Do you have what it takes to start a business and keep it going? There’s only one way to find out, and the journey starts here.
I’m thinking about starting a business, but I don’t know how. Where do I begin?
How ready are you, really?
So you’ve long dreamed about opening your own business, but what does that mean? What exactly is your dream and how will you pursue it? Now is the time to determine your readiness for business ownership by answering these questions:
- Why do I want to start a business?
- What makes me think I can succeed in a business of my own?
- What kind of business will this be — retail, service, manufacturing?
- Will it be a brick-and-mortar operation or strictly online?
- Will I operate from home, a storefront or office space I rent?
- Will my customers come to me or will I go to them?
- Do I have the skill/talent/experience to run this business, and if not, how will I acquire it?
- Will I hire employees or go it alone?
- How will I pay for this?
- Where can I find help to get started and, later, to expand?
Register your business name online.
Registrations must be renewed every five years and re-registered if ownership of the name changes.
Your Business Plan
An effective business plan describes the nature of your business, how you plan to achieve specific goals for this business and the profits you expect to gain as a result. Typically, it consists of the following elements:
Executive Summary Highlight key strengths of your plan, including where you want to take your company and why your idea will be successful.
Company Description Make this your extended “elevator pitch” to help readers, especially potential investors, quickly grasp the uniqueness of your business.
Market Analysis Show that you understand your industry, target market, customers, competitors and pricing structure.
Organization and Management Describe your company’s organizational structure; introduce ownership and members of your management team.
Service or Product Line Emphasize the benefits you can provide to current and potential customers.
Marketing and Sales Explain how you plan to promote your product/service, create customers and boost sales.
Funding Request Lay out your current and future funding requirements, the intended use of any funds you may receive and types of funding you would prefer.
Financial Projections Summarize your projected income and expenses, past credit history, intended allocation of resources and other financial details.
Appendix Include supporting information/documents: your credit history; letters of reference; resumes of key managers; leases; licenses, permits and/or patents; list of business consultants (attorney, accountant, etc.); relevant research, magazine articles or book references.
I know how to run my business.
Do I really need a written plan?
I’m getting ready to hire staff for the first time, and I want to be sure that I comply with the laws pertaining to new hires. What forms do I need to fill out and what should I do first?
Labor Law: The Basics
Employment eligibility verification is just one of many state and federal laws business owners must abide by. The list below summarizes several others with websites for additional information.
Federal Labor Laws
Federal Minimum Wage Requires employers nationwide to pay a minimum wage of $7.25 per hour and overtime pay of not less than one-and-one-half times the regular pay rate after 40 hours of work per week. (www.dol.gov)
Occupational Safety and Health Act Requires businesses to protect their workers from health and safety hazards on the job. (www.osha.gov)
The Americans with Disabilities Act Prohibits employment discrimination against qualified individuals with disabilities; requires public accommodations and commercial facilities to comply with specified accessibility standards. (www.ada.gov)
Family and Medical Leave Requires businesses employing 50 or more to give certain employees up to 12 weeks of unpaid, job-protected leave per year (26 weeks for qualifying military caregivers) while preserving their health benefits. (www.dol.gov/whd/fmla)
Equal Pay Act Prohibits wage discrimination between men and women performing substantially equal work within the same workplace. (www.eeoc.gov)
state Labor Laws
Florida Minimum Wage Requires employers in Florida to pay a minimum wage of $8.46 per hour; for tipped employees, the minimum wage is $5.44 per hour.
Workers’ Compensation Requires employers with four or more employees (full- or part-time) to carry workers’ compensation coverage for their employees; different requirements apply for construction and agriculture. (www.myfloridacfo.com/division/wc)
Child Labor Workers under age 18 cannot work in certain hazardous occupations, including excavation, electrical work, roofing and mining, or around explosives, toxic or radioactive substances or dangerous equipment. Additional occupations are banned for children ages 14-15. Minors cannot work during school hours without an exemption.
Background Checks Private citizens or companies may request a state-only criminal history record check of an individual through the Florida Department of Law Enforcement website for a fee of $24 per case.
Know Your Tax Liability
Big or small, every new business must pay state and federal taxes.
Corporate Income Tax Corporations and limited liability companies classified as corporations are subject to a 5.5% corporate income tax and must file a return annually (Form F-1120) even if no tax is due. Limited liability companies classified as partnerships must file a Florida Partnership Information Return (Form F-1065) if they are doing business in Florida and one or more owners is a corporation. Also required to file: the corporate owner of an LLC that is classified as a partnership for Florida and federal income tax purposes. S-corporations usually do not have to file a Florida corporate income tax return unless there is federal taxable income.
Reemployment Tax Floridians who paid at least $1,500 in wages within a calendar quarter, have employed one person for any portion of a day in 20 different weeks during the calendar year or are liable for federal unemployment tax must pay reemployment tax quarterly using Form RT-6.
Sales and Use Tax Businesses engaged in taxable transactions must register using Form DR-1 or at the Florida Department of Revenue’s e-file site. Businesses having $1,000 or less per year to report may file quarterly; $500 or less, semiannually; $100 or less, annually using Form DR-15.
Use Tax on Out-of-State Purchases When out-of-state sellers fail to collect Florida sales tax, buyers must make the payment on their own using Form DR-15MO. Applies to items purchased out of state from internet sites, mail order catalogs, auctions, shopping networks or toll-free shopping services, and to items physically purchased out of state when the merchandise is shipped to a Florida address.
Tangible Personal Property Tax An annual tax on personal property used for commercial purposes that is not included in the assessed value of the real property, excluding business inventory and state-registered vehicles; paid on Form DR-405 to the county property appraiser. All new businesses must file their first year; no additional filing is required thereafter if the amount of tangible property is less than $25,000.
Personal Income Tax For sole proprietorships and partnerships, profits and losses from the business are typically passed through to the owners and reported on their individual income tax returns. Beginning in 2018, some small business owners may be eligible for a 20% pass-through deduction. Officially known as the Section 199A deduction, this provision allows qualified small business owners to deduct up to 20% of business income from their personal income taxes. The requirements to qualify for this deduction are quite specific. Consult the IRS or a tax professional to determine if you are eligible.
Self-Employment Tax All net profits derived from doing business as either a sole proprietorship or partnership with no employees are subject to federal self-employment tax, which is equivalent to the Medicare and Social Security taxes employers withhold from their employees’ paychecks.
I know I’ll need some money just to get up and running, but for what exactly, and how much should I allot?