Starting a business is an excellent idea whether you have an entrepreneurial spirit or want to expand on a dream. New Mexico is a great place to start a business as it is affordable with one of the lowest corporate tax rates. But if you’ve never started a business, you may wonder how to get started.
This guide will walk you through each step, from choosing the right business idea to marketing your new business. With this guide, you will know everything you need to start a successful business in New Mexico.
Step 1: Choose Your Idea
The first step in starting a business in New Mexico is choosing a good business idea. This idea will be the foundation of your business, and your entire company will be built on this idea. At this point in the planning process, your idea does not need to be overly thought-out.
To come up with a good business idea, try answering these questions that are specially formulated to help you choose your business idea:
- Do you have any passions, skills, interests, or hobbies?
- Can any of the above activities be turned into a profitable business?
- Can you see yourself working in the industry every day and enjoying it?
- Are there any businesses like yours that already exist?
- Is there a need for your business?
- How is your business solving a consumer’s problem?
These questions should steer you in the right direction and towards a good, working business idea.
Step 2: Pick a Name
Picking a name for your business is both fun and daunting. The name you choose will play a big role in potential customers’ first impressions of your business. This is why you want to choose a name that is easy for people to read and pronounce. Your name should also stand out from other competing businesses.
In New Mexico, you cannot register a business with a name already used with another company. To check if your name is still available, you can check on the New Mexico Secretary of State’s Corporation & Business Entity Search.
Coming up with a unique name can take time due to the competition and the number of already-existing businesses in New Mexico, but it can be done. If you are struggling to come up with a name, try out some of these helpful methods below:
- Create a word dump. List any words that pop into your head when you think about your business. The key is not to overthink it and just write words down.
- Use an online name generator.
- Brainstorm with friends and family.
- Create a poll on your Facebook page.
Step 3: Write Your Business Plan
Now comes the hard work. Once you have decided on a business idea and what to call your business, you will need to write your business plan. Business plans are not a requirement for companies based in New Mexico, but they come in handy.
The business plan will have all of your research and planning. It will act as a guide to your business. Along with the planning, you will need to include information on your products, how you plan on running the company, and any relevant financial details.
You will want your business plan to be as comprehensive as possible because the plan can also be used as a great marketing tool to attract inventors to your business.
While there are no set rules about what needs to be included in your business plan, here are some questions that should be answered in your business plan:
- What is the purpose of your business?
- Why have you started the business?
- What products or services does your business offer?
- Who are your direct competitors?
- Who is your target audience?
- How do you plan on turning your target audience into paying customers? Talk about your marketing techniques.
- How much will you need to start the business?
- Will you need funding?
- How much will you need to make to break even?
- What equipment is needed?
- What type of employees will you need?
- What are your financial goals and predictions?
There are plenty of ready-to-download business plan templates on the internet that you can use.
Step 4: Get Funding
Starting a business can be costly, especially if you need equipment and the initial stock. You need to get money elsewhere if you cannot fund these items yourself. There are several ways to do this in New Mexico, such as a grant, loan, or investor.
The State of New Mexico has several different grant and loan programs available for businesses in the state. You can find more information about these funding programs on the Finance New Mexico website, a government affiliate program. If you do not qualify for any of the government-funded grants or loans, you can also apply for a loan from a private source – like your local bank.
An investor is the third and final method of getting funding for your business. Most investors are happy to invest some capital in your business in exchange for some shares.
Step 5: Choose a Business Structure
The next step is to choose the proper business structure for your business. This is important as each structure has its own benefits. Here are the business structures you can choose from in New Mexico :
Sole Proprietorship
The sole proprietorship business structure is a business with only one owner, and there is no separation between the owner’s and the business’s assets. This business structure is commonly used for low-risk businesses like freelancers.
Partnership
A partnership is also an informal business structure similar to a sole proprietorship, as there is no separation between the owner’s assets and the business. The only difference between the two business structures is that there is more than one owner in a partnership. All owners have equal shares in the company.
Limited Liability Company
A limited liability company, or an LLC, is most commonly used for small to medium-sized businesses. An LLC is an excellent choice because it combines two business structures, offering the best of both worlds. It has the flexibility and ease of a sole proprietorship or partnership with the added liability protection of a corporation.
