7.
Writing a business plan and creating a legal entity are key initial steps to establishing your dropshipping business for the long term.
The three common business structures for a dropshipping business are:
Autonomous
A freelancer is a single person and doesn’t require complex paperwork or additional tax filings. This makes it a popular business structure for dropshippers who want to keep things simple and affordable.
However, sole proprietorships do not offer personal asset protection if the business runs into legal trouble.
Limited company
Setting up a dropshipping business as a limited company keeps your personal finances separate from the business, which is not only safer but also makes accounting clearer.
Compared to an individual freelancer, LLCs offer flexible tax benefits,canada phone number which could help you save money. But you'll need to meet additional filing requirements and pay incorporation fees.
Public limited company
Many large companies are set up as corporations because of the extensive liability protection. Corporations are often expensive to set up and are subject to double taxation since income does not pass directly to shareholders.
Before choosing a business structure, it is advisable to consult with an attorney to understand which one is best suited to your situation.
Request a NIF
Most Spanish businesses need a Tax Identification Number (NIF), which serves as a social security number for your business. A NIF is required for filing taxes, applying for wholesale dropshipping accounts, opening a bank account, and other business activities.
Request a free NIF online through the Tax Agency.
8. Organize your finances
Separating your personal banking from your dropshipping business helps simplify accounting and keeps the financial health of your business visible.
Consider these basic financial tasks:
Open a business checking account
Open a business bank account to deposit earnings. A dedicated account for your dropshipping store makes it easier to track income and expenses and ensures financial transparency.
Apply for a business credit card
Consider getting a business credit card to pay for product orders, software subscriptions, advertising fees, and other expenses. This helps keep your personal and business expenses separate and can also earn you rewards if you choose a card with benefits.