Taking the leap to go out on your own and start your own business is an exciting, yet scary time. Going from “working for the man” to being the man is the American dream. There are lots of factors to consider when creating your business to make sure you are starting off on the right foot. 2018 U.S. Small Business Administration (SBA) statistics show that only about half of all small businesses survive the first five years of operations and about one-third go past 10 years. That being said, you want to make sure that you have everything mapped out to set you and your business up for success from the start. The information below is meant to provide you with the steps for doing so in Florida.
1. Determine Your Business Idea/Plan
Creating a successful and lucrative business isn’t as simple as creating an idea and running with it. It takes intentional ideating, planning, assessing, analysis, and implementation. By and large, your first step is creating your idea, then mapping out your plan to make sure that it is viable and profitable. You want to be sure to cover all avenues in your business plan — this should include (at minimum):
- How you plan to fund your business: Some individuals can initially fund the business out-of-pocket until revenue starts to come in, but this isn’t the case for most businesses. There are two common avenues for funding, business loans, and investors;
- What the market looks like: You need to be sure that there is a need for your business and whether or not you can be competitive within the niche. If you are in a small town, trying to compete with 5 other pizza businesses (2 of them being large chains), you aren’t setting yourself up for success. Take a look at the competitive landscape and analyze potential profitability;
- Infrastructure: More and more businesses are switching to online business models, but not all businesses can do this. Even if you have an online business, you will likely need some sort of storage or warehouse for your product. You want to be sure that you establish what sort of physical infrastructure you will need to operate and where that will be. Location is key, so take your time choosing where your business will be located;
- Create a budget: This is a key aspect and you want to be sure that your business takes every possible cost into consideration to make sure you have the right funding to back your plan.
It is possible to create your business plan on your own, but it could prove useful to include a business consultant to make sure that you have all of your bases covered before progressing.
2. Define Your Business Structure
You want to be sure to establish your business structure for registration, legal, and tax purposes. You have a few different options to choose from, these are:
- Sole Proprietorship: An enterprise owned and operated by one single entrepreneur;
- Partnership: A formal agreement between two or more people to operate a business jointly;
- Limited-Liability-Company (LLC): A private, limited business entity operated through state statute. The specifics vary from state to state;
- Corporation: A limited liability, legal, entity that is detached from the owner;
- Non-profit: A legal entity that operates on public, collective, or social funding for no profit. This does not mean that the employees are working for free, just that the business itself isn’t generating a profit.
There are pros and cons to each respective business structure, so weigh them out and decide what you think is best for your business plan.
3. Choose a Business Name
You may already have some business name ideas in mind, but consider that this is something you will build your branding and marketing efforts around. Take your time, do your research, and pick a name that represents you and your business. This should help you stand out from the competition as well.
Unless you are operating a business under your legal name, Florida requires you to register your “doing business as” or DBA. The cost of this in Florida is $50 and you can do this entirely online through the Florida Department of State. Florida also requires you to advertise your business and new business name in the newspaper once. You can choose the newspaper of your choice (as long as it is in your business county).
4. Complete Registration Steps
Once all of the above steps have been completed, you need to register your business. You can find all of the information on how to do this on the Florida Department of State website. The exact steps will vary depending on your determined business structure — but you will generally need the following information:
- Business name;
- Principal place of business address;
- Corporate purpose statement;
- Effective start date;
- Any stock shares (if applicable).
You will also need to register for an Internal Revenue Service Employee Identification Number (EIN). This can be done entirely online on the IRS official website. There are some organizations that are exempt, and there is more information about this on the IRS website if you feel that you may be eligible for tax-exempt status.
There are both federal and state taxes implications, so you will also need to register your business with the Florida Department of Revenue (DOR). Like most registration processes, you can apply online. You will need to create an account in order to apply. You will use this account to help determine your state tax registration requirements. The process includes prompts to help guide you through the process.
5. Get Insured
Insurance is one of the most important parts of setting up your business. You will need general liability and business insurance, and additionally, it is a state requirement for workers’ compensation insurance in Florida. All of this coverage is to make sure that there is protection for you (the owner), the business, your employees, your investors/funders, and your customers.
Most businesses choose to get additional coverage beyond the standard state requirements. Each respective industry/niche has its own potential risks that need to be considered and insurance is one of the best ways to mitigate said risk. Be sure to meet with an insurance provider to assess risk and determine what the best coverage for your business is.
6. Open a Business Bank Account
It is pretty standard to open a separate bank account for your business. If you started out on Etsy selling your products, you may have been able to get away with using your personal bank account, but it simplifies things for taxes and billing to separate your business from your personal finances. This is only required for limited companies — but most banks offering specialized business bank accounts extend appealing and valuable perks for working with them.
7. Hire Employees
Some business owners may be able to operate on their own, but in most cases, this isn’t the case. It is a good idea to start advertising and interviewing far in advance of your projected opening date. Florida requires employers to report all new hires within 20 days of their employment start date to the Florida DOR. You can do this with the account you created during the registration process and there are new hire instructions to walk you through the process online.
8. Apply for Florida Business Licenses or Permits
Some businesses, but certainly not all, require business licenses or permits. This generally applies to skilled trades. You can file for the necessary licenses or permits on the Florida Department of Business & Professional Regulation (DBPR). Once you apply and get approved, you will also need to verify a license.
If you are unsure if your business needs to apply for licensure, you can find a list of business services in Florida that require a license on the DBPR site. There are links to each respective business that needs a DBPR license with insight into what each process looks like at the time.
9. Market Your Business
In order to be competitive in your space, you need to promote and market your business. Start by creating a catchy logo and establishing your website. You can outsource this work, but if you feel like you have the skills to do so, save some money and do it yourself.
One of the first steps you should take is establishing your Google My Business profile. This helps people locate your business website, address, and contact information all in one place.
Next, you want to take advantage of every avenue to get your brand out there. Get creative. This could include things like:
- Social media pages and paid ads;
- Press releases;
- Trade shows;
- Online communities;
- Passing out merchandise.
Starting a business is a complex, time-consuming process that requires ongoing, intentional efforts. Take your time and follow the above steps to help start a successful business in the state of Florida.