The Basics of Starting a Small Business
Following these nine steps to start a small business may feel like a lot of information but it will ensure that you are building the most solid foundation possible for your vision while completing the legal, fiscal and government requirements to be in compliance.
Your library is here to help connect you to resources that will help answer any questions or comments about the process.
Step 1: Begin With Research
Answer targeted questions to produce accurate information. You need to focus on demand, market size, various economic indicators, location, market saturation and pricing. Brainstorm what your ideal things would be: no competition around you, how popular your idea is, where is the next closest competitor, etc. Stay on top of current trends and investigate emerging ones.
Use your Library card to access databases:
Data Axle can help you conduct research to identify competitors and market saturation within any area.
EBSCO Small Business Reference Center has research material for every facet of Small Business, and full-text PDF NOLO Books to help you answer your legal questions.
Step 2: Create Your Business Plan
A business plan is crucial and serves as the solid foundation you’ll build your future business from. You’ll need to include information related to things like: what is your small business going to offer as a product or service, who would be your target market, and is there a demand for that product or service? Additionally, it’s important to include where the money is going to be coming from and used, how your small business will be legally structured, what are the financial projections for the first 3-5 years, and what type of marketing plan you will use.
A lean startup plan: shorter, focuses on the more important parts of the key parts of your plan.
A traditional style plan: more comprehensive and focuses on the details about your plan.
In Topeka and Shawnee County, an excellent resource to help with this step is the Washburn Small Business Development Center. Statewide, there is a program called NetWork Kansas that helps entrepreneurs and small business owners start and grow their businesses.
Step 3: Figure Out Your Funding
The first step is to calculate a realistic estimate of your startup costs. You want to give yourself and any funding sources a full financial picture. Topeka and Shawnee County have many organizations who want to help small business owners be successful and financially stable:
GOTopeka has several Small Business Incentive Programs:
Topeka and Shawnee County First Opportunity Fund (T/SC FOF)
Topeka and Shawnee County Small Business Incentive Program
Small Business Employee Training Grant: for small businesses to “enhance employee skillset” for two employees per company.
Small Business Equipment Purchase: for purchase of new/used equipment needed for day-to-day operation of the small business.
Small Business Construction and Renovation Incentive: for enhancing an existing business or construction of new property.
Marketing Incentive: for development or enhanced marketing programs for small business.
Other great funding resources include:
Venturize: resource to learn about various financial obligations for small businesses owners such as loans, retirement and healthcare.
Connect2Capital: resource to connect small business owners with mission-driven lending partners.
Start Up Kansas: a funding program through NetWork Kansas designed to provide gap financing to help small business owners start or grow their business.
Kansas Capital Multiplier Fund: NetWork Kansas partners with the Kansas Department of Commerce to offer a matching loan fund program for businesses raising capital.
E-Community Loan Funding: a program through NetWork Kansas that administers a local loan fund to help small business owners with capital, increase connection to resources and to initiate relationships and partnerships to foster entrepreneurial development.
Step 4: Choose Your Location
Decide if you want to have a physical location, a digital location, or both. The type of space will determine how you are taxed, what zoning laws are in place where you will be located, and various regulations your business could be subject to.
Step 5: Create Your Business Structure
Structuring your business is a key step to make sure you’re setting yourself up to succeed and build a solid foundation.
Sole Proprietorship: gives you complete control of your small business but makes you personally liable for any debts and obligations your small business incurs.
Partnership: a structure appealing for two or more people who will own a small business together.
Limited Partnership (LP): One general partner with unlimited liability, and the other partner(s) have limited liability. This can also mean that the limited partners have limited control over the company, per documented agreement.
Limited Liability Partnership (LLP): in this arrangement, all partners have limited liability. This structure also protects all involved partners from debs made against the partnership and partners aren’t held responsible for actions of other partners.
Limited Liability Company (LLC): this structure protects business owners from losing their personal assets (such as a vehicle, house
or financial accounts) in case of lawsuits or bankruptcy.Corporation: a legal entity that is created separate from an individual, that is made of three separate groups of people-shareholders, directors and officers. This setup can shield business owners from personal liability.
Step 6: Name, Register and ID Your Business
The name of your business is more than just a logo
or how people will refer to your small business. Small business owners must also consider the legal aspects of their chosen name. The biggest thing is to make sure the name you’ve selected is available; this can be checked through the Kansas Business Filing Center Name Availability Status.
In the state of Kansas, you cannot register DBA, Assumed Name, Trade Name, Fictitious Name or Sole Proprietorships. The state of Kansas also requires a small business to list a resident agent on business form documents. This person is designated to accept services of process for the business. They are required to be either an individual in Kansas, the business entity itself, or a corporation, limited partnership, limited liability partnership, limited liability company or a business trust.
