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Experts are predicting that Florida will have 26 million residents by the year 2030, up from about 21-1/2 million residents in 2019. With so many more people, there will be an equal need for jobs. Small businesses will offer a significant number of those needed jobs. Known for its number and variety of opportunities, Florida already boasts the second-highest number of startups in the nation, with over 100 startups to every 1,000 businesses.
Florida needs about half a million new small businesses. Anyone who wants to take advantage of these opportunities should know the steps to start their own small business in Florida.
7 Steps to Start a Florida Small Business
1. Create a Business Plan
Most people think of a plan as something casual and informal. Business plans are much more formal and detailed. Starting out with a strong business plan can make the difference between failure and success for your business. You don’t have to start from scratch; there are examples you can look over before you get started.
That does not mean that your plan can never change. In fact, there are two major ways to write your plan depending on the level of detail you want. The traditional plan may be dozens of pages long, with details about every aspect of your business and its organization. A lean plan may be just one page, but should still cover all the relevant areas clearly. When you are at the stage where you are looking for investors, you need to be able to show them your business plans so your investors are confident in your future success.
Here are the important areas your plan needs to cover:
- The executive summary explains what your company offers and why it will be successful. This is the section where you can explain why you feel that there is a need for your goods and/or services and how you are qualified to provide them.
- The company description will provide more detail about the company itself. What problems does your business solve? Is location important? Do you have, or need, experts?
- It is important to show the results of a market analysis. Are there already other companies providing the same goods or services? How are those companies doing? How is your new business the same or different when it comes to providing those goods or services?
- Your organization and management chart lets the reader know who is in charge of making decisions at every level. In this section, you can show off important experience and qualifications of those who are already committed to the new business.
- Give more details about the service or product line. How much will it cost for your business to provide? How long will it take? Do you still need intellectual property protection?
- How are you going to let people know about your business? Marketing and sales plans are vital before you open your doors.
- If you are using the plan for a funding request, ask for it here.
- Provide financial projections so you and any potential investors have an idea what success looks like for you.
- Use an appendix to provide all the documents that back up your plan. These may include everything from resumes to credit checks to licenses and permits.
2. Choose the Entity Type.
No one entity type is better than another. You should choose your business entity type based on your own personal needs. Familiarize yourself with the different types so you know which one is best for you.
- Sole proprietorships are often popular for single owners or couples starting out. With this type, the sole proprietor has control over all business aspects, legally and physically. The downside is that a sole proprietor is also personally liable for the business in case of any mistakes or lawsuit.
- Partnerships are almost the same as sole proprietorships. Two or more people may be partners, meaning they own the business equally. Partners make decisions together and earn profits equally. A limited partnership may limit liability for the partners.
- LLCs are one of the most popular business types overall for small businesses. An LLC combines the elements of a sole proprietorship and a corporation, allowing the owners to keep control of decisions on a local level while providing personal protection in case of liability. LLCs are also relatively easy to form with the help of online tools or companies offering formation services.
- Corporations are the most complicated type of business entity. A C-Corporation allows the business to pay taxes and assume some of the liabilities while an S-Corporation allows up to 75 shareholders to share taxable income and expenses from the company.
- Non-profit businesses follow different rules. A registered Florida non-profit business will need directors and an incorporator to get started.
3. Register Your Company
You can get started by filing online on the official State of Florida website. You should be prepared with the information you have collected up til now regarding your new business and its owners. Once you file the information, the State will provide you with an official business number that you can use to conduct business. You will need to have the appropriate filing fee ready as the final step of registering your company.
4. Obtain Necessary Business Licenses
What kinds of business licenses will you need? It is important to understand the types you need so that you do not get into trouble with the local authorities before your business gets off the ground. Depending on where you are, you may need to deal with multiple levels of licensing. For instance, a town may have additional requirements for business real estate or usage.
Several kinds of jobs require their own business license. Check to see if yours is on the list so you can ensure that you have the appropriate training and/or fees. Florida requires a license for everything from cosmetology to auctioneers to harbor pilots, and you may need time to secure the correct license. There are other licensing agents for health professions. Once you have the appropriate license, the State can review your license to make sure you are following all requirements.
5. Understand Tax Considerations
If you are like most people, you are not a business tax expert. That doesn’t mean that you shouldn’t learn the basics of what your business needs so that you can ensure that you able to meet your tax obligations in a timely manner.
- The IRS collects federal taxes. Your business may need to pay income tax, self-employment taxes, employment taxes, and/or excise tax.
- The Florida Department of Revenue collects state taxes. If your business plans to sell taxable goods or services, you need to register with the State before you start actively transacting business.
- The individual counties collect local taxes, usually property taxes. You can find your county here.
- City taxes are collected in some cities but not others. Check out the local municipal directory where you plan to operate so that you know what the city expects of you.
6. Open a Business Bank Account
Whether you have a sole proprietorship or a corporation, you need to have a separate account for your business transactions. Depending on your business, there may be a strict prohibition on mixing client funds with business funds. It is also more confusing to try to conduct business through a personal account.
When choosing an account, find one that offers perks. Some business accounts automatically offer “extras” like free checking or longer billing cycles. You may also be able to get a higher credit line through a business account. If your business is ever audited, you will be grateful you chose to separate your business and personal transactions.
7. Secure Funding
Why wait until the end to get funding? You may be wanting to go ahead and get started as soon as possible, so you want to have the resources to begin providing your goods and/or services immediately. However, you will need to file as a business before your business really exists.
Once you have a business entity you can point to, you can use one or several means to raise money. Crowdfunding is a newer method where you publicly announce your goals and let anyone contribute. If you don’t already have capital, you will probably need to borrow money. Speak with an adviser, such as someone from the SBDC, who can help you make wise decisions. Experts at the Florida Small Development Center Network are waiting to help you with your questions. Depending on your circumstances, you may be eligible to take out a small business loan or a credit card loan.
What Are You Waiting For?
If you have the idea and the motivation, this is the time to start your small business in Florida. Filing is relatively easy and inexpensive and the need for jobs is great. Florida offers many resources to get you started in the right direction. This is a growth opportunity that could slow down in the future.