Starting a Small Business

Unlike the character Kramer in the TV show “Seinfeld,” having a business idea requires a lot more follow-through than telling your friends about it and maybe giving it a few feeble tries. The idea is just the beginning for a small business to become a reality. There’s planning, financing and many other things to do when starting a small business.

The U.S. Small Business Administration offers a road map to small businesses that are just starting. Here are 10 of SBA’s steps for starting a small business:

Create a business plan
A business plan looks three to five years ahead, outlining the route to success and growing revenues. It includes a company profile and goals, market analysis of competitors, detail how the business is structured, what is being sold and how it benefits customers, a marketing plan and financial projections.

Get business assistance
The SBA offers free training and counseling services, including preparing a business plan, securing financing, and how to expand or relocate a business.

Location, location, location
As a real estate agent probably told you when house hunting, location is one of the most important decisions you’ll ever make. As a small business owner, you’ll want to look at demographics, the supply chain, where the competition is, a budget, understanding laws and taxes, and more.

You’ll also want to plan for future growth with a building that has extra space, be in a safe neighborhood, and understand local zoning regulations so you know if your business is allowed in a certain location.

Financing
Small businesses often need money to help them get started with all of the upfront costs of running a business. Loans are available from the SBA, such as its microloan program of small, short-term loans to small businesses.

There are also specific types of loans for real estate and equipment, and disaster loans if your business is hit by a natural disaster. Rockland Trust can help with business checking accounts and commercial loans, among other small business services.

Legal structure
Look into what form of ownership is best for your small business: sole proprietorship, partnership, Limited Liability Company, corporation, S corporation, nonprofit or cooperative. The business structure will determine your federal tax obligations for income taxes, self-employment taxes, and excise taxes, among others.

Register your business name
Unless you’re using your personal name to name your business, you’ll want to register it with the appropriate authorities.

Also known as “Doing Business As,” or DBA, registering a fictitious business name isn’t required in all states, but it is required in Massachusetts, according to the Massachusetts Small Business Development Center Network. A fictitious name is the legal name of the business and is different from your personal name, names or partners or officially registered name of your LLC or corporation.

Tax ID
If you have one or more employees, not including yourself, or you’re a partnership or corporation without employees, a federal Employer Identification Number, or EIN, is needed for federal and Massachusetts tax purposes. Also called a Federal Tax Identification Number, it is used to identify a business entity and can be applied for online.

Filing and paying taxes
Business taxes are required by the federal government, along with state and local taxes that include income taxes and employment taxes.

Massachusetts has a number of tax reporting requirements, and it may be worthwhile to hire an accountant to help your business when it first starts. The state also requires businesses to have workers’ compensation insurance and pay unemployment insurance taxes.

Business license
A business license and permit will be needed to run your business legally. If your business is regulated by a federal agency, you may need to obtain a federal license or permit. These include businesses that sell alcohol, firearms, commercial fishing, aviation, mining and drilling, nuclear energy, radio and TV broadcasting, and transportation.

The SBA has a Permit Me tool online to help find license and permit rules in your area. You enter your ZIP code and business type. Massachusetts has various license and permit requirements, and you should check with your local town clerk for local license information.

Employer responsibilities
Now that your business is finally set up, it’s time to learn about the responsibilities of being an employer and hiring your first employee. They include setting up records for withholding taxes, verifying an employee’s eligibility to work in the United States, display certain posters to inform employees of their rights, and set up record keeping, among many other tasks.

Starting a small business all adds up to a lot of work. But hopefully it will lead to a lot more success than what Kramer or anyone else who only kicked around a business idea had.