Checklist for starting a business
Enter “how to start a business” in the search bar of your favorite internet browser, and you will be overwhelmed with results on what you need to do to get your business started. Indiana Originals (the parent company to Indiana Owned and Indiana Gifts) started as an idea in 2012, but officially launched in 2014. We continue to be strategic about our growth and want to share the knowledge we have gained along the way. If you are one of the thousands of optimistic people that want to start a business, look at the steps below to get started. This list is written the order of our experience, not necessarily what is recommended by the “experts.” If you include yourself in this category, make sure to take the right steps to increase your chances of success.
- Market research
- Market research will help you figure out if your idea can make money. It’s a way to gather information about potential customers, see what is already existing in the marketplace, and look at the competition. Indiana Owned started with a simple question: Is it local? When we started doing research to figure out if there was a way to identify local businesses faster and easier, we discovered that there wasn’t. You just had to ask. There wasn’t a sticker, there wasn’t an app, there wasn’t even a directory. Along the way, we found a lot of people like us that would support local businesses if they could identify them easier and we met a lot of business owners that were proud of what they built and willing to pay for the promotional help. After brainstorming the name with an eight-year-old and grabbing up all the internet addresses we needed, our business was born.
- Considerations for market research:
- Market Size
- Economic factors
- Market saturation
- Internet research
- Go to the library! Yes, libraries are amazing resources for business advice and market information!
- Post surveys on your social media pages to gather anonymous input
- Host a focus group
- Conduct informational interviews. You would be amazed how many business members in Indiana Owned are willing to share their story. You can hear a lot of them on our podcast Local Matters. https://indianaowned.com/podcasts/
- Data and trends are often published and available for small business owners.
- For access to federal statics, visit https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis.
- For local, Indiana-based demographic statistics, visit https://www.stats.indiana.edu/profiles/profiles.asp
- For small business facts for Indiana, visit https://www.sba.gov/sites/default/files/resource_files/Indiana_Small_Business_Profile_0.pdf
- Select your advisors: I can’t emphasize enough how important it is to have competent advisors BEFORE you start your business. You want to surround yourself with people that will listen to your ideas, support your efforts, and question your strategy.
- You must have a trusted
- Insurance Agent
- HR Advisor
- Other advisors to consider
- Website developer
- Branding expert
- Marketing expert
- Mentor in your industry
- You must have a trusted
- Create a written business plan: The process of going through the elements of a business plan will be as helpful as the finished product. Being able to articulate what you want to do and how you will make money doing it is imperative to your success. If you are applying for a loan, this is almost always a requirement.
- Elements of the business plan should include the following:
- Executive Summary—do this last!
- Company Description
- Services or Product Description
- Organizational structure
- Market Analysis
- Marketing Strategy
- How you will make money (financial plan)
- What you will need to make money (funding plan)
- Do the executive summary after you have determined the rest of the elements. I have never understood writing the summary before doing the work. It is so much easier the other way around!
- Elements of the business plan should include the following:
- Choose your business form: This is where your advisors come in. Your lawyer and your accountant should be able to go over the pros and cons of each set up.
- Your options include the following:
- Sole proprietor
- Regular corporation
- S corporation
- Limited Liability Company (LLC)
- Nonprofit Corporation
- Limited Partnership
- Limited Liability Partnership
- In Indiana, you will want to visit https://inbiz.in.gov/start-business to establish your business.
- Your options include the following:
- Understand your tax liabilities: Understanding your tax liabilities from the beginning is imperative to a successful business launch. Having a clear plan with your accountant on what taxes you will owe and when they need to be paid will help you avoid any issues down the road. Taxes could include:
- Payroll taxes for employees
- Worker’s compensation
- Unemployment insurance
- Sales tax
- Property taxes
- Excise taxes
- Business income tax
- Prepare projections: Prepare projected sales and expenses for the first year or two of your business. Plan your cash needs carefully and realistically and prepare to have a cushion for setbacks and unexpected expenses. I haven’t met a business owner yet that hasn’t been surprised by SOMETHING!
- Assess financing needs: Most new businesses need capital. Decide where that money will come from. Do you have savings on hand? Will you borrow money? Do you need to take out a loan? How will you pay that money back?
- This is where your trusted banker steps in. You are not going to buy a house on a credit card, right? It’s important to make sure you have the right financing before you are in a crisis situation. We were able to launch Indiana Originals with a $4,000 investment on a credit card, but we made sure we could cover that if the business didn’t work out. For every other expansion, we have used a loan of some sort—and again—that we know we can pay. Financing is tricky and has a lot of fine print. Make sure to talk to your advisors before throwing money around!
- Decide on a business name: You would think this would come at the beginning, but there is a lot of work to be down before a name actually needs to be decided on.
- Your name must be different from the name of any other business of the same kind.
- Search the Secretary of State’s website to see if a particular name is available. https://bsd.sos.in.gov/publicbusinesssearch
- Also consider if the following are available with the name you choose:
- Website domain
- Social media pages
- Determine a location and equipment needs: Where will you operate your business? Will you start at home or a co-working space? Do you need a brick and mortar location? Will you operate an online business? These answers will affect permits, licenses, insurance needs, marketing needs, and more. If you need equipment, will you buy it or lease it? Again, use your trusted advisors to determine the advantages and disadvantages of leasing or buying.
- Get your permits and licenses
- Your business may require permits or licenses
- Indiana does not have one single business license, but some businesses are subject to regulatory requirements that may involve state agencies
- All businesses except Sole Proprietors and General Partnerships must register with the Indiana Secretary of State. https://inbiz.in.gov/business-entity/
- Indiana has over 400 different licenses, permits, certifications, and other permissions which could be required to engage in certain activities
- Learn more about specific licensing and permitting issues at https://www.in.gov/core/business.html
- Consider your insurance needs
- Every business needs insurance.
