Known for basketball, corn, and its business-friendly laws, Indiana is a great state to start a new business. This is thanks to their significant asset protection laws that favor business owners. However, starting a business can be daunting, so if you’re unsure where to start, this article is for you!
In this article, you will find a detailed step-by-step guide on how to start your business in Indiana from scratch, covering everything from choosing your idea to marketing your business.
Step 1: Choose Your Idea
The first step in starting a business in Indiana is to develop an idea. This idea forms the basis of your business and doesn’t need to be very planned out at this stage. Here are some questions you can answer to help formulate a good business idea and see if the idea will work as a business:
- What hobbies or passions do I have?
- Can these hobbies be turned into a profitable business?
- Can I see myself enjoying the work or running the business every day?
- Is there a gap in the market for my business?
- What problem does my business solve for consumers?
- Are there any businesses like mine already?
- What makes my business unique?
Answering these questions should get some ideas forming; you can play around with ideas until you are happy with your decision. You can even ask your friends and family to help answer the above questions.
Step 2: Pick a Name
Your business name is the most crucial decision you will make in the early planning stage of starting a business. Your business name is the first thing potential customers will see and hear. Their first impressions of your business will be based on your name.
Therefore, when choosing a name for the business, you should keep several things in mind. For example, your chosen name should be easy for people to read and pronounce, stand out (but not too much!), and be relevant to the industry and your business.
The state of Indiana also states that businesses cannot use names that have already been registered with the Secretary of State. To ensure that you are not using a name that has already been registered, you can check out the Indiana business search online tool.
If you are having trouble coming up with a name, try out these helpful tips:
- Use an online name generator.
- Hold a brainstorming session with your friends and family.
- Create a word dump.
Step 3: Write Your Business Plan
Once you have decided on your business idea and the name, you’ll need to flesh out your business idea. The business plan will contain all your research, planning, and financial goals for your business.
A good business plan should answer the following questions:
- Why have you started the business?
- What products or services are you offering?
- Who is your target audience?
- How do you plan on converting your target audience into paying customers?
- Who are your local competitors?
- How do you plan on standing out?
- How much do you need to break even?
- How much are your startup costs?
- What roles will there be in the business?
- Will you need to hire employees?
- What are your financial goals and predictions?
Your business plan can also be used as a marketing tool to attract potential investors to your business, which is why it is important to be as thorough and thought-out as possible.
Step 4: Get Funding
Starting a business will require capital; unless you can fund this money yourself through personal savings or your current income, you will have to get funding another way. Luckily, there are three different ways of going about this in Indiana. What route you take will mostly depend on what is available to you.
Many business owners aim to get grants to get their business up and running because, unlike a loan, you do not need to pay this money back to the state. While the state of Indiana doesn’t offer many grant programs, its affiliate partner, U.S Small Business Administration, offers several different grant programs. You can check the details to see if your business is eligible for assistance.
Grants usually come with many different rules and requirements that businesses must meet, so if you do not qualify for a grant, your next best option is to get a loan. The U.S Small Business Administration offers several loan programs that you might be interested in. You can also get a loan from your bank. When taking out a loan, be mindful of the interest rate that you are signing on for.
Another way of getting funding for your business is to get investors: think Shark Tank. Investors generally invest some money into the business for a percentage of the company. You could even ask your friends and family if they would be interested in investing in your business.
Step 5: Choose a Business Structure
Choosing the proper business structure for your business model is crucial for the success of your business. Here are the four different business structures available in Indiana you can choose from:
The sole proprietorship is the simplest business structure and is a great option for low-risk businesses. This business structure only has one owner, and there is no separation between the business and the owner’s assets. Although you don’t get the liability protection a formal company would get, this is still a great, easy option for those wanting to operate a smaller one-person company.
A partnership is similar to a sole proprietorship in that it is an informal business structure with no separation between business and personal assets. The only difference between the two is that a partnership has more than one owner, each with equal shares of the business.
Limited Liability Company
A limited liability company, better known as an LLC, is one of the most commonly used business structures for small businesses. This is because it offers the simplicity and ease of a sole proprietorship or partnership with the liability protection of a corporation.
C or S Corporation
As the most formal business structure available, a corporation is a more popular pick for larger companies with multiple shareholders. This business structure has many tax benefits that make it an attractive choice. A corporation is an entirely separate entity from the owners.
Step 6: Registering a Business
Once you have chosen the business structure, you may need to register it with the state.
In Indiana, you do not need to register your business with the Secretary of State to do business. But you will have to register your business with the Indiana Department of Revenue if you are collecting sales tax.
If you wish to operate under a name other than your full name, you must also file an assumed name with the Indiana Secretary of State. Use this link to find the form and follow the instructions to file the form online.
Like a sole proprietorship, you do not need to register with the state of Indiana. However, you must register with the Indiana Department of Revenue for tax purposes.
Once again, if you wish to operate under a different name, you must file an assumed name with the state. As a top tip, it is also a good idea to have all owners sign a partnership agreement. This does not need to be submitted to the state, but it will definitely come in handy.
Limited Liability Company
C or S Corporation
To register a corporation in Indiana, you must complete and file the forms, known as the Articles of Incorporation, with the Secretary of State, which you can file online for $100.
Step 7: Set Up Your Finances & Accounting
Setting up your business’s finances and accounting before you begin trading is strongly recommended. You will need to open a business bank account, apply for a company credit card, and choose a payment method for customers to use.
Additionally, good payroll software is key to managing salaries and taxes efficiently if you have employees. Hiring an accountant to assist you with your business’s books is a good idea, especially if you’re new to the business world. You’ll be thankful for the extra help, especially as tax season rolls around!
Step 8: Get Business Insurance
Indiana does not require companies to obtain business insurance before opening. But, operating a business without insurance is risky, especially for a first-time business owner. While there are a lot of different insurance policies to choose from, it is highly recommended that you at least have a general liability insurance policy.
This broad insurance policy provides enough cover for the day-to-day running of a business as well as injury or damage to the workplace.
If you’re interested in learning more about what type of insurance you should get for your particular needs, chat with your local insurance broker.
Step 9: Obtain Any Permits or Licenses Needed
Indiana does not require a general business license for companies registered with the state. Instead, their business licenses are issued depending on different business structures and each city’s requirements. You can see what license you might need by visiting the Indiana business guide website.
Businesses selling taxable goods or services must register with the Indiana Department of Revenue for a seller’s permit. However, if you had done this during step 6, you would have been issued this already.
Step 10: Build a Website
Building a website is an absolute necessity today, as this is where most potential customers will get information regarding your business.
When building a website for your business, there are some things you need to keep in mind:
- Check if your desired domain name is still available.
- Your business name should be bold and easily visible to viewers.
- Keep all fonts neat and easy to read.
- Avoid overloading the page with images and GIFs. This can result in slower loading times, especially on phones.
- Make sure your website is mobile-compatible, as most people access the internet through smartphones.
- Link the website to other social media accounts.
- Include a call to action button.
Step 11: Hire Employees (If Any)
If you are planning on hiring employees to assist you in running the business, you are legally required to report any new hires to the Indiana New Hire Reporting Center. This needs to be done within 20 days of the hire date, and there is no cost to report new hires.
Step 12: Market Your Business
The final step in starting a business in Indiana is to market your business. Marketing your business is so easy nowadays, especially with the Internet at your disposal!
Here are some ways to market your business successfully:
- Advertise on your business website
- Create a Google business profile and advertise there
- Advertise and engage with customers on social media
- Hold events
- Attend local networking events
- Run promos or giveaways
There are many ways to market your business to meet any budget!