What Is South Dakota Business Name Registration?
Before you complete a South Dakota business name registration, you should first follow the most important steps for starting up a business.3 min read
Before you complete a South Dakota business name registration, you should first follow the most important steps for starting up a business. The first and most important step involves writing a business plan. Many individuals don't bother with writing one unless they want to apply for a bank loan.
A business plan, however, puts a business idea on paper and helps entrepreneurs create roadmaps of where they want their business to go. It is thus intrinsic to creating a successful business. Although there isn't a universal formula for writing one, each business plan should contain the following sections:
The first section must include a high-level overview or summary of the business plan. Although executive summaries are placed at the beginning of the document, they are usually written last. This section is intended to give an investor a quick insight into the business and what the owner aims to accomplish.
The second section should inform readers of the product/service the business is selling, and the reasons for offering that particular product/service. You should provide all relevant details since the plan will be reviewed by a business committee. This section must be easy to understand, focused, and clearly show that the business fulfills a need.
Management and Employees
In this section, you will detail the staffing needs, day-to-day operations, salaries, and other relevant information. You should also discuss your experience here since it will impact significantly on your loan application.
Although this section isn't all that important to the lending institution, it is critical to the success of the business. You must develop a marketing strategy that shows how best to advertise your product offerings to your target audience, in order to grow your client base rapidly and effectively. Your marketing plan should answer the following questions:
- Who is your target audience?
- Are there common demographic characteristics such as income, gender, age, interests, hobbies, etc.?
- How will you go about promoting the business?
- Who are the business' competitors?
- What advantage does your business have over other competitors?
This is the part that investors and lenders analyze the most. It is also important to business owners since it evaluates the potential of the business idea to make a profit. The financial projection must include
- The business startup costs
- Sales projections
- Financial statements (balance sheet, profit and loss statement, cash flow projections)
- Break-even analysis
Choosing a Business Structure
The second step of the business plan involves selecting a business structure. Also called a business entity, a business structure outlines the legal organization of a company. The four major business structures include LLCs, corporations, partnerships, and sole proprietorship.
For individual entrepreneurs, a sole proprietorship is the best business structure, as it is the least expensive and easiest setup. However, owners are exposed to unlimited liability. This means that if creditors sue the business, the personal assets of the owner is at risk. In South Dakota, entrepreneurs do not need to file for sole proprietorships.
This form of business structure is one where two or more individuals come together for the purposes of conducting business. This business structure is similar to a sole proprietorship, as there is no need to submit a formal filing and the personal assets of the owners can be used to settle business debts.
Corporations are legal entities that exist independently of the individual. Although corporations are more complicated and expensive to form, they protect the personal assets of owners from business liabilities.
Limited liability companies are the most popular business structure because they combine the benefits of a sole proprietorship and a corporation. Just like a sole proprietorship, an LLC is easy to operate and doesn't come with most of the corporate burdens attached to corporations.
Registering the Business Name
The state of South Dakota requires businesses to have unique names that are distinct from other business names that have been reserved or registered with the Secretary of State. Aside from this requirement, corporate businesses in South Dakota must contain the following designations: corporation, co., corp., inc., company, limited, incorporated, ltd, and LLC.
Also, in South Dakota, certain phrases and words are considered restricted and require special approval before they can be used.
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