Steps to Starting a New Business in Kentuckiana
Most Americans want to own a business. Surveys have consistently indicated that next to owning a home, small business ownership is at the top of the list of great American dreams. Entrepreneurship has been a part of the fabric of this country since colonial times. In fact, this aspiration must be universal, being that most immigrants coming to the United States today dream of starting and owning a small business, just as our ancestors did in the past, and just as many of us desire to do today.
The dream of starting a successful business does not always turn into reality. In my 25-year career of advising over 2,000 small business owners and aspiring entrepreneurs, I have found that there are 15 crucial steps that every entrepreneur should take before he or she opens a business. These steps can ensure that you get your small business set on a solid foundation.
1. Meet first with a small business consultant. The small business consultant can help you articulate why you want to get into business; what it will take to start and grow a successful business; how to assess the market opportunities; and how to fund the business start-up costs. Kentuckiana has great small business resources, and the following services are FREE: Small Business Development Center (SBDC) and SCORE, both of which are supported and partially funded by the U.S. Small Business Administration (SBA), area Chambers of Commerce, local universities, etc. These organizations can also help you develop a start-up business plan.
Louisville area SBDC 502.625.0123 Southeastern Indiana SBDC 812.265.3127
Louisville area SCORE 502.582.5976 South Central Indiana SCORE 812.944.9178
2. Consult with an attorney and/or CPA who is not only licensed to practice in Kentucky and/or Indiana but who is also experienced in small business operations. The attorney or CPA can offer you great advice and share knowledge about what to do and what not to do – it is most likely that most of his or her clients are small business owners as well. Ask small business owners whom you know and respect for names of attorneys and accountants with whom they have had good experiences, or you can contact the following associations.
Louisville Bar Association 502.583.1801 Indiana Bar Association www.inbar.org
Kentucky Society of CPAs 502.266.5272 Indiana Society of CPAs www.incpas.org
3. Select a business name and choose an operating legal entity (Sole Proprietor, Partnership, Corporation or S-Corporation, LLC, etc.). Your attorney and CPA can explain the pros and cons of the various legal entities in the areas of legal liabilities and tax ramifications.
Hint #1: Ask others whose opinions you respect what they think of the business name prior to selecting one.
Hint #2: Make certain that the name is available both on the internet and with the Secretary of State’s office otherwise your website name may be dramatically different than the business name.
4. Register your business name online with the Secretary of State. It is suggested to bookmark this site, as it contains a wealth of useful information.
KY Secretary of State www.sos.ky.gov IN Secretary of State www.state.in.us.sos
5. Obtain a federal employer identification number (EIN) from the IRS, form SS-4. To request an SS-4 or another type of IRS form, go to www.irs.gov. This is also a suggested site that you should bookmark.
6. Secure a zoning license/certificate of occupancy from the local zoning department. Make certain that contact is made with those who handle permits for any remodeling or new construction as well as those who deal with sign permits for any exterior signage. For many business owners, a landlord or developer can help you make those contacts. Be sure to contact the local fire marshal if you are moving from a home office to a new location.
7. Obtain city and county occupational/business licenses. Contact your local Revenue Commission, county clerk and/or city clerk. They can help with your local business name registration, answer questions about other licenses, fees, taxes, etc. Your business name should be registered in every county in which you conduct business.
In Kentucky access the following site: www.thinkkentucky.com/BIC/ebpermits.aspx
In Indiana access the following site: www.state.in.us/sos/business
8. Register with the State Department of Revenue if you are required to collect sales or use taxes; if you have a business with employees; or if you are a business entity, other than a sole proprietorship, that doesn’t collect sales or use tax or that doesn’t have employees.
Kentucky Revenue Cabinet www.revenue.ky.gov
Indiana Revenue Cabinet www.in.gov/dor
9. If you have employees, access the state workforce development site in order to find out about registering with the state unemployment insurance department and to purchase workers’ compensation insurance.
KY Office of Employment and Training www.oet.ky.gov
IN Department of Workforce Development www.in.gov/dwd
10. Check with your local city and county clerk’s office to determine if any special licenses are required for your business. A great resource is the “One Stop Business Licensing” program in each state.
Kentucky website: www.thinkkentucky.com
Indiana website: www.state.in.us/sos
11. Talk with your banker to establish a business checking account, savings account, credit/debit card merchant accounts and other services. Have a discussion about bank financing to start your business. Establish those bank relationships early so that the banker can get to know you and your business long before you ask for a business loan.
12. Secure liability insurance and other coverage appropriate for your business. Talk to an insurance professional about other types of insurance that you will need for your new business.
13. In addition to your attorney, accountant, insurance broker, banker, etc., speak with other business advisors such as marketing experts, IT professionals, HR consultants.
14. Spend time doing research before you start your business. Go first to the main branch of the public library and talk with a business research specialist. A business research specialist can show you databases, websites, information about business associations, ways to find out about your competitors, etc. Once you know where this type of information is located, you can access it over and over from your business or home computer.
15. Commit to continuous learning. Join a Chamber of Commerce. Go to networking events. Read the business sections of local newspapers. Talk to other entrepreneurs. Form your advisory board.
My next article will address the components that comprise a strong business plan.
(4.00 out of 5)