Starting a Small Business Copyright © 2019
Dr. Neal W. Vickers, PCED
Director of Economic Development – City of Trumann, AR
- Determine the business
- What type of business will you start?
- What need does it satisfy?
- What problem does it solve?
- What will the goods and/or services be it provides?
- Who will be your target market? See section 6.
- Who will be your competitors?
- What trends/issues are facing the industry?
- What opportunities exist in the industry?
- What will be your typical products, goods, or services?
- How much will they cost?
- How much will your markup be to your customers?
- Will it require a brick & mortar location? Where?
- How many staff will it require?
- How much power and utilities will it require?
- Will it require warehousing?
- Will it require a shipping/receiving dock?
- Will it be retail or wholesale?
- AR DFA Starting a New Business guide
- Frequently Asked Questions – with answers
- Arkansas Secretary of State Business Startup Wizard
- What will the NAISC Code be for the business?
- This code will determine your business operating and taxable category
- What is your business plan?
- Sample Plan
- How will you secure funding for the start-up costs?
- Conventional loan
- SBA Loan
- Private investor(s)
- Corporate financing
- Collateral – what are you willing to pledge to get a loan?
- What is your budget projection?
- How much money are you willing to contribute to starting costs?
- How do you plan to cover shortfalls?
- Do you have 3 months to 12 months funding to operate on until the business becomes profitable (working capital)?
- How much will be your rent or building payment?
- How much will inventory, supplies, furniture/fixtures cost?
- What do you expect to be your monthly sales?
- What do you expect to be your monthly expenditures?
- Who will be your customers?
- How do you plan to sell to your customers?
- How do you plan to market to your customers and what will be your advertising budget?
- What is your plan to protect the business (insurance)?
- How will you insure the business?
- How will you insure yourself?
- How will you insure for loss of income in the event you are disabled or unable to work for an extended period (worker’s compensation – http://www.awcc.state.ar.us/employerbasicfacts.html; or Social Security Disability)?
- Will your business be a sole proprietorship, corporation, partnership, or limited liability company (legal classification)?
- Requirements to be an S (Simple) Corporation, Limited Liability Company (LLC), or Partnership:
- Franchise Tax (Provides Certificate of Good Standing – VERY IMPORTANT for getting lines of credit with vendors)
- Articles of Incorporation or Organization with the state of Arkansas (AR Secretary of State’s Office)
- Annual Board Meetings
- Will you issue Stock? (or not if LLC)
- IRS & State election as an S Corporation
- Regardless of your business designation, ALL MUST:
- Acquire a Federal EIN & State EIN
- Acquire a Local Business Permits/Licenses (business license, signage permit, building permit(s), alcohol & tobacco permit, health permit)
- Withhold Tax (FICA [Social Security], Medicare, State & Federal Income Tax)
- You MAY BE REQUIRED to do the following based on the number of employees at your company:
- Register with Arkansas Workforce to pay Unemployment Insurance (UI)
- Purchase Worker’s Compensation Insurance (through a good business insurance company)
- You MAY BE REQUIRED to do the following based on your company’s type and sales:
- Sales Tax (collection and remittance to the state – if you sell retail or online) (To get a permit go to: https://atap.arkansas.gov/_/#8)
- Personal Property Tax (filed in Arkansas through your county assessor)
- Inventory Tax (if you have physical inventory, filed through your county assessor)
- Real Estate Tax (unless you rent or lease space, filed through your county assessor)
- Individual and Corporate Income Tax (suggestion – use a good accountant or tax firm that specializes in business taxes)
- Motor Fuel Tax (if applicable)
- Misc. Taxes (if applicable)
- ASBTDC License, Permit, & Tax Requirements for Arkansas Small Businesses (eBook)
- Tax Credits and Economic Development Incentives
- Check with your local ED or chamber office for state and local incentives and tax credit programs
- Opening Your Business
- Choose a city and location
- Get all licenses, permits, and certificate of occupancy (if applicable)
- If brick and mortar, prepare the building/facility; add stock
- Join your local chamber of commerce, schedule ribbon cutting and grand opening