Adbongo’s “How to Start a Business” Guide

Congratulations! You have a brilliant idea for a business, and you’re ready to declare your independence from the boss. As a budding entrepreneur, you’re in for an adventure. We applaud you for your willingness to take a risk.

As you proceed down the entrepreneurial path, it’s a good idea to take a map with you. The Adbongo team has created the following guide to help you on your way to success.

Before starting a business, it’s important to put a good bit of time, research, and thought into your idea. Oftentimes, we see entrepreneurs who are so passionate about their ideas and confident regarding their level of experience in their chosen industries that they make crucial business decisions based on gut feeling or assumptions. Maybe they think they’ve found the perfect location as it’s beautiful and it seems to be in a high traffic area. However, they haven’t paid attention to the fact that they’ve only visited the neighborhood when they’re off work on the weekends. Therefore, they don’t realize that super busy Saturday street gets no traffic during the week. A few minutes of research would inform the future business owners of the real struggle other businesses in the neighborhood face due to the weekend-only traffic. Oftentimes, though, people assume they know best without stopping to ask a few key questions. We think passion, excitement and confidence are key ingredients in the success of a venture, but a little research to guide the passion is essential, too.

Over the last 10 years, we saw too many business owners jumping the gun without doing their homework. We highly encourage you to spend some time and energy in the preparation stage. We believe solid preparation before executing your idea makes everything run smoother and easier in the long run.

Just know Adbongo is here to help you with this homework. We can assist you with every step in the process.

Where to Start, Then?

Write your business plan. The business plan will take time and brain power, but it will help you think about and work through most of the research that needs to be done prior to starting your business. This plan will help you to create a sustainable, successful business. Also, if you plan to seek funding, you will usually be required to present a well-polished business plan to potential investors or loan officers.

The business plan helps you:

• Define your value proposition, or the unique value your business will offer to customers.
• Research your competition and define your competitive advantages.
• Identify any potential weak points in your idea, which will help you problem-solve for solutions.
• Research your location and the demographics of that area.
• Define all the products and services you will offer to customers.
• Consider your costs, budget and financial needs.
• Select your business structure:

1. Sole Proprietorship: Adbongo’s Information Guide on Sole Proprietorships

2. Partnership: Adbongo’s Information Guide on Partnerships

3. Corporation: Adbongo’s Information Guide on Corporation

4. Limited Liability Corporation: Adbongo guide in progress. In the meantime, see Findlaw’s checklist: How to Start a Limited Liability Corporation

• Define your business size.
• Create your marketing and advertising plan.

Once you’ve completed the business plan, then it’s time to execute.

• Research your business name to make sure it’s unique, and then consider trademarking your business name with state and federal authorities. Though it’s not required to trademark the name at either state or federal level, doing so protects you from having competitors use the same or deceptively similar names. Registering a state and/or federal trademark has advantages. It is relatively cheap and easy to register a state trademark: see Texas Secretary of State’s trademark FAQ for detailed information. In Texas, use Form 901 to register a trademark (costs $50 + 2.7% if you pay with credit card). Federal registration is more costly (between $275-$375), but it is worth considering because of its nationwide effect. See: United States Patent and Trademark Office website for details.
• Apply for an Employer Identification Number (EIN): Apply for EIN online
• The EIN is your federal tax identification number. Most businesses need them. If any of the following applies, then you need an EIN:

1. You have employees

2. Your business is a corporation or partnership

3. You file any of the following taxes: Employment, Excise, or Alcohol, Tobacco and Firearms

4. You withhold taxes on your income, other than wages, to pay to a non-resident aliens

5. You have a Keough plan (it’s a retirement plan for self-employed people and small businesses)

6. You are involved with one of the following types of businesses:

• nonprofit organization
• farmers’ cooperatives
• plan administrators
• real estate mortgage investment conduits
• trusts (except certain grantor-owned revocable trusts), IRAs, exempt organization business income tax returns

In addition to the requirement of obtaining an EIN, businesses in certain industries are required to apply for licenses and permits to do business. While a majority of businesses don’t have to register with the federal government (but do with state agencies), if your business falls into the following categories, you should consult with the governing federal agency to determine whether you need a license or permit:

