Use these tools and resources to create a business plan. This written guide will help you map out how you will start and run your business successfully.
- Executive Summary
- Company Description
- Market Analysis
- Organization & Management
- Service or Product Line
- Marketing & Sales
- Funding Request
- Financial Projections
- Appendix – Resume, Permit, Leases, and Other Information
Get advice on how to select a customer-friendly location and comply with zoning laws.
Choosing a business location is perhaps the most important decision a small business owner or start up will make, so it requires precise planning and research. It involves looking at demographics, assessing your supply chain, scoping the competition, staying on budget, understanding state laws and taxes and much more.
Here are some tips to help you choose the right business location.
Determine Your Needs
Most businesses choose a location that provides exposure to customers. Additionally, there are less obvious factors and needs to consider, for example:
- Brand Image – Is the location consistent with the image you want to maintain
- Competition – Are the businesses around you complementary or competing
- Local Labor Market - Does the area have potential employees? What will their commute be like
- Plan for Future Growth -If you anticipate further growth look for a building that has extra space, should you need it
- Proximity to Suppliers – They need to be able to find you easily as well
- Safety – Consider the crime rate. Will employees feel safe alone in the building or walking to their vehicles
- Zoning Regulations – These determine whether you can conduct your type of business in certain properties or locations. You can find out how property is zoned by contacting your local planning agency
Evaluate Your Finances
Besides determining what you can afford, you will need to be aware of other financial considerations:
- Hidden Costs – Very few spaces are business ready. Include costs like renovation, decorating, IT system upgrades, and so on
- Taxes – What are the income and sales tax rates for your state? What about property taxes? Could you pay less in taxes by locating your business across a nearby state line
- Minimum Wage – While the federal minimum wage is $7.25 per hour, many states have a higher minimum. View the Department of Labour’s list of minimum wage rates by state
- Government Economic Incentives – Your business location can determine whether you qualify for government economic business programs, such as state-specific small business loans and other financial incentives
Is the Area Business Friendly ?
Understanding laws and regulations imposed on businesses in a particular location is essential. As you look to grow your business, it can be advantageous to work with a small business specialist or counselor. Check what programs and support your state government and local community offer to small businesses. Many states offer online tools to help small business owners start up and succeed. Local community resources such as SBA offices, small business development centers, women’s business centers and other government-funded programs specifically support small businesses.
Decide which form of ownership is best for you: sole proprietorship, partnership, Limited Liability Company (LLC), S corporation, nonprofit or cooperative.
When starting a business, you must decide what form of business entity to establish. Your form of business (e.g., sole proprietorship, partnership, LLC) determines which income tax return form you have to file. The federal government levies four basic types of business taxes:
- Income tax
- Self-employment tax
- Taxes for employers
- Excise taxes
To learn more about these taxes, visit the Internal Revenue Service’s (IRS). Guide to Business Taxes.
Federal Income Taxes
Select the form of your business below to find out which federal tax forms you need to file:
Limited Liability Company (LLC)
State Income Taxes
Nearly every state levies a business or corporate income tax. Like federal taxes, your state tax requirement depends on the legal structure of your business. For example, if your business is an LLC, the LLC is taxed separately from the owners of the business, while sole proprietors report their personal and business income taxes using the same form that is used to report their business taxes. Consult the General Tax Information link on the State and Local Tax Guide for specific requirements.
Register your business name with your state government.
Naming your business is an important branding exercise, but if you choose to name your business as anything other than your own personal name then you’ll need to register it with the appropriate authorities.
This process is known as registering your “Doing Business As”(DBA) name.
What is a “Doing Business As” Name?
A fictitious name (or assumed name, trade name or DBA name) is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or corporation.
It is important to note that when you form a business, the legal name of the business defaults to the name of the person or entity that owns the business, unless you choose to rename it and register it as a DBA name.
For example, consider this scenario: “John Smith sets up a painting business”. Rather than operating under his own name, John chooses to name his business: “John Smith Painting”. This name is considered an assumed name and John will need to register it with the appropriate local government agency.
The legal name of your business is required on all government forms and applications, including your application for employer tax IDs, licenses and permits.
Do I Need a “Doing Business As” Name?
A DBA is needed in the following scenarios:
- Sole Proprietors or Partnerships – If you wish to start a business under anything other than your real name, you will need to register a DBA so that you can do business as another name.
- Existing Corporations or LLCs – If your business is already set up and you want to do business under a name other than your existing corporation or LLC name, you will need to register a DBA.
Note: Not all states require the registering of fictitious business names or DBAs.
How to Register your “Doing Business As” Name
Registering your DBA is done either with your county clerk’s office or with your state government, depending on where your business is located. There are a few states that do not require the registering of fictitious business names.
Learn which tax identification number you'll need to obtain from the IRS and your state revenue agency.
Register with your state to obtain a tax identification number, workers' compensation, unemployment and disability insurance.
In addition to business taxes required by the federal government, you will have to pay some state and local taxes. Each state and locality has its own tax laws. The links below provide access to key resources that will help you learn about your state tax obligations. Having knowledge of your state tax requirement can help you avoid problems and your business save money. The most common types of tax requirements for a small business are income taxes and employment taxes.
Nearly every state levies a business or corporate income tax. Your tax requirement depends on the legal structure of your business. For example, if your business is a Limited Liability Company (LLC), the LLC gets taxed separately from the owners, while sole proprietors report their personal and business income taxes using the same form. Consult the General Tax Information link under your state for specific requirements.
