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How do I start an online business?
When starting an online business, we suggest you treat it exactly the same as a brick and mortar business. Start with research and planning. Is there a market for your products or service? Do you have experience working with the audience you want to attract? What value are you bringing your potential customers? How are your competitors doing and what are they doing to attract online customers? What start up expenses will you have? Do you have the techinical skills needed to manage an online market place or can you learn them? Do you have reliable high speed internet service? If you answered these questions and would like to move forward, make an appointment with an SBDC consultant to discuss your idea.
Can the SBDC help me start a nonprofit?
No, we are prevented from doing so because the SBDC is an economic development arm of the state of Idaho. Therefore, we rely on tax-supported appropriations and are mandated to work only with for-profit companies. We welcome you to any SBDC workshops that may assist you in your venture. You are always welcome to utilize our no-cost resources on our website. For non-profit assistance, please visit the Idaho Non-Profit Center and the Internal Revenue Service website.
Can the SBDC help me start a marijuana-based business?
Our cooperative agreement with the Small Business Administration (SBA) states our award is governed by and constituted under federal law. Since marijuana is illegal under federal law, we are prevented from assisting marijuana growers or distributors.
What do I need to do to start my own business?
One of the most important things to do before starting your own business is to determine whether or not your business idea is feasible. You must research your idea to ensure that your business has a favorable chance for success, will meet your expectations, and will provide an adequate reward for the risk involved. It is wise to validate your beliefs about your business concept through research and careful planning because you will not have time to do it once you start your business.
What is the best type of business to start? Is it better to buy an existing business or start a new one?
Typically, new businesses are based on the owner’s interest or passion, since business ownership requires a big investment of time and resources. Having previous skills or knowledge relevant to a particular trade or industry is also a plus when considering what kind of business to start. Regardless of the type of business, you must determine whether adequate demand exists for the product/service you will offer.
As to whether to buy or start a business, consider your goals and potential return on investment. An existing business should have established procedures and processes, operations, reputation, and a customer base. These are assets – and the reason existing businesses frequently sell at a premium. If the business is lacking in these areas (and priced accordingly), beware. Also, an existing business may have “baggage” that can cause problems for the future owner, whereas a new business can start with a clean slate.
While it may take less money to start a new business than it does to purchase a going concern, it takes time and can be very difficult to build the business. The new business also has no track record on which to base decisions. Significant working capital is often required to grow a new business. The bottom line is that every business purchase situation is different and should be carefully evaluated on its own merits.
Where can I find out about licenses and taxes?
Requirements for licensing and taxes vary by business type and legal structure. You can find information in the Business Wizard and in the text pages on our companion site, business.idaho.gov. An SBDC counselor can also help you figure out your particular requirements.
What business should I choose?
Usually, the best business for you is the one in which you are most skilled and interested. As you review your options, you may wish to consult local business experts, such as the SBDC or a SCORE counselor. Do your market research, both locally and nationally, to understand the growth potential of your business idea. Matching your background with the needs of the local market will increase your chance of success.
How long will it take to start a small business?
As long as it takes you to complete your feasibility study, prepare your business plan, gather your money, buy what you need to buy, and arrange your business operation affairs. This could take a few weeks or many months. If you have difficulty with any of these items, the time to learn and solve problems must be added.
Should I buy an existing business to start?
The advantage of buying an existing business is that it is already established in the market. It has customers and is carrying on business. You avoid the hassle and expense of starting from scratch. The trick is making it fit your desires and capabilities. Is it the kind of business you want? Can you afford it? Can you operate it? Make sure you work with an SBDC consultant and a tax professional to understand the value in what you are buying and ensure there is information and systems in place to help you take over.
What business licenses do I need to start?
Different licenses may be needed for different business types or professions. For example, a plumber or a cosmetologist needs a professional license in Idaho, but a retail store does not. Some municipalities require business licenses and some do not. Your city clerk can tell you if you need one. (Idaho does not have a state business license requirement.) We are here to help you sort through the licenses and permits (such as a sales tax permit) you may need.
Note that licenses differ from the type of legal entity you choose for you business (e.g. LLC, sole proprietor, C Corp). You need to first register your entity type with the Idaho Secretary of State before you apply for licenses and permits.
What basic skills do I need to run a business?
The basic skills include:
- product or service knowledge as it relates to your business
- record keeping
- financial management including breakeven analysis
- personnel management if you have employees
- marketing and market analysis skills
- legal structures
- federal, state and local taxes
- communication skills
In addition to these technical skills, it is most important to have a willingness to learn, adapt, and make changes in a timely way.
What initial costs should I consider?
Initial costs are one-time and recurring expenses that are needed to set your business in motion. There’s no way you can start and build a successful small business if you don’t have the funds to back it up. Start by making a list of ALL your initial costs, no matter how small or insignificant.
- name and entity registration with the Secretary of State
- legal fees
- licenses and permits
- rent and security deposit
- building/remodeling if appropriate
- initial product inventory
- furniture and equipment
It’s not enough to consider how much a large piece of machinery costs. You also need to think about the costs involved with transporting it or setting it up. Everything needs to be accounted for. Then consider your ongoing costs (expenses you anticipate paying again and again), such as rent and utilities. Once you know what it may cost to start your business you can decide whether to move forward or wait awhile.
How can I get my business certified as minority or women owned?
The federal government considers a minority-owned business as one owned by a woman, disabled person or anyone of a nationality other than white. The business must be owned and at least 51% controlled by one or more minorities. It is a self-certifying process and no paperwork needs to be filled out unless you plan to apply for government contracts. If you are interested in federal or state government contracting, contact Idaho PTAC for assistance in becoming certified.
What insurance should I have?
An important aspect of your business is a well-planned insurance program. Types of insurance you should consider are:
- Property Insurance
- Liability Insurance
- Product Liability Insurance
- Automobile Insurance
- Worker’s Compensation if you have employees
- Business Interruption Insurance
- Health Insurance
- Life Insurance.
Your SBDC consultant may have local referrals or contact an insurance agent who specializes in business insurance.
Should I buy a franchised business to start?
Approximately 40 percent of present-day retailing in the U.S. is done through the franchise method, which makes owning a franchise an appealing option. There are definite advantages to starting out with a franchised business, but it is important to be knowledgeable about the different kinds of franchising options available to you. Some offer fair value for what you pay and others are rip-offs. Get legal or business counseling advice before purchasing a franchise. You may also visit SBDC partner FranNett .