You Have a Great Idea, Now What?

You’ve spent hours dreaming, researching and planning, and you are finally ready to take the leap! It can be a little overwhelming if you are starting from the ground up. Here are some tips for startups in Kentucky and Indiana, to help you build on a solid foundation.

Form your team of advisors

This is a very important step. You will avoid numerous pitfalls if you form connections with a reputable business attorney, a trusted CPA, a savvy banker, and a proactive insurance agent right from the start. These professionals will help you navigate safely through the many challenges that face a new business. Ask owners of established businesses, or perhaps retired business owners, to serve as your mentors, and listen to their advice.

Determine which entity type is best for you

Two of the most important questions to answer are: 1) how does the structure impact my personal liability for things that happen in the business; and 2) how does the structure affect the amount of tax I will have to pay? You can research this online at sites such as the IRS Small Business and Self-Employed Tax Center or SBA.gov, but consult with your attorney and tax advisor to make sure the proper paperwork is completed and filed.

Consider business incentive programs

Both Indiana and Kentucky have generous business incentives and financial programs.

Decide on a name and register your business

The legal name of a business is the name of the person or entity that owns the business. One may choose to do business under a fictitious name (assumed name, or DBA “doing business as” name). Be sure to check to see if the name is available, and if so, register it for your exclusive use with the Secretary of State (click for Kentucky or Indiana) and County Recorder or County Clerk.

Obtain necessary business licenses and permits

The first step is to obtain an employer identification number (EIN) from the IRS. The local, state and federal requirements to legally operate your business can vary depending on the type of business, business structure, business location, etc. Kentucky has a One Stop Business Portal that is very helpful. Indiana has a similar site.

Develop your business plan with financial projections

This is where you put your vision on paper. The process of developing the plan is as valuable as the plan itself, so even if it is contained in a notebook that only you will see, invest the time. If you need it to obtain financing, seek help from a professional. It will be well worth it.

Open a bank account and obtain needed funding

In addition to traditional small business loans, federal, state and local governments provide access to a variety of financing programs to help small businesses. Utilize this Loans and Grants Search Tool to get a list of programs for which you may qualify. Access Ventures is another great resource when it comes to access to capital – read about the new regional capital fund here.

Address insurance needs

Some types of coverage are required by law, others simply make good business sense. Liability, property, business interruption, key man, home office, automobile and umbrella insurance are forms of coverage you’ll want to discuss with your agent.

Hire the right people

Personal referrals are often the best choice, so put the word out about what you are seeking. There are also many online sites where you can post jobs or search for candidates, such as monster.com, careerbuilder.com, indeed.com, simplyhired.com, indianacareerconnect.com (free IN site), Kentucky Career Center (free KY site), LiveInLou.com and others. Whether you have one employee or many, as a new employer you are subject to federal, state and local tax withholding and/or filing requirements. Refer to IRS Pub. 15 Employer’s Tax Guide for federal obligations.

Choose a user-friendly accounting application

You want one that provides the current, anytime/anywhere information you need to run your business, integrates well with other technology, and makes it easy for you to collaborate real-time with your financial advisors. Some of my favorites are QuickbooksXeroBill.com and Gusto for payroll/HR.

Plan properly for tax time

While sites like the IRS Small Business and Self-Employed Tax Center and the Gig Economy Tax Center can provide helpful information, it is always best to consult a tax professional to ensure you are calculating and remitting quarterly estimated taxes properly and maximizing available business deductions.

Take advantage of local resources

Promote your business

Let people know who you are and what you do. Don’t underestimate the value of social platforms for connecting with your target audience and developing personal relationships. For more tips on how to maximize the time you spend online and at events, contact DMLO Marketing Director Delene Taylor.

Adapted from article published in Business First, March 2011

More information and resources

Much of business success can be attributed to attitude and perseverance, and forming the right relationships. For more information on any of the information discussed above, contact Delene Taylor.

For a great video presentation of Tax Tips for Startups from DMLO Director Steve Custer, click here. Thank you Amplify Louisville for inviting us to speak! Check out the many other resources on their website.

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