Some good questions from a person seriously thinking about starting a Web-based business.

A SCORE client sent me the following 10 questions in an email. See my responses in red capital letters.

1. I am wondering what the best way is for me to set up my business to protect myself should there ever be a lawsuit. CREATE AN LLC OR A C-CORPORATION. BUT CALIFORNIA KILLS YOU ON ANNUAL FEES. IT'S SOMETHING LIKE $850.

2. Can someone pay for my online information and then sue me if something goes wrong? YES

2A. Could you help me with this or point me in the direction to gain this information? ie: insurance needs and costs? NO. YOU NEED TO DO YOUR OWN RESEARCH ON THIS. FOR THE MOST PART YOU ONLY CARRY ENOUGH INSURANCE TO COVER WHAT YOU HAVE AT RISK. IF YOUR LLC IS MERELY A SHELL, THEN NO INSURANCE IS NECESSARY. IF YOU GET SUED AND LOSE THE SUIT, THEN YOU JUST FOLD THE LLC AND START A NEW ONE. I CAN'T IMAGINE YOU GETTING SUED REGARDING THE SERVICE YOU ARE GOING TO PROVIDE. BUT YOU NEVER KNOW.

3. Can I protect myself legally without insurance? YES. SEE ANSWER TO #1 ABOVE.

4. And where can I get the wording for a good disclaimer to use on my website? SURF THE NET AND FIND A GOOD ONE. THAT'S THE WAY YOU SHOULD GET MOST OF THE MATERIAL FOR YOUR WEB SITE.

5. Also, I will be running this business by myself without employees. What is the best set up: soul proprietary or limited liability company? IT'S SOLE PROPRIETOR. BUT I SUGGEST YOU FORM A SIMPLE LLC UNLESS IT IS CHEAPER TO FORM A C-CORP IN CALIFORNIA. WHEN I SAY CHEAPER, I MEAN IN THE LONG RUN. NOT SIMPLY THE COST OF FILING THE PAPERS IN THE FIRST PLACE.

6. If it is an online business I do from my home computer with the assistance of a web designer is it considered a home based business in terms of the licensing and permits based in my home town even if someone from another country pays the fee to receive my information? I have found a lot of information on home based businesses but haven't found enough on website only businesses. YES. YOU WILL BE A HOME-BASED BUSINESS. TECHNICALLY YOU PROBABLY SHOULD REGISTER YOUR BUSINESS WITH THE LOCAL MUNICIPALITY. BUT SINCE YOU WILL NOT BE SEEING ANY CUSTOMERS AT YOUR HOME NOBODY IS GOING TO QUESTION YOU. AT LEAST THAT IS MY TAKE ON THE TOPIC. MOST PERMITS ARE REQUIRED SO TRAFFIC AND PARKING PROBLEMS WILL NOT ARISE.

7. So do most people use their online domain name as their registered business name? YES. IT WILL SAVE IN MARKETING COSTS IN THE LONG RUN. BUT SOMETIMES THE REAL NAME IS LONGER THAN THE URL FOR THE WEB SITE. THE URL CAN BE AN ABBREVIATION FOR THE COMPANY'S REAL NAME.

8. And when researching if the “fictitious” name is available am I researching for my county or since it is a website having customers worldwide would I be looking globally? I'M RECOMMENDING THAT YOU DO NOT FILE A FICTITIOUS NAME. YOU WILL FORM EITHER AN LLC OR A C-CORPORATION. YOU WILL HAVE TO DO A SEARCH BEFORE YOU FILE TO SEE IF YOUR BUSINESS' DESIRED NAME IS AVAILABLE.

9. Do I develop my website first or do I receive all these permits/licensing first? WHAT YOU DO FIRST IS WRITE A SOUND 25-35 PAGE BUSINESS PLAN. GET SOME OF THE BOOKS I TOLD YOU ABOUT IN MY FIRST EMAIL. DO SOME READING AND STUDYING! VISIT YOUR LOCAL SCORE CHAPTER. ONLY AFTER YOU HAVE A BUSINESS PLAN AND MARKETING PLAN WILL YOU BE READY TO PUT YOUR WEB SITE TOGETHER. MUCH OF WHAT IS IN THOSE PLANS WILL BE LIFTED AND DROPPED INTO YOUR WEB SITE'S WEB PAGES.

10. I am not clear if my home town requires Zoning. Who do I ask about that? ALL TOWNS HAVE ZONING ORDINANCES. BUT SINCE YOU ARE A HOME BASED BUSINESS AND YOU AREN'T GOING TO BOTHER WITH GETTING A PERMIT, YOU DON'T HAVE TO WORRY ABOUT THAT. NOW, IF YOU EVER PLAN TO SEE CLIENTS AT YOUR HOME, THEN YOU NEED TO GET THE PERMIT.