Disclaimer – always consult legal professionals prior to making such a big commitment. It may cost more up front but save you BIG in the end!
This post is long and may look boring but it’s a great read! If you’re serious about starting your own local business, you have to do the boring stuff first!
- Research and Planning
Identify your target market and assess the demand for your business idea in your area:
You may think your idea is a really good one, but you have to do your research! The US Census Data website is a good start (https://data.census.gov/). Enter your location and click on the “View Profile” to the right and it will give you a breakdown of statistics.
Check your state/county/township/city websites they may also offer additional information!
Only planning on selling online? You still need to identify your target market and demand even if your only platform is digital:
This post is more aimed for a local business. I’ll do another post for online businesses soon! But for some quick examples – Google Trends, Social Media, etc are a great start!
Research local competitors and analyze their pricing, services, and customer base:
Develop a business plan outlining your goals, target market, pricing strategy, marketing plan, and financial projections. Having a Business Plan is a smart idea even if you don’t need to raise any capitol or acquire a loan. It keeps you focused on your goals.
Researching local competitors is vital for your future business. If you don’t know your competitors you’ll be out before you even start! Google is your friend (sometimes), use it! Also check your local Chamber of Commerce sites there may be a list businesses there too. Facebook pages and groups is also a good reference.
When working on pricing, not only do you have to take into account your competitors, but you also want to be respectful as well. Don’t completely undercut your “neighbor” just to make a buck. Be supportive of your community and other local businesses. You would wish the same for yourself! - Legal Considerations and Business Name (I strongly advise you to consider a legal professional for this section)
Choose a suitable business structure (e.g., sole proprietorship, LLC) and register your business with your states’ Department of Financial Institutions (DFI).
Obtain a Federal Employer Identification Number (FEIN) from the IRS if necessary.
Check zoning regulations and local ordinances to ensure that operating a home-based business is permitted in your area and comply with any requirements. - Business Name Registration (Your legal professional can help you with this)
Choose a unique and memorable name for your business and ensure its availability. Check your states’ Department of Financial Institutions and do a search in the Corporate Records for this information.
*PRO TIP* if the status of the name is “Dissolved”, you still may not be able to use it. You also can’t use a variation of it. For instance, if you wanted “My Rentals Now” and it was Dissolved, you cannot change it to “My Rental Now LLC” because the original would still show up. Again, check with your legal advisor as this may vary by state.
*ANOTHER PRO TIP* Utilize AI! Chat GPT is a great tool when trying to figure out a name for your business. Just type in what your want your business to be and it will give you some name ideas. - Permits and Licenses (Your legal professional can help you with this)
Determine and/or obtain any permits or licenses to operate your business in the city/township you’re located in. This includes your states’ Sales Tax Permit. If you don’t have an accountant or financial advisor and you’re not comfortable with applying on your own, a legal professional may be help to assist. - Insurance
Consider obtaining liability insurance to protect your business from potential risks and liabilities. Your legal professional may be able to help you determine this.
Contact insurance providers to get quotes for general liability insurance and any other coverage you may need. If you have something that may be road-worthy (e.g., a vehicle or trailer), you may need separate coverage (Commercial Auto) on top of Business Personal Property insurance. Be prepared to have a list of your Assets, VIN numbers and costs related to your assets in order for them to give you the best possible quote. A lot of insurance companies offer blanket or itemized coverage for the Business Property insurance portion. One of the cons for itemized is that you need to contact them every time you make a change to your assets. A blanket coverage doesn’t require that unless your asset(s) went significantly up/down than what the original coverage was for. - Setting up your Home Office/Workspace/Storage/etc
Designate a suitable area in your home/property/building for storing and managing your inventory.
Organize your inventory in a way that is convenient for you and your customers and keep accurate records of your it.
*PRO TIP* if your business is on your property, your legal professional may advise you to do a Bill of Sale of your pre-owned inventory from personal to your business (even if it’s at $0 price). They also may suggest that you lease part of your property to the business. If you decide to lease your personal property to your business, it may be a good idea to put up a sign in the designated space that says “This space is leased by <insert business name here>” for liability reasons. You can never be too careful! - Marketing and Promotions
Create a website and/or social media presence to showcase your business to reach potential customers. We all know how powerful social media is – USE IT! Depending on what your business is, you may want to seriously consider investing in someone creating a website for you. Yes, it’s going to cost a lot of money. But if you have complex contracts, disclaimers, etc – save yourself the time and headache and have someone else do it for you. Get quotes, look at demos on their websites and YouTube…just do your research!
Don’t forget about other free services to get your business name out there. Not only are there tons of Facebook groups and pages to promote local businesses (and Pinterest/IG/TikTok/etc), you can also register (free) with Google, Angi (Angie’s List), Yelp and Yellow Pages.
Consider traditional advertising methods such as flyers, business cards, and local newspaper ads. Believe it or not, people still actually read paper newspapers! - Operations and Customer Service
Review programs that will best fit your business model for POS (point of sale), inventory management, orders and invoices, etc. If you’re an Excel wiz, there’s a lot free, pre-made sheets you can download and modify yourself.
Provide excellent customer service to build trust and loyalty with your clients. Keep in mind you’re a local business, word of mouth can make or break you! And with social media these days, things can spread pretty quickly… - Record Keeping and Accounting
Set up a system for tracking income, expenses, and other expenses. This may tie into your Operations and website so please keep this in mind. Depending on your business, you’ll want to make sure that all platforms can integrate with each other to ensure smooth business operations.
Keep detailed records of your financial activities for tax purposes and business management. I know numbers are boring for most people. But you’ve spent all this time and money on your dream, don’t glaze over on your numbers!
If you’re looking for investors, check out places like Kickstarter, Indieogogo and many others. Again – DO YOUR RESEARCH! Make sure you’re choosing the right avenues for your future.
Grants are another possible option as well as GoFundMe. Grants.gov may have something if you dig around enough. - Launch your Business
Once everything is in place, officially launch your business on all your platforms! Congratulations!
What other tips do you all have? Comment below to help out others!