C or S Corporation
A C or S corporation is the most formal business structure you can choose and is used mainly by large companies with multiple shareholders. This is because a corporation is an entirely separate entity from the owners. This business structure is popular with large companies because it offers tax benefits.
Step 6: Register Your Business
Depending on your chosen business structure, you may be required to register it to remain compliant with the state of New Mexico.
Sole Proprietorship
This business structure does not need to be registered with the New Mexico government to do business. And if you wish to operate under a different name from your personal legal one, you will not have to file this with the state either. However, you may want to file your business name as a trademark. Simply choose your name and start trading! Simple as that.
Partnership
Similar to a sole proprietorship, for a partnership, no formal paperwork must be submitted to the state to start trading in New Mexico.
Limited Liability Company
To register your LLC in New Mexico, you must complete and submit the Articles of Organization. These will must be submitted to the New Mexico Secretary of State. The fee to submit this document online is $50.
C or S Corporation
Registering a corporation is very similar to an LLC. You must complete and submit the Articles of Incorporation to the New Mexico Secretary of State. The fee to submit these documents online is $100 for the first 100,000 shares. The fee then increases by $1 per every 1,000 shares.
The maximum that you could end up paying is $1,000.
Step 7: Set Up Your Finances & Accounting
It is a good idea to set up your finances and accounting before you begin doing business.
To set up your finances, you need to open a bank account for the business, apply for a company credit card, and set up a payment method for customers to use. If you have employees, you will also want to install a payroll system for managing employee salaries and taxes.
If this is your first time doing this, consider hiring an accountant to assist you with this aspect of the business. You will especially be thankful for the help when tax season rolls around.
Step 8: Get Business Insurance
Every business must have insurance. You never know when something could happen and want to be protected against any worst-case scenarios. While there are many different insurance policies to choose from, you should at least get general liability insurance policy. This broad policy will cover the day-to-day running of the business.
Here are some other insurance policies that you can have:
- Commercial auto insurance
- Commercial property insurance
- Workers compensation insurance
- Limited liability company insurance
- Business owner’s insurance
Speak to your local insurance broker for professional advice on what kind of insurance best suits your business needs.
Step 9: Obtain Any Licenses or Permits Needed
The state of New Mexico does not issue a state-wide general business license, but you will need a New Mexico Business Tax Identification Number. You can apply for this with the New Mexico Taxation and Revenue Department.
Every county and city within the state will have its own rules about who needs a license or permit – and it will depend on what kind of business you have. You can learn more about what you might need in the New Mexico Regulation and Licensing Department. Alternatively, you can ask your local clerk for advice.
Step 10: Build a Website
Having a website for your business is a must in today’s technology-driven world. Building your website is not as complicated as one might think. You can use a website builder where you simply input your information. Or you could pay someone to build the website for you.
When building your website, here are some tips to keep in mind:
- Your domain name should be available for use.
- All the fonts used are clear and easy to read.
- Your business name is easy to find and read.
- The website interface is simple and easy to understand.
- Avoid filling the web pages with unnecessary images and videos, as this will slow down the loading times.
- Ensure all information is correct and relevant.
- Provide contact details and link your website to your other social media accounts.
Step 11: Hire Employees (If Any)
If you need to hire employees, draft a job post, upload it on job searching websites, filter through applicants, and interview your favorite picks. Offer the job to the person best suited for the role.
You are legally obligated to report any new hires to the New Mexico New Hire Directory. You will need to report the new hires within 20 days of the hire date. There is no fee to do this.
Step 12: Market Your Business
The final step in starting your business in New Mexico is to market it. When marketing your business, try to remain consistent and ensure your content is relevant.
Here are some different ways to market your business:
- Advertise on your business website.
- Use social media like Facebook and Instagram to create interest.
- Make use of pay-per-click advertising.
- Advertise on Google with your business profile.
- Advertise in your local newspaper.
- Attend markets and expos.
- Attend networking events.
- Run competitions and giveaways.
You can also hire a marketing expert to take care of this aspect of the business for you.