- Talk to your trusted insurance agent about your company’s products and services to determine the type of insurance you need to protect yourself, your employees, and your customers
- Get your numbers: Apply for the necessary federal and state identification numbers
- An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number and is used to identify a business entity. Generally, businesses need an EIN. 2022 IRS Federal Tax ID Application https://irs-tax-id-ein-gov.com/irs-2021/?utm_medium=cpc&utm_campaign=15581835982&utm_term=ein%20number&gclid=CjwKCAjwiuuRBhBvEiwAFXKaNB4n1gbCt1lCd2Mfph4BIYeb3Um4IKKskuxQ1dh94r5Czz6zig4bjxoC9sUQAvD_BwE
- Indiana businesses have to pay taxes at the state and federal levels. Register for the Indiana Department of Revenue here: https://inbiz.in.gov/taxes-fees/tax-registration
- If your business sells goods or tangible personal property, you’ll need to register to collect a seven percent sales tax.
- Additional tax registration may be necessary if your business:
- Sells food and beverages https://www.in.gov/dor/business-tax/food-and-beverage-tax
- Rents rooms or accommodations for periods of less than 30 days https://www.in.gov/dor/business-tax/tax-rates-fees-and-penalties/county-innkeepers-tax
- Rents motor vehicles that weigh less than 11,000 lbs https://www.in.gov/dor/business-tax/tax-rates-fees-and-penalties/motor-vehicle-rental-tax
- Sells gasoline https://www.in.gov/dor/business-tax/fuel-tax/gasoline-use-tax
- Sells tires https://www.in.gov/dor/business-tax/tax-rates-fees-and-penalties/tire-fee
- Sells fireworks https://www.in.gov/dor/business-tax/tax-rates-fees-and-penalties/fireworks-public-safety-fee
- Sells prepaid wireless cards https://www.in.gov/dor/business-tax/new-and-small-business-education-center/prepaid-wireless-service-charge
- Facilitates sales of tangible personal property, accommodations for less than 30 days, or prepared food and beverages
- If you have questions about sales tax, call the sales tax information hotline at (317) 232-2240 or visit https://www.in.gov/dor/business-tax/business-tax-faqs/.
- Keep great records: Set up a good recordkeeping system from the beginning. Save everything until you learn you don’t need to save it anymore. Consult with your accountant and your attorney about the best way to store documents and what you need to be saving.
- What you need to know about hiring employees:
- When recruiting, understand what questions are legal to ask throughout the process. Asking illegal questions can lead to discrimination claims. Here is just one website with a simple guide. https://hr.fas.harvard.edu/files/fas-hr/files/appendix_e_guide_to_legally_permissible_interview_questions_and_discussions_03202015.pdf
- Understand the rules regarding the Department of Labor’s form I-9: new hires must verify their legal right to be employed in the United States within three days of their start date and forms should be saved separately from their employee files. Find our more here: https://www.dol.gov/general/topic/hiring/i9-central
- As mentioned above, also be prepared to understand payroll and payroll tax requirements and laws. Federal and state payroll taxes have very specific requirements.
- An employee manual is not always necessary with just a handful of employees but be prepared to establish policies and procedures. Talk to your attorney or a human resources consultant to establish one.
- Under the Affordable Care Act (ACA), applicable large employers (ALEs) with 50 or more full-time equivalent (FTEs) are required to offer affordable health benefits that meet minimum essential coverage (MEC) or be subject to a penalty. Smaller businesses are not under such obligations, but, as you grow, you might consider adding paid time off (vacation, holidays, bereavement, etc.) and voluntary benefits which can include vision, dental, disability, and/or pet insurance. It may be difficult to recruit or retail employees without adding at least some benefits. Read here for more information: https://www.irs.gov/affordable-care-act.
- Be particular about who you hire. This is soooo important! I have a lot of strengths, but when it comes to managing a business, there are a lot of things someone else is better at. Do not be afraid to ask for help and to hire early—even if it is just for a few hours a week. We start businesses with big dreams, but in order to achieve that dream, we need help. You cannot be good at EVERYTHING. We are human. Make sure you build a great team around you and be strategic with every hire. I never even interview anyone without asking them to complete the DISC assessment. It is a great tool to learn about someone’s behavior style and how to communicate with them. Learn more about it here: https://app.cloverleaf.me/take-disc
- Get “certified local” with Indiana Owned!
- As soon as you become a business, get certified local and become a part of a community with like-minded business owners.
- Use the logo as part of your brand kit to help tell your story
- Get access to promotional opportunities, events, like-minded business owners, and more.
I hope this guide and some tips from our experience helps you get started. No matter where you are in your business, we are here to help! To learn more about how Indiana Owned can help your business grow, schedule a meeting with Mel and learn more about membership at https://indianaowned.com/compare-plans/. Congratulations on starting your business!
All the best,
Indiana Small Business Development Center – https://isbdc.org/
SCORE – https://www.score.org/
Indiana Grown – https://www.indianagrown.org/
Indiana Artisans – https://indianaartisan.org/
Brewers Guild of Indiana – https://drinkin.beer/
Better Business Bureau (BBB) – https://www.bbb.org/
Business Owners Initiative (BOI) – https://indychamber.com/entrepreneurship/
National Federation of Independent Businesses (NFIB) – https://www.nfib.com/
Small Business Administration (SBA) – https://www.sba.gov/
Indiana Secretary of State (SOS) – https://www.in.gov/sos/
Indiana Cooperative Development Center Inc. (ICDC) – http://www.icdc.coop/