Why You Can Work From Anywhere But Your Business Can’t
As most of you know, I work from home, and tend to advocate that lifestyle quite a bit. In doing so, I’ve often used the phrase, “you can work from anywhere”, but an online acquaintence reminded me that I should make sure I add a few points to that. Let me tell you about a man who has some experience with these additional points.
I asked Robert to tell his story about how he set up his U.S. based online retail store, selling fitness equipment, while running it from his home in Melbourne, Australia. Here is his response.
“Like most people who are interested in earning a living online, I believed all those ‘gurus’ I found on the internet who all say the same thing, ‘anyone can run any business anywhere and from anywhere’. It’s a beguiling message to new online entrepreneurs but I soon found out that this wasn’t true.”
About eighteen-months ago, Robert wanted to quit his nine-to-five job and run his own online store. The only problem was he had no money. Therefore, he decided to operate his store using the drop ship model – this is where the retailer holds no stock but has signed an agreement with a supplier to retail its products. Then, when a customer places an order, the order is sent to the supplier and the goods are sent directly to the customer. Drop ship offers would-be retailers the opportunity to begin selling goods from their site without having any inventory and with very little start up costs.
However, it was when he got into the mechanics of setting up his business that it soon became apparent that the business needed to be grounded somewhere.
“In order to be accepted as a dealer for a supplier’s goods I needed to operate through a business. Without a business, real wholesalers simply won’t deal with you. Obviously, a company has to be registered under the auspices of a government agency. It was then that I had doubts on the story being peddled around the internet about how online business could be operated anywhere and from anywhere.
I wanted to retail exercise equipment and, for various reasons, I wanted to sell to the U.S. market. At first I thought I would just register a company in Australia, set up a website and approach suppliers in the States that would drop ship the goods to customers in the U.S.
But there was a big problem with this: U.S. suppliers are loath to deal with overseas retailers. U.S. suppliers want a retailer to have a U.S. EIN or reseller’s licence. Many also want to know your American business bank details. And, perhaps most crucially, suppliers in the States just feel more comfortable dealing with U.S. businesses.”
Many non-U.S. resident entrepreneurs dream of breaking into the American market but find that the technical challenges defeat them. But, not Robert.
His stubborn, Irish genes refused to give in. So, he decided to ‘locate’ his business in the U.S.
“It wasn’t easy. There are some major obstacles for a non-U.S. resident setting up a business in America – and, to set it up remotely, from the other side of the planet!
Forming a U.S. company and getting a tax ID (EIN) proved to be remarkably easy and cheap. But, the real challenge is in obtaining a business bank account and merchant account for your new business.
I spent hours phoning banks in the States and explaining that I was calling them from Australia but wanted a bank account for my American business. Many just didn’t understand and others refused on the grounds of the Patriot Act, whereby a bank has to know its customers and they would only open accounts for U.S. citizens.
Eventually I did find a bank that was willing to open an account and merchant account. Once these were in place, my business was ready to begin operation and the rest, as they say, is history.”
Today, Robert’s online store is thriving. He retails fitness gear to the U.S. market and he does this all from his home in Australia.
“But, what I’ve learned is this: modern technology has indeed made it possible to run virtually any online business from anywhere. Websites can be hosted anywhere, phones and faxes can now be run as virtual PBX’s which means my U.S. customers call my U.S. toll-free number and I can take their calls in Australia. Also, nearly all correspondence is done via email; orders are sent to my suppliers via email, I receive supplier invoices by email and I can access my U.S. bank account online.
However, the actual business entity can’t operate anywhere. It has to be formed and operated in the jurisdiction of the country it was incorporated, which means you will have to deal with that country’s tax and banking laws.
So, if you’re thinking of starting an online business don’t believe everything the ‘gurus’ tell you. A business is still rooted somewhere but, unlike before, you can now run it from anywhere.”
From now on, if I happen to mention “you can work from anywhere”, I’ll be sure to add Robert’s points for clarification. You can find out a lot more on how Robert set up and runs his U.S. business by visiting www.americanbusinesslaunch.com.
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| Why You Can Work From Anywhere But Your Business Can’t | |
 | As most of you know, I work from home, and tend to advocate that lifestyle quite a bit. In doing so, I’ve often used the phrase, “you can work from anywhere”, but an online acquaintence reminded me that I should make sure I add a few points to that. Let me tell you about a [...] |
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I also lived in Australia while selling products to people in the U.S. Also, the products were made in Indonesia. The logistics were very difficult to deal with and I remember almost having a nervous breakdown once when an entire $20,000 shipment was stuck in U.S. customs and they gave me 48 hours to pay the outrageous taxes (due to a valuation mistake made by the manufacturer – he put retail value instead of the price I paid for goods) before they were going to “destroy” the shipment. Ughhh… indeed, it was difficult, but certainly not impossible. I made it out with my sanity, after all. I think.;-0
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Good to know, Everett. Add “stay on top of manufacturer valuation of shipment” to the list.
Twitter: DonnaFontenot
now I know. I really thought it’s just easy to set up an online business selling just like your friend Robert has been doing.
It was my first time to know actually that you need a business first in a country where your target customer are living, including the supplier of the goods you are selling.
So, I guess Robert’s business is similar to the Amazon’s business.
Wouldn’t it all depend on what kind of online business you’re running? If it’s an online business that deals with stocked items and inventory, I would say it would be difficult to run from anywhere. But an affiliate site would be much easier to run anywhere.
I partly agree with your view. If its a business that deals with supplying products, it definitely may at some point require the business to have some physical identity. However, if its a service oriented business, it does not require any physical presence of the business…
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I agreed with you! it is like selling perfume and telling the buyers that it’s smells sexy but the product is not there… -great post!
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Yes Donna, we can manage a business almost anywhere, but a business must have a base and a permanent location. Especially when it comes to taxes and licenses, a business should see to it that it operates on the place where it is registered.
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You are on point about selling some goods online but having the business at a particular location where you get sales from.
However, this is only for physical goods or products. for people selling as affiliates, goods or products that are digital,i don’t want to agree that their business has to be where their customers are.
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Hi Donna,
It isn’t easy to do business anywhere especially when you are dealing with tangible products. You really have to be in your office or store in order to know if that product is still available. You cannot deal with it online.
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That’s not completely true. Sure, “someone” has to deal with product, but it doesn’t have to be you. You could be using a drop shipper for instance.
Twitter: DonnaFontenot
I am in similar situation but I am not Australia based but instead I am based in Eastern Europe and 100% of my income comes form US and my business is registered in Europe and I am in Europe.
Sometimes I have a bit strange feeling about ll this that if I lose internet I lose my business. It’s more like joke but still
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glad i stumbled upon this…my friend was made redundant just before christmas, i shall foreward this onto her. Robert`s story will help her. sounds like his on-line business is somewhat like Amazon and they`re huge.!!
totally agree with you! its a great life style huh! i feel more freer than being stuck in the office all day. one thought though,if it’s an online business that deals with stocked items and inventory,wouldnt it be a bit difficult to run from anywhere other than the office?
Great! I really thought it’s just easy to set up an online business selling.Anyway, thanks for sharing.
Hey Donna!!
Nice too see your post I am bit away from internet due too business you are right that working can be remotely done but for running the business in profit need your presence.Otherwise it’s difficult to generate profit from that business.
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Hi, Donna!
Robert’s story is a good reminder that it is not true we all can work from anywhere we want to. It is all not that simple, but the big picture has to be taken in consideration. However, I hope my online business engagement will do well for now.
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