I was recently made aware, by a friend looking to start a local business, that my blog has failed to discuss one very important topic. I have given advise on bookkeeping, marketing, organization, and many other topics to assist small businesses, but I have not addressed how to actually START a small business. So, here we go!
My focus in this discussion is the basic nuts-and-bolts of what you need to do to start a small entrepreneurial business in Idaho. For those wishing to start a corporation, there are a number of founding documents that must be created first, which is outside of the realm of this post. Also, each state has its own rules and regulations, and as my clients are primarily in North Central Idaho, I will be focusing solely on my state. However, each state’s Department of Commerce should have similar websites to assist.
For proper planning, I strongly encourage researching your desired field and developing a basic business plan. I have written a post on Why Bother With Writing a Business Plan? Furthermore, as mentioned in my other posts, SCORE and the SBA are also excellent resources. However, in rural areas I have found that businesses tend to develop more organically. A person has a certain skill, for which others have a need, so like myself, what started as a hobby, eventually turns into an official business. At this point, the concern is how to properly operate a business, as well as establishing your business’ identity.
Business Name:
So, first things first. Your business needs a name. As an sole proprietor, this can certainly be your own name. In addition, I know it is tempting to brainstorm a unique and clever business name. However, I encourage you to proceed with caution. With the Internet being the number one source to find a business, it is strongly recommended that your business name include your product and/or service. This is the best way to help your rankings among the search engines, as your business name will clearly state what it is that you do.
If you are not using your own name for your business, you should register your business name, or Assumed Business Name, with Idaho’s Secretary of State (SOS). This is a one-time task, currently with a one-time $25 registration fee. Prior to completing the registration form, it is recommended that you search the state’s business name registry, to avoid any confusion or infringement if the business name is already registered. You may do that via the SOS’s Business Search.
Tax Identification Number:
Many sole proprietors use their social security number (SSN) for their business’ tax identification number. This is certainly the easiest option. However, if you will be having employees or wish to not have to use your SSN on your business registrations, you will need to apply for an Employer Identification Number (EIN) number for your business. You can do this online on the IRS website.
Thanks to the helpful Idaho Department of Commerce Business Registration Wizard, once you have your business name and tax identification number established, most of the ensuing Idaho business registration tasks can be automated. By answering questions about your locale, business type, use of employees, and products and/or services offered, the wizard will take you through the required registrations with various state agencies. These registrations may include:
- Sales Tax
- Withholding Tax
- Licenses
- Workman Compensation Insurance
Other helpful Idaho Department of Commerce resources:
Sales Tax:
If you will be selling any products to end consumers in Idaho, you will need to register with the State Tax Commission to obtain a reseller license. In addition, you will need to collect sales tax and submit those taxes to Idaho, in the time-frame determined by your estimated sales volume. This task is completed via the Business Registration Wizard mentioned above.
Though most small e-commerce business start-ups will not immediately meet the sales thresholds to trigger collection of other states’ sales tax, you should be aware of recent rulings: U.S. Supreme Court Decision on Sales Tax Could Be Costly for Emerging Online Businesses
Other Required Tasks:
- Get your business recognized! This is called “marketing your business,” and first steps include developing a logo, registering an effective website domain address and creating a website, printing forms and business cards, as well as other means to establish your business’ identity. Recommended reading includes Make a Great First Impression.
- If selling arts and crafts, register an Etsy store.
- Acquire liability insurance.
- City & County registration, may be applicable, depending on where your business is located.
- A separate business bank account is strongly recommended to help with ease of bookkeeping, and perhaps establish a relationship for future funding needs. CapitalOne360 is a great online banking solution.
- As cash is a rarity today, you will need a solution for accepting debit and credit card payments.
- Bookkeeping software, such QuickBooks will help you be prepared for year-end income tax preparation.
This article is meant to simply provide the basic needs to start an Idaho small business, and as the business grows, the needs may change. For further reading, we have a variety of small business advice in the Tips & Tricks section of our website, as well as a Resource Toolbox full of helpful tools. If at any time, you need additional help to get your Idaho small business started or marketed, we welcome you to Contact Us.
Until next issue…Best wishes in your endeavors!