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. The 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 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
Demand
Market Size
Economic Factors
Location
Market Saturation
Pricing
Methods
Internet Research
Library Research
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
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
Lawyer
Banker
Accountant
Insurance Agent
HR Advisor
Other advisors to consider
Website developer
Branding expert
Marketing expert
Mentor in your industry
Other advisors to consider
Website developer
Branding expert
Marketing expert
Mentor in your industry
The type of business you set up has liability and tax implications. This is another great time to lean on your advisors. Your lawyer and your accountant should be able to go over the pros and cons of each set up.
Your options include
Sole proprietor
Partnership
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.
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
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!
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 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! For more details on pro forma financial statements, quickbooks has a pretty throughout article here.
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. Indiana Originals was launched with a $4,000 investment on a credit card, but I made sure that expense could be covered if the business didn’t work out. For every other expansion, we have used revenue or a loan of some sort—and again—ensuring the payment can be made. Financing is tricky and has a lot of fine print. Make sure to talk to your advisors before throwing money around!
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 your website address and social media handles that will be used. There is a reason the Indiana Gifts website and handles are “shopindianagifts” and not “indianagifts.”
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
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
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. Get an EIN here.
Indiana businesses have to pay taxes at the state and federal levels. Register for the Indiana Department of Revenue here.
If your business sells goods or tangible personal property, you’ll need to register to collect sales tax.
Additional tax registration may be necessary if your business:
Sells food and beverages
Rents rooms or accommodations for periods of less than 30 days
Rents motor vehicles that weigh less than 11,000 lbs
Sells gasoline
Sells tires
Sells fireworks
Sells prepaid wireless cards
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/.
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.
When recruiting, understand what questions are legal to ask throughout the process. Asking illegal questions can lead to discrimination claims. Harvard Business Review has a simple and easy to follow guide here.
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 out 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, and make sure to include the taxes you have to pay in your budget. I will never make that mistake again! I had to let go one of my best employees because I didn’t budget for taxes.
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 than me. 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 those dreams, 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.
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. Learn more about membership here.
I hope this guide and some tips from my experience helps you get started. No matter where you are in your business, we are here to help! Congratulations on starting your business!
All the best,
Mel
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/
