Below are the nine things that you need to focus on when doing business on eBay. These items are what the IRS looks for to verify that you have an actual business (reference Skip McGrath's The Complete eBay Marketing System).
1. You must run your operation in a business-like manner.
· Keep good records of all transactions
· Create a separate bank account for your business
· Get an entity for your business eventually.
o Get a business license.
· Charge sales tax when applicable
o Get a Sales Tax License or Number
· Get an EIN number from the IRS
· Hire an accountant
2. Track the time you spend on your business.
3. Write out a business plan to show how to plan to quit your job and make your business you main source of income at some point.
4. If you have losses you must be doing something reasonable to change that.
5. You must make a concerted effort to generate a profit.
· Go to seminars
· Study your marketplace
· Try different strategies
6. Hire and meet with professional advisors who can aid your business.
7. You must be striving to become an expert in your field of business.
· Learn more about your field
· Buy books
· Work with advisors
8. You business needs to become profitable at some point.
9. Your business must be an asset that is appreciating.