• Agriculture — the U.S. Department of Agriculture issues permits for business involved in the importation and interstate transportation of animals, animal products, biologics, biotechnology and plants.
• Alcoholic beverages — manufacturers, wholesalers, importers and retailers of alcohol beverages must register, pay special taxes and maintain certain records with the Alcohol and Tobacco Tax and Trade Bureau (TTB).
• Aviation — the Federal Aviation Administration (FAA) issues licenses for pilots, aircraft, airports, and medical aviation services.
• Environmental — the Environmental Protection Agency (EPA) imposes environment regulations at the federal level. If your business buys or sells land that is contaminated, you’ll need to go through the EPA to get rid of the contaminants.
• Firearms, ammunition and explosives — manufacturers, dealers and importers of firearms and ammunitions are controlled by the Bureau of Alcohol, Tobacco and Firearms (ATF).
• Fish and wildlife — businesses engaged in any wildlife activity, including the importation of any wildlife or their derivative products, must receive a permit from the U.S. Fish and Wildlife Service.
• Investment Advising — the Securities and Exchange Commission (SEC) requires those who professionally counsel on investments to be licensed.
• Mining and drilling — Minerals Management Service (MMS), a bureau in the U.S. Department of the Interior, is the federal agency that manages the nation’s natural gas, oil and other mineral resources.
• Radio and television broadcasting — If your business broadcasts information by radio, television, wire, satellite and cable, you are required to obtain a license from the Federal Communications Commission (FCC). The FCC doesn’t regulate the internet.
• Interstate ground transportation — you must register if your business will cross state lines.
• Maritime transportation — the Federal Maritime Commission issues licenses for businesses that transport freight or passengers on the ocean.
• Whenever you hire an employee, you must inform the IRS. Check to see if you also need to inform your state authorities. The State of Texas does require employers to inform them when new employees are hired. You can find information about verifying employees’ work eligibility and withholding allowances on the Hiring Employees section of the IRS website.
• Get your NAICS code. The North American Industry Classification System code simply identifies the industry of which your business is a part. You need this code to fill out required paperwork, such as your state sales permit.
• Check your state’s requirements for permits and taxes
• Texas Sales Tax information and application for permit
• Texas Commission on Environmental Quality licensing and compliance resources
• Texas.gov small business information and assistance, including occupational licensing and permits, labor laws, financial resources, emerging technology fund, and requirements regarding unemployment insurance.
• Check on other state tax and regulatory obligations. In Texas, if you have an employee or employees, you must pay employment taxes. You can register online using the Texas Employer Portal. Also use this portal for information about reporting new hires.
• Find out whether or not your state requires you to provide workers’ compensation coverage to employees. In Texas, it’s not required but you might choose to do so. For more information, see the Texas Department of Insurance, Division of Workers’ Compensation website.

Check your city and county’s requirements for starting a business

You may be required to obtain a license (or multiple licenses) for your business. Restaurants may need liquor licenses. There are billiard hall licenses, chauffeur licenses, coin operated machine taxes, contractor’s licenses, and so on. As a business doing journalism, you are not required to obtain any federal or state licenses or permits relating to carrying on a particular trade. Most local or city governments, however, require every business to obtain a basic business license, sometimes called a tax registration certificate. You get this license from your city and/or county. The best way to get information about fees and procedures is to contact your county and city clerk’s office or other local government authority (Depending on where you live, you might be required to register your business with both your county and your city authorities). Your local chamber of commerce is a great source for information regarding local licenses and/or permits. For Dallas: see Dallas City Hall’s searchable list of licenses, permits, zoning and more.

• Check local zoning laws for your business. Zoning laws dictate what your business can and cannot do. For example, zoning laws define what kind of sign you can have and where you can place it on your property.
• Select your tax year. See: IRS.gov: Selecting a Tax Year for more information.
• If you need small business insurance, liability insurance, health insurance or errors and omissions insurance, compare rates and select plans
• If you need outside funding, loans or private investment in your business, research, consider and compare all options before making a decision.

Obviously, there are many dots to connect before your business picture begins to emerge. That’s why our team is happy to help you plan and market your business. Please contact jbushe@adbongo.io to find out what we can do for you.