Business Startup Steps
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Market Research for Small Business
Q: When should I use market research?
A: There are certain times in a company’s life-cycle when market research can be particularly useful. For example:
To see whether a new business idea is viable
- You have an idea for a new business. Is there a market for it? Don’t just guess – use market research to find out.
When moving into new markets
- This is especially true when selling abroad. Different countries and cultures have different markets. What works in one might not work in another. Research will help you uncover the differences and adapt to them.
Before launching a new product or service
- You might think you have the perfect new product or service – your customers may think otherwise. It pays to get feedback before you launch, so you can make any necessary changes quickly.
When applying for funding
- Show potential investors that there’s a gap in the market – and that your company is the one to fill it.
Use analytical sites like ESRI to help you determine the need for your type of business in your area.
Resources:
How to Create the Perfect Business Plan in 10 Steps
Q: Why do I need a business plan?
A: You may be wondering why you need a plan in the first place. After all, you have a clear idea in your mind about what you want to achieve. You know the market, you have the necessary skills. So why do you need a plan?
There are many good reasons. Here are just a few of them:
To clarify your ideas
- Writing something down gives it structure and substance. Your ideas will be clearer on paper than in your head.
To discover and solve problems
- The business idea you have in mind may have some holes – you might not have covered everything. This will become much more apparent when your words are on the page.
To get feedback from others
- A properly written business plan can be shared with trusted people to get their advice.
As a formal document
- Banks, investors, accountants and lawyers will want proof that you’re serious about your business. A written plan will provide that proof. To guide you as your business grows
- A good business plan will keep you on track and focused, even as day-to day work becomes a distraction.
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Are You Ready to Seek Funding? This 10-Point Checklist Will Decide
Determine how much funding you’ll need
Fund your business yourself with self-funding
- Self-funding can come in the form of turning to family and friends for capital, using your savings accounts, or even tapping into your 401k. Get venture capital from investors
- Venture capital differs from traditional financing in a number of important ways. Venture capital typically:
- Focuses high-growth companies
- Invests capital in return for equity, rather than debt (it’s not a loan) 3. Takes higher risks in exchange for potential higher returns 4. Has a longer investment horizon than traditional financing Get a small business loan
- To increase your chances of getting a loan, you should have a business plan, expense sheet, and financial projections for the next five years. • These tools will give you an idea of how much you’ll need to ask for, and will help the bank know they’re making a smart choice by giving you a loan.
- Once you have your materials ready, contact banks and credit unions to request a loan and compare offers to get the best possible terms for your loan.
If you are looking for commercial real estate in Auburn contact Leslie with the Auburn Chamber of Commerce at 402-274-3521 to learn about available options!
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Q: What is a business structure?
A: Whether you’re a first-time startup or an established business, it pays to think about business structure. There are six types, offering different levels of:
- legal protection
- administrative simplicity
- tax exposure
The choice you make will affect your rights and responsibilities. Options are:
- Sole proprietor
- Partnership
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP)
- S-Corporation
- C-Corporation
Visit the link at the beginning of this section to delve into the differences of each option or get advice from experts like Auburn accountant Heather Pemberton, CPA 402-858-2041.
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Register your business name to protect it.
There are four different ways to register your business name:
- Entity name protects you at state level
- Trademark protects you at a federal level
- Doing Business As (DBA) doesn’t give legal protection, but might be legally required
- Domain name protects your business website address
Choose a logo and stick with it!
It may get old to you, but it will always be fresh to new customers and build loyalty with existing customers.
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Get Federal and State Tax ID Numbers
Get a federal tax ID number: Internal Revenue Service
- Your Employer Identification Number (EIN) is your federal tax ID, and you need it to pay federal taxes, hire employees, open a bank account, and apply for business licenses and permits.
- It’s free to apply for an EIN, and you should do it right after you register your business.
- Your business needs a federal tax ID number if it does any of the following:
- Pays employees
- Operates as a corporation of partnership
- Files tax returns for employment, excise, or alcohol, tobacco, and firearms
- Withholds taxes on income, other than wages, paid to a non-resident alien
- Uses a Keogh Plan (a tax-deferred pension plan)
- Works with certain types of organizations
Get a state tax ID number: Nebraska Department of Revenue
- The need for a state tax ID number ties directly to whether your business must pay state taxes.
- To know whether you need a state tax ID, research and understand your state’s laws regarding income taxes and employment taxes, the two most common forms of state taxes for small businesses.
- The process to get a state tax ID number is similar to getting a federal tax ID number, but it will vary by state and you’ll have to check with your state government for specific steps.
Resources:
Nemaha County Health Inspector: Ann Franklin 402-430-3932 (cell)
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Local Banks:
Most business bank accounts offer perks that don’t come with a standard personal bank account.
Protection
- Business banking offers limited personal liability protection by keeping your business funds separate from your personal funds. Merchant services also offer purchase protection for your customers and ensures that their personal information is secure.
Professionalism
- Customers will be able to pay you with credit cards and make checks out to your business instead of directly to you. Plus, you’ll be able to authorize employees to handle day-to-day banking tasks on behalf of the business.
Preparedness
- Business banking usually comes with the option for a line of credit for the company. This can be used in the event of an emergency, or if your business needs new equipment.
Purchasing power
- Credit card accounts can help your business make large startup purchases and help establish a credit history for your business.