So you want to start a new business this year? Congratulations!
While running a small business certainly has its challenges, the rewards can be outstanding, and what you gain from your experiences can help you build an even brighter financial future over time.
If you need help covering all the bases, this first Chambers Bank blog of a three-part series will walk you through some important steps to take as you prepare for your new venture.
Research Your Market
One of the first steps to getting your business started is researching your market. You will want to know how much demand exists for the products or services you plan to offer plus understand your target clientele. In addition, it’s important to find out who your competitors are and how much market risk you will bear.
You can use existing information to conduct your research, but if you’re in a niche market or your target clientele is very specific, you might also want to conduct some surveys or interviews to get a good picture of what your market will look like.
To learn more about how to conduct market research (plus get free templates), check out this guide by HubSpot.
Develop a Business Plan
Building a strong business plan ensures that your small business will meet your overall goals and objectives plus reflect the current market environment. That said, it’s important that you create a business plan to help you map out all aspects of your business. The plan should include details about your product or service offerings, your sales venues, how you will market your business, and more.
Common elements of most business plans include an executive summary, company description, products and services, market analysis, marketing strategy, financials, and budget. Get started on your business plan by following this guide from the Small Business Administration (SBA).
Decide How to Structure Your Business
The way you structure your business legally will affect your tax filing status as well as your assets and liabilities both professionally and personally. You can begin as a sole proprietor, LLC, or corporation depending on what type of business you’re starting.
Talking with a tax professional will help clarify the best structure to choose, as will reading through the guide “Doing Business in Arkansas” on the Arkansas Secretary of State website.
If you’re starting an Arkansas LLC or corporation, you can register your entity here on the Corporations Online Filing System.
Register For a Federal Tax ID
An employer identification number (EIN) is a nine-digit tax number issued to your business by the IRS. You use this number when paying your estimated taxes, filing income taxes, opening business bank accounts, applying for business loans, and more.
While not every business owner is required to have an EIN (e.g., you’re a solopreneur with no employees), it can be beneficial to have one because it:
- Keeps your Social Security Number separate, which aids in preventing identity theft.
- Allows your business to establish credit independently from your personal credit.
- Helps you easily open business banking accounts.
- Gives you more credibility with customers and suppliers.
- Keep your business assets and liabilities separate from your personal assets and liabilities.
Need an EIN for your business? Go to this IRS website and apply free online.
Open Up a Business Banking Account
After establishing a business name and getting an EIN (if required), you will need to start a business banking account to manage your income and expenses. It’s best to do this before you start operating your business so you’re not running business transactions through your personal accounts.
Chambers Bank offers several excellent business checking accounts you can select from depending on business type. All accounts come with a free debit card, Online Banking, Mobile Banking, Business Bill Pay, and Mobile Deposit.
Bonus: As a business banking member, you also gain access to a variety of additional services including ACH processing, remote deposit, online wires, and more. See our Business Services page for all the details.
Choose an Accounting Software That Fits
Recordkeeping is a critical element of business management that small business owners sometimes fall behind on–especially when just starting out. That’s why it’s beneficial to try a few software options out and see which one is going to work well with your business and with your business banking accounts.
You’ll find many popular small business software options out there such as QuickBooks, Zoho Books, and Xero. Most allow you to do free trials and some are always free if you only need basic service.
Note: If you open a business checking account with Chambers Bank, you can utilize Online Banking to easily export your financial data to your accounting software. All data is compatible with QuickBooks and Quicken.
Apply for Permits and Licenses
Depending on what type of business you’re starting, you may need to obtain certain permits or licenses before taking on any clients or customers. You can usually get advice from your local chamber of commerce or economic development council, but Arkansas Secretary of State’s Business Startup Wizard has a helpful walkthrough on the topic.
Take Out Business Insurance
Business insurance helps protect your business’s assets in the event that a claim arises due to legal issues, property damage, or injuries caused by your operations. The cost of this insurance varies by industry type, the assets involved, the number of employees, and company size. Yes, it’s an added expense to running a business, but is generally worthwhile and always tax-deductible.
If you have a local agent for personal insurance, check to see if they also sell business insurance. It’s also helpful to get a few quotes from other agents and compare rates, terms, and benefits.
Read more about obtaining business insurance on the SBA website.
Get Organized
Whether it's handling production tasks, storing documents, or tracking inventory, having efficient operations set up when you start a business will make a big difference in your day-to-day progress. So … it’s time to get organized!
A few things: Make sure to file all of your physical and digital documents logically so they’re accessible to others in your business, as appropriate. Also, keep a digital backup of your documents available in case of a data loss or security breach–and always maintain anti-virus software on your computers and mobile devices.
For online document storage, Google Drive, Dropbox, or OneDrive are good options. Also, for organizing tasks and projects, online tools like Asana, Slack, or Microsoft Teams are widely popular today.
New Year, New Opportunities with Chambers Bank!
At Chambers Bank, we want to see your business succeed this year and every year. If you have questions about your accounts or any of our services, please reach out to our Business Services team by filling out our online form here.