Make sure to register for an Employer Identification Number (EIN), which is also your federal tax ID. This is required to pay your federal taxes, hire any employees, open a banking account or apply for any required licenses or permits. It is free to apply for.
Once you have your EIN, you can submit a Kansas Business Tax Application. After submitting this, you’ll need to visit the Kansas Department of Revenue’s Business Registration page to set up an account with the Department of Revenue. This process will let you know which additional business taxes you need to register for.
In Kansas, the minimum requirements to register a business with the state are:
• Kansas business location (and not a PO Box) • Business name
• Business type and structure
• Resident agent
Step 7: Required Licenses or Permits
Your business will encounter fewer road bumps if you make sure you’ve obtained the right licenses and/or permits before you begin operations. The State of Kansas Business Center is the best place to locate the right forms for your small business.
Visiting the Kansas Business One Stop, you can also check if your industry has any special license requirements and contact information for the appropriate agency to obtain the license.
To make sure you are following Shawnee County guidelines, visit their website to determine if there are any permits, filings or reporting requirements necessary to operate in that county.
Step 8: Business Bank Accounts
A business bank account can be opened once you’ve received your EIN. These accounts differ from a personal banking account and offer additional perks.
By using a business bank account, you get protection. It keeps your personal funds and accounts separate from those used by your small business.
You also show your customers your professional
side. Their transactions will interact with the business account, not you personally. This also lets you authorize employees to handle assorted tasks on behalf of the business.A business bank account lets you be prepared. No one wants or expects an emergency to happen, but an optional line of credit can literally be a business lifesaver. It also lets you handle those unexpected moments like replacing equipment or handling repairs with more confidence.
Finally, a business bank account lets you build a solid credit history tied to your small business, not your personal credit history. It can be very important to keep those separate, and a business credit card can help you make bigger purchases to help your small business off the ground.
Step 9: Business Insurance
Small business insurance can help cover damage and lawsuits from accidents, natural disasters, professional errors, and workers compensation claims. It can also fill in the gaps to make sure your personal and business assets are fully protected. If you have employees, you are required by the federal government to have workers’ compensation, unemployment and disability insurance.
Four steps to buying business insurance:
Assess your risks. Think about what
kind of natural disasters, accidents or lawsuits could happen to your business. Check with the National Federation
of Independent Businesses to get assistance with risk assessment.Locate a reputable and licensed commercial insurance agent to match a policy to your needs. Make sure you find an agent who is interested in matching your needs with the right coverage.
Shop around. Don’t just go with the first agent or company you come across. Make sure what they are offering makes sense, fits your needs and is something you can rely on.
Annually re-assess your coverage. As your business grows, expands and changes, it is likely that your coverage needs will also. Don’t be afraid to reach out to your agent and discuss changes in your policy to make sure you are still getting the right type of coverage and protection for your small business.
GET IN TOUCH
Meredith Snepp, Business Librarian
Topeka and Shawnee County Public Library 1515 SW 10th Ave | Topeka, KS 66604-1374 (785) 580-4647 | tscpl.org
Small Business Administration: www.sba.gov | https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (Table of standards across industries)
Data Axle, Ebsco Small Business Reference Center: find at www.tscpl.org under Databases (will need Library card to get into database, but is free to use)
Washburn University Small Business Development Center: www.washburnsmallbusiness.com | 785-215-8375 ext. 114 | 719 S Kansas Ave STE 100,
Topeka KS 66603 (inside the US Bank Branch building)
NetWork Kansas: www.networkkansas.com | 877-521-8600 | 550 North 159th St E Unit 208, Wichita KS 67230
GOTopeka: www.gotopeka.com | 785-234-2644 | 719 S Kansas Ave STE 100, Topeka KS 66603 (inside the US Bank Branch building)
Venturize: www.venturize.org
Connect2Capital: www.connect2capital.com | www.connect2capital.com/business-loans/
StartUp Kansas: www.networkkansas.com/capital | 877-521-8600 (this information covers StartUp Kansas, Kansas Capital Multiplier Fund, and the E-Community
Loan Fund)
Kansas Business Filing Center Name Availability Status: https://www.kansas.gov/businesscenter/index.html?appid=2&submit=Search
Kansas Department of Revenue Business Registration: www.ksrevenue.org/busregistration.html
Kansas Business Center: https://www.kansas.gov/businesscenter/
Kansas Business One Stop: www.ksbiz.kansas.gov
National Federation of Independent Businesses: https://www.nfib.com/
Kansas Procurement Technical Assistance Center (Kansas PTAC): assists businesses with exploring the government marketplace for local, state and federal
contracting opportunities | 316-978-6788 | 238 N Mead, Wichita, KS 67202
