Starting a Small Business in Indiana
Starting a small business in Indiana isn't as difficult as you might think.3 min read
Starting a small business in Indiana isn't as difficult as you might think. Once you have a plan for your business, you will need to obtain a tax identification number and register your business with the state.
Developing a Business Plan
If you're interested in starting a small business, your first step should be writing a business plan, which will serve as a guide for getting your company up and running. In addition to helping you refine your ideas, your business plan is also needed for presenting to banks before they will grant you loans.
Your business plan should include a few important sections:
- Executive Summary: Although the executive summary is the last thing that you write, you should place it at the beginning of your business plan. Essentially, this section summarizes the overall plan and serves as a reference for potential investors.
- Business Overview: The business overview explains your company in detail, including why the good or service you plan to offer will be profitable. You should discuss the long-term goals of your company in this section. Don't leave out any details you think might be relevant.
- Management and Employees: This section will cover your business's daily operations. Some of the topics that you can cover include salaries, resources your company needs, and staffing. You will also need to describe your owner, including their experience in the field.
- Marketing: Every small business needs a strong marketing strategy. While this section isn't as important when it comes to securing a loan, you should make sure not to ignore this important component of starting your business. Some things to think about include who your primary customers are, how you will promote your business, and whether you have any competitors.
- Financial Projections: Finally, you need to develop a financial projection of your business. Think about how much money you will need to start your company, what your projected sales might be, and how much you need to earn to break even.
Choose Your Structure and Register Your Name
Picking your business entity type is the second step of starting your small business. Your business entity type can also be called the structure of your business, and it is how your company will be organized legally.
There are four basic business structures you can choose:
- Sole Proprietorships: This is when you own and operate a business yourself. You do not need to complete a filing in Indiana for a sole proprietorship, making this the easiest type of business to start. The drawback is that you will hold unlimited liability for your business debts.
- General Partnerships: These are businesses formed between two people or more. Like sole proprietorships, you do not need to complete a state filing, and partners will have unlimited liability. The actual partnership does not pay taxes. Losses and profits will be taxed on the partners' personal returns.
- Limited Liability Company (LLC): Owners of an LLC have protection from the liabilities of a business. These companies also do not need to observe corporate formalities. LLCs provide extreme flexibility in terms of management and taxes. Registering an LLC in Indiana will cost between $85 and $95.
- Corporations: The most complex business type. Corporations do provide liability protections but are much more difficult to form and manage. Traditional corporations are at risk for double taxation.
After choosing your business structure, you should register your business name. Filing is not required if you are running a general partnership or sole proprietorship under your legal name. If you have chosen one of these structures and want to use a fictional name, you need to file a Doing Business As (DBA) registration.
To register your DBA, you should stop by the County Recorder in the same county where your company will operate. The Recorder will give you the appropriate form. You may be able to download the form online, depending on your location. Before you complete registration, perform a search to see if your name is available. Once you've completed your application, file it in your county.
If you want to form an LLC or corporation, you will need to pick a unique name for your business when filing your formation documents. When forming an LLC, you will need to draft Articles of Organization and then file them with the Secretary of State. LLCs are also required to name a registered agent who will accept legal documents on the company's behalf.
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