In addition to federal employment taxes, business owners with employees are also responsible for paying certain taxes required by the state. All states require payment of state workers’ compensation insurance and unemployment insurance taxes. The following states/territories also require a business to pay for temporary disability insurance:
- New Jersey
- New York
- Rhode Island
- Puerto Rico
State and Territory Tax Resources
Use the links below to find out more about what you have to do to register and be open for business in your state.
District of Columbia
Guam does not have an unemployment insurance tax.
U.S. Virgin Islands
Get a list of federal, state and local licenses and permits required for your business.
- Federal Licenses and Permits
- State Licenses and Permits
Learn the legal steps you need to take to hire employees.
If your business is booming, but you are struggling to keep up, perhaps it’s time to seek some help.
The eight steps below can help you start the hiring process and ensure you are compliant with key federal and state regulations.
Step 1. Obtain an Employer Identification Number (EIN)
Before hiring your first employee, you need to get an employment identification number (EIN) from the U.S. Internal Revenue Service. The EIN is often referred to as an Employer Tax ID or as Form SS-4. The EIN is necessary for reporting taxes and other documents to the IRS. In addition, the EIN is necessary when reporting information about your employees to state agencies. Apply for EIN online or contact the IRS at 1-800-829-4933.
Step 2. Set up Records for Withholding Taxes
According to the IRS, you must keep records of employment taxes for at least four years. Keeping good records can also help you monitor the progress of your business, prepare financial statements, identify sources of receipts, keep track of deductible expenses, prepare your tax returns and support items reported on tax returns.
Below are three types of withholding taxes you need for your business:
- Federal Income Tax Withholding
Every employee must provide an employer with a signed withholding exemption certificate (Form W-4) on or before the date of employment. The employer must then submit Form W-4 to the IRS. For specific information, read the IRS’ Employer’s Tax Guide [PDF].
- Federal Wage and Tax Statement
Every year, employers must report to the federal government wages paid and taxes withheld for each employee. This report is filed using Form W-2 wage and tax statement. Employers must complete a W-2 form for each employee who they pay a salary, wage or other compensation.
Employers must send Copy A of W-2 forms to the Social Security Administration by the last day of February to report wages and taxes of your employees for the previous calendar year. In addition, employers should send copies of W-2 forms to their employees by Jan. 31 of the year following the reporting period. Visit SSA.gov/employer for more information.
- State Taxes
Depending on the state where your employees are located, you may be required to withhold state income taxes. Visit the state and local tax page for more information.
Step 3. Employee Eligibility Verification
Federal law requires employers to verify an employee’s eligibility to work in the United States. Within three days of hire, employers must complete Form I-9, employment eligibility verification, which requires employers to examine documents to confirm the employee’s citizenship or eligibility to work in the U.S. Employers can only request documentation specified on the I-9 form.
Employers do not need to submit the I-9 form with the federal government but are required to keep them on file for three years after the date of hire or one year after the date of the employee’s termination, whichever is later.
Employers can use information taken from the Form I-9 to electronically verify the employment eligibility of newly hired employees by registering with E-Verify.
Visit the U.S. Immigration and Customs Enforcement agency’s I-9 website to download the form and find more information.
Step 4. Register with Your State’s New Hire Reporting Program
All employers are required to report newly hired and re-hired employees to a state directory within 20 days of their hire or rehire date. Visit the New Hires Reporting Requirements page to learn more and find links to your state’s New Hire Reporting System.
Step 5. Obtain Workers’ Compensation Insurance
All businesses with employees are required to carry workers’ compensation insurance coverage through a commercial carrier, on a self-insured basis or through their state’s Workers’ Compensation Insurance program.
Step 6. Post Required Notices
Employers are required to display certain posters in the workplace that inform employees of their rights and employer responsibilities under labor laws. Visit the Workplace Posters page for specific federal and state posters you’ll need for your business.
Step 7. File Your Taxes
Generally, employers who pay wages subject to income tax withholding, Social Security and Medicare taxes must file IRS Form 941, Employer’s Quarterly Federal Tax Return. For more information, visit IRS.gov.
New and existing employers should consult the IRS Employer’s Tax Guide to understand all their federal tax filing requirements.
Step 8. Get Organized and Keep Yourself Informed
Being a good employer doesn’t stop with fulfilling your various tax and reporting obligations. Maintaining a healthy and fair workplace, providing benefits and keeping employees informed about your company’s policies is a key to your business’ success. Here are some additional steps you should take into consideration after you’ve hired your first employee:
Set up Recordkeeping
In addition to requirements for keeping payroll records of your employees for tax purposes, certain federal employment laws also require you to keep records about your employees. The following sites provide more information about federal reporting requirements:
Tax Recordkeeping Guidance
Labor Recordkeeping Requirements
Occupational Safety and Health Act Compliance
Employment Law Guide (employee benefits chapter)
Apply Standards that Protect Employee Rights
Complying with standards for employee rights in regards to equal opportunity and fair labor standards is a requirement. Following statutes and regulations for minimum wage, overtime and child labor will help you avoid error and a lawsuit. See the Department of Labor’s Employment Law Guide for up-to-date information on these statutes and regulations.
Also, visit the Equal Employment Opportunity Commission and Fair Labor Standards Act.