You’ve done your research and decided to start a new business in Indiana! You definitely made the right choice here. Did you know that there are 534,640 small businesses in the state of Indiana right now? That is 99.4 percent of all Indiana businesses! In making your business move, you are helping to move the economy of Indiana onward and upward! Here are some steps to start a small business in Indiana.
Starting a Small Business in Indiana
As mentioned above, Indiana is a great state and a great choice for your small business. You will be saving from a financial standpoint as Indiana has lower taxes, affordable real estate, great communities for you and your employees, and now you will all be part of a wonderful workforce. Here are some suggestions to get you started.
Choose a business idea and put together an initial business plan. To get started, you’ll need to know what type of business you want to start. Think about the outlook of your potential industry. Then create an initial business plan to help drive your decision-making. It can be simple! And it is handy to have prepared if you’ll seek a bank loan.
What will your legal structure be? Your business structure depends on whether you’ll be the sole owner, whether you are okay with your personal property being more vulnerable, if you have a business partner, etc. The basic types of business structures are sole proprietorship, partnership, limited liability company (LLC), and corporation. There are also limited partnerships and S corporations to look into. It is relatively easy to start an LLC, which is common for business start-ups. Here are some more details to consider.
- Sole proprietorship: you do not need to file any documents with the state.
- Partnership: it is not required to file any documents with the state, but for your own benefit, you should have written documentation and agreements with your business partner.
- LLC: you must file an Article of Organization with the Indiana Secretary of State. You will need to appoint a registered agent for service of process who will be the contact on file with the state. It is recommended to create an operating agreement that establishes all of your rules and regulations, even though this portion need not be filed with the state.
- Corporation: you must file an Article of Incorporation with the Indiana SOS. You will need to appoint a registered agent for service of process. Consider creating and preparing bylaws even though it is not filed or required by the state. S Corporations must also file IRS Form 2553.
Pick a business name. If you opt for an LLC or corporation, then you need to make sure no one else has your business’ name on file already via the Indiana Secretary of State’s website. You ca reserve your name for up to 120 days by filing a reservation application. An LLC needs to be included in the name if your business is an LLC, and “Company” needs to be included in the name if your business structure is a corporation. It is a good practice to do some internet searching to ensure your business name is unique even if you have a sole proprietorship or partnership.
If your business is a sole proprietorship or partnership and the name of your business is different from your legal name, then you’ll need to file an assumed business name (“doing business as” or dba) with the county recorder in the county in which you are doing business.
Take a moment to consider your future website address, as well, if you’ll have an online presence. Double-check if your domain name is already in use or not. While you are registering for a domain name, do a trademark check on the state and federal levels to avoid any issues down the road.
Apply for licenses and permits. If you are selling goods in the state of Indiana, then you will need to register with the Department of Revenue (DOR) to collect sales tax. If you have employees, you must also register for employee withholding tax. You will also need to go to the IRS website to obtain your EIN number (Employer Identification Number).
Pick a business location and know your zoning laws. Do your zoning laws research before you pick a location for your business in Indiana. Each local area might have different zoning regulations that your business will need to adhere to before you open your doors. Checking with local ordinances first will help avoid headaches for you down the line.
Be prepared to file taxes. The state of Indiana will tax any kind of business. Please keep this in mind before choosing your business entity, and also see Indiana State Business Income Tax for more information on this matter. It might even benefit you to hire an accountant to assist you come tax time!
Obtain Insurance. Do not skip this step! Business insurance, including general liability insurance coverage in Indiana and more depending on your business, can save you big headaches if you find your business facing a claim.
Open a business bank account. Keep your personal bank account separate from your business bank account. Entangling the two could lead to catastrophic results. Plus, concerning business loans, banks and lenders will take your small business more seriously, seeing it separated.
Get the word out there. Your community might not even know about your new business until you market yourself! Research who the members of your business’s community are and what are the best ways to reach them. Is it easier to print and set up flyers at the local grocery stores? Set up ads in the newspaper? Or is it better for you to advertise yourself online? Consider creating social media pages for your small business. Not only is it free, but you can use it to get the word out to large members of the community quickly.
Indiana is friendly to small businesses and makes it easier than some other states. We wish you luck and success as you navigate starting your own business in Indiana.