5 Things You Need to Know Before Starting a Business
Feb. 2, 2021
Starting a business doesn't happen overnight. It’s a process that takes time, money and hard work. If you’re thinking about starting a business, or have recently started a business, my hope is that this article serves as a resource to you.
The Importance of a Business Plan
A business plan is a blueprint for your business and will ultimately help you determine the feasibility of your idea. Writing a business plan requires in-depth research to understand who and where your customers are, the financials and how to market and sell your product or service.
One of the most important parts of the plan is identifying your competition, weaknesses and potential problems. These are things that every business has, and the purpose of a business plan is not to discourage you, but rather to help problem-solve and anticipate issues.
A complete business plan will be able to answer the question: “Will my business be successful?” Additionally, if you are looking for funding, most banks and investors will require a business plan.
The Legal Forms of Business in Tennessee
There are four basic types: Sole Proprietorship, Partnership, LLC and Corporation. The TSBDC recommends consulting with a lawyer or CPA on the legal and tax implications of each. A counselor at our Center can also help with this process by providing more information about each entity type, but ultimately the decision is yours. Do your due diligence and research every option. As your business evolves and grows, it’s not uncommon to change to another formation, although the process can sometimes be lengthy or costly.
You Will Have Business Taxes
Taxes are one of the topics we are most frequently asked about, and for good reason. It’s easy to get confused when trying to figure out which taxes you must pay, the deadlines, and to whom they are paid. There are several types of federal, state, and local taxes, and some are due annually, quarterly, and even monthly. It’s too much information for this article, so generally speaking, we recommend budgeting 30% of your net profit for taxes. We can provide a list of taxes you can expect, but we highly recommend seeking advice from a CPA too.
Choose the Right Business Name
When choosing a business name, you will first want to consider brand image. Ask yourself: What do you want people to think of when they hear your business’s name? How should it make them feel? You’ll want your name to be unique, but still relevant to what you are selling.
Once you have a name (or a few) picked out, start a google search. What pops up? Be on the lookout for anything that could confuse potential customers, such as a competitor with a similar name. In addition to a google search, you’ll also want to check that your preferred domain name is available.
Lastly, search the State Business Registry to make sure no one else is operating a business under that name, as well as the US Patent and Trademark Office. Keep in mind, though, sole proprietors will not be listed on the State Business Registry, and that’s why it’s important to be thorough in your other research too.
Resources Available to You
Locally, there are a handful of organizations that are available to assist small businesses and startups. For more information, please reach out to each organization directly.
The Tennessee Small Business Development Center (TSBDC) offers assistance to for-profit businesses by providing no-cost counseling and classes on a variety of business topics. Businesses can receive assistance at any point (startup or mature).
SCORE assists for-profit small businesses as well as nonprofits by providing access to mentors and training seminars. They assist startups and mature businesses.
The INCubator at the Hamilton County Business Development Center helps entrepreneurs achieve success through a three-year, progressive development program by providing clients with manufacturing and office space, training workshops, and more.
LAUNCH Chattanooga offers a Business Entrepreneurship Academy, a 10-week course focused on business planning, market research, customer development, and more. LAUNCH offers business training, support (counseling) and affordable resources to underserved entrepreneurs.
The Company Lab (CO.LAB) offers wayfinding meetings, Co.Starters programs, pitch competitions and accelerators for a variety of industries (health tech, consumer goods, food and beverage, veterans and more). They also offer office hours where you can meet with lawyers, accountants, designers and more.
This article was written by Madison McCann, an employee of the Tennessee Small Business Development Center. For questions regarding topics covered in this article, or other business-related topics, please contact Madison at firstname.lastname@example.org or 423.756.8668.