Starting a Business

Starting a Small Business                                                                                                                     Copyright © 2019

Dr. Neal W. Vickers, PCED
Director of Economic Development – City of Trumann, AR

  1. Determine the business
    1. What type of business will you start?
    2. What need does it satisfy?
    3. What problem does it solve?
    4. What will the goods and/or services be it provides?
    5. Who will be your target market? See section 6.
    6. Who will be your competitors?
    7. What trends/issues are facing the industry?
    8. What opportunities exist in the industry?
    9. What will be your typical products, goods, or services?
      1. How much will they cost?
      2. How much will your markup be to your customers?
    10. Will it require a brick & mortar location? Where?
    11. How many staff will it require?
    12. How much power and utilities will it require?
    13. Will it require warehousing?
    14. Will it require a shipping/receiving dock?
    15. Will it be retail or wholesale?
    16. AR DFA Starting a New Business guide
    17. Frequently Asked Questions – with answers
    18. Arkansas Secretary of State Business Startup Wizard 

 

  1. What will the NAISC Code be for the business?
    1. This code will determine your business operating and taxable category

 

  1. What is your business plan?
    1. Sample Plan

 

  1. How will you secure funding for the start-up costs?
    1. Conventional loan
    2. SBA Loan
    3. Private investor(s)
    4. Corporate financing
    5. Collateral – what are you willing to pledge to get a loan?

 

  1. What is your budget projection?
    1. How much money are you willing to contribute to starting costs?
    2. How do you plan to cover shortfalls?
    3. Do you have 3 months to 12 months funding to operate on until the business becomes profitable (working capital)?
    4. How much will be your rent or building payment?
    5. How much will inventory, supplies, furniture/fixtures cost?
    6. What do you expect to be your monthly sales?
    7. What do you expect to be your monthly expenditures?

 

  1. Who will be your customers?
    1. How do you plan to sell to your customers?
    2. How do you plan to market to your customers and what will be your advertising budget?

 

  1. What is your plan to protect the business (insurance)?
    1. How will you insure the business?
    2. How will you insure yourself?
    3. How will you insure for loss of income in the event you are disabled or unable to work for an extended period (worker’s compensation – http://www.awcc.state.ar.us/employerbasicfacts.html; or Social Security Disability)?

 

  1. Will your business be a sole proprietorship, corporation, partnership, or limited liability company (legal classification)?
    1. Requirements to be an S (Simple) Corporation, Limited Liability Company (LLC), or Partnership:
      1. Franchise Tax (Provides Certificate of Good Standing – VERY IMPORTANT for getting lines of credit with vendors)
      2. Articles of Incorporation or Organization with the state of Arkansas (AR Secretary of State’s Office)
      3. Bylaws
      4. Annual Board Meetings
      5. Will you issue Stock? (or not if LLC)
      6. IRS & State election as an S Corporation
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  2. Regardless of your business designation, ALL MUST:
      1. Acquire a Federal EIN & State EIN
      2. Acquire a Local Business Permits/Licenses (business license, signage permit, building permit(s), alcohol & tobacco permit, health permit)
      3. Withhold Tax (FICA [Social Security], Medicare, State & Federal Income Tax)
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  3. You MAY BE REQUIRED to do the following based on the number of employees at your company:
      1. Register with Arkansas Workforce to pay Unemployment Insurance (UI)
      2. Purchase Worker’s Compensation Insurance (through a good business insurance company)
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  4. You MAY BE REQUIRED to do the following based on your company’s type and sales:
      1. Sales Tax (collection and remittance to the state – if you sell retail or online) (To get a permit go to: https://atap.arkansas.gov/_/#8)
      2. Personal Property Tax (filed in Arkansas through your county assessor)
      3. Inventory Tax (if you have physical inventory, filed through your county assessor)
      4. Real Estate Tax (unless you rent or lease space, filed through your county assessor)
      5. Individual and Corporate Income Tax (suggestion – use a good accountant or tax firm that specializes in business taxes)
      6. Motor Fuel Tax (if applicable)
      7. Misc. Taxes (if applicable)
      8. ASBTDC License, Permit, & Tax Requirements for Arkansas Small Businesses (eBook)
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  5. Tax Credits and Economic Development Incentives
              1. Check with your local ED or chamber office for state and local incentives and tax credit programs
              2. Grants
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  6. Opening Your Business
                1. Choose a city and location
                2. Get all licenses, permits, and certificate of occupancy (if applicable)
                3. If brick and mortar, prepare the building/facility; add stock
                4. Join your local chamber of commerce, schedule ribbon cutting and grand opening