

Starting an info product business isn't difficult but it's going to require a bit of research, planning, and elbow grease.

Let's recap:

#1. Benefits from turning your side hustle into a formal business includes looking more professional, cutting down your tax burden while reducing your tax obligation.

#2. Be aware of the rules of business and taxation specifically for your nation as well as your state or city. Hire a professional accountant and lawyer for extra security.

#3. Utilize an accounting program for help in organising and streamlining the financials of your business.

#4. Hire freelancers to help you expand your business with information products.

If you have the proper instructions in your toolbox you're ready to take on the world of selling info products.