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Start Here: Outline of Steps to Starting a Business

Step 1:  Evaluate Your Idea

Evaluating your business idea through research is an important step that can save time and money before developing a business plan. Areas you may want to consider in your research efforts include:

  • Customer and marketing demographics                               
  • Product development
  • Product to sell
  • Who will I sell to
  • Cost analysis
  • Start-up cost
  • Industry competitors
  • Marketing strategy
  • Projected sales figures and revenues
  • A product produced at the right price for the right customer

The Business Development Program in Missouri offers a checklist that can be used to analyze your plan.

 

Step 2: Develop a Business Plan

After you have analyzed the feasibility of your business idea, develop an in-depth business plan that will provide direction for the first few years of your new business. A well-developed business plan serves as an invaluable reference guide that will assist you in making key decisions regarding the direction of your business as well as obtaining financing.

The Small Business Administration offers a free business plan tool that provides registrants a secure account complete with the tools necessary for outlining, editing, and monitoring your own unique business plan.

 

Step 3: Educate Yourself

Today’s entrepreneurs have access to a number of educational resources, both online and in-person, providing knowledge about every step of the entrepreneurial process.

Innovate ND provides resources through North Dakota’s network of certified entrepreneurial centers and leadership boot camps. Additional resources include the U.S. Small Business Administration Learning Center which provides online education, video tutorials and tools to help you analyze the success of your business idea.

 

Step 4: Secure a Business Location

If you plan to conduct your business from a traditional brick-and-mortar building, it is important to research how the location will affect your present and future growth. Questions to consider when choosing a location include:

  • Is the location in close proximity to my market and suppliers?
  • Does this location provide enough space for potential growth?
  • Does the surrounding area have the potential workforce necessary for the business’ success?
  • Where are my competitors located and how will this impact the business?
  • Does the business comply with the zoning ordinance?

 

Step 5: Finance Your Business

Before your business can start generating profits, you will need to have access to start-up funds. Outlining a thorough business plan will help you determine the amount you will need for your business to get underway and aid in securing additional funding.

Entrepreneurs can access funds through loans, grant programs or venture capitalists. For more information about North Dakota capital resources and how to get started financially, please visit our entrepreneur resources page. Other useful resources for individuals seeking funding in North Dakota:

The Bank of North Dakota Lending Services

U.S. Small Business Administration Resources by State

 

Step 6: Determine the Legal Structure of Your Business

Determining the structure of your business will affect its future tax, legal and liability implications. The most common business structures include:

  • Sole proprietorships
  • Partnership
  • Limited partnership
  • Limited liability company (LLC)
  • Corporations (for-profit)
  • Nonprofit corporation (not-for-profit)
  • Cooperative

Each business entity offers unique advantages for its owners and employees. Before settling on the structure of your business, all Innovate ND participants should consider seeking the expertise of business professionals to assess the potential risks, income taxes, and expenses associated with each business structure.

NOLO - Choosing the Best Ownership Structure for Your Business

Small Business Administration - Choose Your Business Structure

 

Step 7: Register Your Business

Choosing an appropriate business name is an important step in establishing your brand identity. Once formed, a business’ legal name defaults to the name of the person that owns the business. In order to establish a business name that reflects your unique product and service offerings, you must register the “Doing Business As” (DBA) name with the North Dakota Secretary of State.

For more information, please visit the Small Business Administration - Register Your Business Name.

 

Step 8: Get a Tax Identification Number

A federal tax identification number is used to recognize a business. Every company must apply for and obtain a tax ID number at the federal level and, in some circumstances, the state level. For more information about applying for a federal tax identification number, please visit the IRS - Apply for an Employer Identification Number (EIN) Online.  To find out more about the required tax documentation in the state of North Dakota, contact the North Dakota’s Tax Commissioner’s Office.

 

Step 9: Register for State and Local Taxes

Registration requirements for state and local taxes vary from state to state. An extensive overview of the required forms as well as a list of helpful resources can be found through the North Dakota Office of State Tax Commissioner. Additional resources can be found at the State of North Dakota New Business Registration.

Application for Income Tax Withholding and Sales & Use Tax Permit

 

Step 10: Obtain Required Licenses and Permits

Depending on the nature of your business, it may be necessary to register with the appropriate federal agency in charge of overseeing and monitoring specific business activities. For example, a business in the industry of radio or television broadcasting must obtain a license from the Federal Communications Commission (FCC) before conducting business. An extensive overview of the business types that may require additional registration can be found at the U.S. Small Business Administration.

In addition to federal regulations, many entrepreneurs must comply with the regulations unique to their state. An extensive overview of required State of North Dakota licenses and regulations can be found at Licensing - New Business Registration.

 

Step 11: Understand Employer Duties and Responsibilities

Business owners must help their employees understand their duties in order to ensure a fair, safe and secure working environment.  While owners may choose to provide certain benefits such as flexible work schedules to incentivize prospective employees, federal regulations require all business owners to do the following on behalf of workers:

  • Pay social security taxes at the same rate as employees
  • Carry workers compensation insurance
  • Provide leave benefits as required by the Family and Medical Leave Act (FMLA)

For more information about the relevant labor and employment topics that could affect your business, please visit the US Department of Labor.