Ten Steps to Starting a Business

Starting a business involves planning, making key financial decisions, and completing a series of legal activities. These ten steps can help you plan, prepare, and manage your business. Follow the links below each section for more info on the topic from the Small Business Administration.

Step 1: Write a Business Plan

There are numerous tools online and various local consulting agencies to help you write a business plan. Basically, a business plan is a roadmap of how you plan on creating, organizing, developing, managing, and marketing your business and products. Answering the questions “who,” “what,” “when,” “where,” and “how” are good starting points. How much detail you can fill in will depend on the industry you’ll be working in.

Step 2: Get Business Assistance and Training

Take advantage of free training and counseling services: from preparing a business plan and securing financing to expanding or relocating a business. The City of Rosemount currently offers free one-on-one counseling through Open to Business. Call (612) 706-3926 x259 to set up a convenient meeting on your own schedule. Or contact any number of organizations on our Business Assistance / Counseling page. For online learning, visit the Small Business Learning Center through the SBA.

Step 3: Choose a Business Location

Will you have an office or retail location or are you a mobile or a work-at-home business? There are many things you need to consider when choosing a location, many of them dependent on the type of business or facility, and the community you are in. In some cases, it may be helpful to contact your local Economic Development Office to determine what locations are available in your area.

Step 4: Finance Your Business

Start-up costs are clearly one of the strongest deterrents to starting a business. There are many options for financing your business -- from personal loans to crowdsourcing, venture capitalists to government grants. Some of the organizations providing business counseling also have funding options available to those who qualify or at the very least can give you some guidance as to the most appropriate way to fund your type / size of business.

Step 5: Determine the Legal Structure of Your Business

You will need to decide which form of ownership is best for you: sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, nonprofit, or cooperative. A good accountant and attorney may seem expensive at first, but those professional services are some of the best investments you can make when starting a business.

Step 6: Register a Business Name ("Doing Business As")

Any individual, corporation, limited partnership, or limited liability company that conducts business in Minnesota under a name other than its full legal name, must file a Certificate of Assumed Name, commonly known as a “DBA” (Doing Business As). This is true even if your business name is just a combination of your name and what you will be doing, such as “John Smith Painting.” Contact the Minnesota Secretary of State to check on the availability and to file your new business name.

Step 7: Get a Tax Identification Number

An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN. If you are a sole proprietor, you may be able to just use your Social Security Number, but check with your attorney, accountant, or the IRS to get the right information. You can apply for an EIN in various ways, including online. For more complicated business entities, consider having your attorney or accountant help with that process.

Step 8: Register for State and Local Taxes and Mandatory Insurance

In the State of Minnesota you will also need a Minnesota Tax ID through the Department of Revenue for filing Sales & Use Tax and Withholding Tax. Depending on the type of business you own, there may be other taxes you need to file, and your tax advisor will be able to help in that determination. There is no local sales tax in the City of Rosemount.

Minnesota Workers' Compensation law states all employers are required to purchase workers' compensation insurance or become self-insured. Workers' compensation insurance in Minnesota may be purchased through an insurance agent or directly from an insurance company.

State unemployment tax authority (SUTA) provides benefits to workers who become unemployed through no fault of their own. If you have paid wages to employees in covered employment in Minnesota, you must register for an employer account through the Minnesota Unemployment Insurance (UI) Program.

Step 9: Obtain Business Licenses and Permits

Depending on the type of business, you may need to apply for a license to operate your business at the federal and/or state level. License Minnesota will help you determine and file the licenses you need. Locally, the City of Rosemount requires licenses only for the following businesses: Liquor; Massage Therapy; Gambling; Arcade Parlors, Billiard Halls, and Dance Clubs; and Peddlers, Solicitors, and Transient Merchants.

Step 10: Understand Employer Responsibilities

There are a lot of responsibilities that come with being an employer. When you’re ready to take that step, it is important to understand those responsibilities and be sure you follow all tax and employment laws. Your accountant should be able to help set up and even fulfill many regular employment tax and insurance activities. Failure to follow the rules could result in steep penalties and interest, so having good employment practices and maintaining an organized record system is important.