The Kauffman Foundation recently rated Minnesota as the 5th-fastest rate of startup growth. This makes the state a perfect place to start your first, second, or even third business!
Whether its Minnesota or Los Angeles, or any other state, the process of starting a business is always a little confusing and sometimes overwhelming for a layman. If you’re not versed in proper business education but still have a great idea you want to bring to life in Minnesota, then you can follow our step by step guide to start your business legally in Minnesota. We have collected the best data and legal advice from Incfile vs LegalZoom to help you get started.
Step 1 – Come up with a Business Idea
The first step in starting a business is coming up with the right kind of idea. A business idea should always synergize with your interest and personality for your business to become a success. Outline your personal goals and natural abilities and see if they fit in with the idea. If you turn your passion into a business, there is no force going to stop you from being successful. This is why the right idea matters so much.
Step 2 – Start Planning Your Business
You can only hope to survive in business if you have a good plan outlined. In fact, big businesses are built through careful planning. At the very least, you should plan the following for your business.
- Product development
- Sales and marketing
- Partnerships and people
- Financial planning
Step 3 – Register Your Business
Registering your business in Minnesota will get you two major advantages. One, your business will have increased credibility, two, it will have protection from personal liability in case your business gets sued. If you’re starting a small business, you should ideally register it as an LLC.
Step 4 – Get Registered for Taxes
Most businesses in Minnesota require a Federal EIN to operate. An EIN is also commonly known as a Tax ID Number. This number is given to a business to help identify it in the federal tax filings. Without this number, you will never be able to hire employees or open a business account. You should also be aware of what kind of taxes apply to your business. For example, if you are selling products, you will need to register for the Minnesota Sales Tax.
Step 5 – Have a Bank Account Opened in Your Business Name
If you want to protect your personal assets, then go out and open a dedicated business bank account as well as a credit account. If your personal and business account is mixed, your personal assets may become under risk if your business is sued. So make sure to keep your personal assets separate from your business assets.
Step 6 – Get an Accounting System for Your Business
If you want to track the performance of your business, it is a good idea to have an accounting system placed in your business. A good accounting software actually lets you download all your credit card and bank transactions which makes it easy for you to track where the money is going to and coming from.
Step 7 – Obtain the Necessary Permits and Licenses to Operate
Certain businesses will require licenses and permits in order to operate. For example, if you are a pest control business, you must have a pest control license. Find out which authority gives a license to your business and get them as soon as possible.
Step 8 – Seek Insurance
Insurance is very important if you want to keep your risks minimized. In events where your business may be hurt, insurance can be very important. As a small business, you should at least have a general liability policy in place.
Step 9 – Come up with a Solid Brand
If you want to create a lasting image of your business, then come up with a good brand. Your brand is your identity which allows people to instantly recognize you no matter what you are selling or offering.
Step 10 – Take Your Business on the Internet
In 2019, a business, whether small or big, cannot survive or hope to grow bigger without a good web presence. Get a very professional website developed for your business and have your social media pages made where you can interact with your customers or clients directly.
By following these basic 10 step guide, you can easily start a business legally in Minnesota.