How to start a business in Tennessee or Alabama
Whether you dream of working for yourself or building a lasting legacy for your family, starting your own business is a major decision involving important financial planning and legal decisions. In this article, we’ll take you through 11 steps to start a business in Tennessee or Alabama.
To get started on the road the owning your own business, read carefully through all the steps, from outlining your business plan and registering the name, to filing with the state and paying taxes.
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11 Steps to start a business in Tennessee or Alabama:
1. Write the Business Plan:
As a business owner, your Business Plan is one of the most important documents you’ll need to start your business. In it, you’l define the problem and describe your solution in a formal document. Click the button below for more information and a free Business Plan template from our Business Center.
2. Do your market research
Honestly answer this question: “How many people need or want the solution I am planning to offer with my new business?” Can you demonstrate a demand for what you’re offering? Review your competition and see if anyone else is offering the same solution to the same market. If you do have direct competition, explain what makes your solution stand out.
The SBA offers great guidance on conducting market analysis.
3. Create Financial Projections
Solid financial projections are invaluable to any new business, especially if you plan on seeking investors or applying for a loan. What price are people are willing to spend on your product or service? How many people will be willing to purchase at this price? What will be your expenses to deliver the product or service? Check out our free helpful financial templates for your business:
4. Determine a legal structure
Generally speaking, your business will fall into one of these categories: Nonprofit, Sole-Proprietorship, Partnership, Limited Liability Company, C-Corp, S-Corp. It may be difficult to decide which legal structure is a best fit for you, but this could have long-term impacts on your business. Read our blog post about the 4 most common business structure options, or head over to the IRS website for more detailed information on which business structure might be right for you. You will need your attorney’s assistance in selecting the best legal structure for your new business.
5. Choose a business name and register with the state and local governments
Pick a unique name that best expresses your solution and is easy to remember (get other great tips on naming your business here from the SBA), and then register that name with the Secretary of State for the state your business will be operating in:
After you register with the State, you must also register with the city and/or county where your business is located:
6. Obtain licenses, permits and tax numbers
After you register, make sure you are properly licensed and possess the necessary permits to operate legally BEFORE you open your business!
7. Secure Funding
Once you know your expenses and potential revenue, determine how much money you will need up front and for ongoing operations to ensure liquidity in your business. Pathway Lending is a great partner for your business – we offer in-depth coaching and ongoing education, in addition to loans. Have questions? Here are some great resources for when you are ready to fund your business:
8. Get insurance for your new business
You may need multiple levels of insurance including physical property, general liability, worker’s compensation for employees, and vehicle insurance if applicable.
9. Learn your responsibilities as an employer & hire employees
Once you’re established, if you plan to hire employees, make sure you understand your state’s labor laws and insurance requirements as well as wage laws and payroll tax information. Check out the SBA’s website for a full list of employer responsibilities before you hire your first employee:
10. Get certified to obtain government contracts
The Federal Government is the world’s biggest customer, and a big supporter of small businesses. In order to secure federal contracts, you need to be on their list. There are actually several lists that you can get on, each has its own process to work through. In addition to the Federal Government, your State, local municipality and even private companies may have lists you can join. Just a few examples are Women owned small businesses, 8a Certification, and local airports.
11. Start marketing and networking to grow sales
Now it’s time to work less in your business doing the work you hired your employees to do, and start spending more time working on your business by growing your sales. Below is a guide for creating a marketing plan, it’s time to grow your network!
Ready to start your own business?
Now you have all the information to open your own business. If you want additional guidance, here are some partner resources available to help you along the way:
For Tennessee business owners, you can download the TN Smart Start Guide here, or pick one up from our office. We also offer classes, events, and mentoring through our educational office, Pathway WBC.