Starting a business can be confusing and frustrating. The SBDC has counselors ready to help you through the process and each SBDC office is familiar with local resources you will need to work through each step. Below are some general considerations when starting a business in South Carolina. Remember, each business is unique so, your business may have additional requirements or it may be able to skip some of the items listed.
What to do before you invest valuable resources:
Create a plan and check the numbers – The initial stages of idea development may only require a two page business outline and a cash flow projection to determine if the idea has merit. Once you decide the venture is worthy of further development, you can determine what level of business planning is required. The SBDC has templates available and counselors ready to assist with this step of the process.
Choose a name for your business and determine if it is available for use – https://businessfilings.sc.gov/businessfiling
Determine your business entity (Limited Liability Company(LLC), S Corp, C Corp, etc.) SBDC counselors have several resources to help decide which entity might be best for your type of business. You may also want to consider consulting a lawyer and/or accountant for this step depending on your unique personal financial situation.
Once you decide the venture is worthy of investment:
Register name and entity with the state of South Carolina – Online: https://businessfilings.sc.gov/businessfiling – This can also be done in-person at the Secretary of State’s office in Columbia.
Obtain an Employer Identification Number (EIN) EVEN IF, you are not planning to have employees (Note: Make sure your business entity is finalized before obtaining your EIN. – IRS.gov (https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-EINs)
Open a business bank account using your business entity paperwork and your EIN number – Many banks offer specialized services for businesses. Think about what your business may need in the future when picking your bank. You may also want to consider having more than one business bank so you have more options when working the financial aspects of your business.
Register a domain name for your business and hold it until you are ready to build a website. The Columbia SBDC office is uniquely equipped to assist in this step, with internet savvy counselors available to help you prepare an online strategy and select the right tools. Contact our offices at 803-777-1020 for specialized web technology assistance.
Consider issues that impact your choice of business location:
Determine if there are any zoning requirements regarding the location you are considering (Even home based businesses should be sure it is legal to operate out of their home.) Online: Google the municipality your are considering followed by “zoning.” Example: “Columbia SC Zoning”
Obtain insight on your business community from your local Office of Economic Development – It is good to understand what the future plans for development are before you select a location. There may also be incentives for developing a business in designated areas so be sure to ask around. Economic Development offices may exist within municipalities, counties or regions depending on population density.
If you are buying or leasing a property, be sure to have all documents reviewed by a lawyer. You also need to check with local building and development agencies to be sure there are no outstanding issues with the property you are considering. Be aware that a commercial lease is NOTHING like a personal lease for say an apartment. You may be responsible for repairs, upgrades and other costly aspects of the building. Be prepared to negotiate the terms of the lease.
Licenses, taxes and insurance will be unique for each business. Consider how each of the following might apply to your business idea:
Apply for applicable business licenses (needed for each municipality you will be conducting on-site business) – Check with the municipal offices, economic development or local chamber of commerce to find more information specific to your target market.
Determine what insurance needs your business has (liability, errors & omissions, disability, key-person, property & casualty, healthcare, etc.) – Normally a phone call to your current insurance agent will get you started. You may have to use multiple agencies to obtain the needed coverage as not all companies carry all types of insurance.
Request a DUNS number to begin building a business credit record – Dun and Bradstreet http://www.dnb.com (No cost) – Business credit will come in handy as your business grows. Protect your credit rating for your business as you would your personal credit. You may also consider using Dun and Bradstreet as a source in determining if a client is worthy of extending credit terms. (Paid service)
Obtain a sales tax number if applicable to your type of business – http://www.sctax.org – Get this one right and follow the instructions perfectly. This can be an expensive and unforgiving error for your business if not handled correctly.
If you will have employees, determine how you will incorporate workers’ compensation – http://www.wcc.sc.gov/Pages/FAQ%20Index.aspx – There are many complexities involved with having employees. Workers’ compensation is a protection for the business as much as it is for the workers. It is recommended you have a professional human resources contact review your employment plans before you hire your first employee.
Have you run into a requirement or challenge we have not included? Email your comments to EarlG@sc.edu.