10 Steps To Starting a Business

STEP 1 – PREPARATION

Knowledge
You should have experience in and knowledge of the business you plan to enter. If you don’t have either, consider working in the industry or with a successful owner/operator for at least six months.

Experience

Having prior experience in management of people and finances is critical to increasing your chances of business success. This is extremely helpful since the majority of businesses fail due to poor or inexperienced management. Oregon’s Small Business Development Centers are an excellent resource for training and assistance to help your business succeed. See “Small Business Development Centers” in this guide for more information.

Research

Do your homework. Hours spent studying your proposed business idea can save you money in the long run and gives you the proper information to avoid unsound business decisions.

  • Oregon’s Small Business Development Centers (SBDC) provides services to Oregon’s small businesses. Find the SBDC in your area at www.bizcenter.org.
  • Check with the Small Business Administration at www.sba.gov.
  • Consult with a counselor at www.score.org.
  • Consult with a counselor at the Women’s Business Center at www.mercycorpsnw.org.
  • Consult with the Small Business Legal Clinic (SBLC) at Lewis & Clark Law School. They provide affordable legal services to low-income small and emerging businesses, including business financing, contract review and drafting, and entity selection and formation.
  • University of Oregon’s School of Law, Small Business Clinic (SBC) provides free legal services to small and start-up business. It also prepares law students to represent business clients through a clinical program in which students are trained in representing small businesses. All client work is performed by law students who are closely overseen by UO law SBC supervising attorneys, who are also practicing business lawyers. Contact the SBC at bizlaw.uoregon.edu/sbc.
  • Your banker knows a great deal about your area, including average income, level of competition, real estate, and rental values. Bankers can be of great assistance, if you take the initiative. Establishing a credit line with your bank can help develop a sound relationship with your banker, and a good record of payment is an advantage when applying for business loans.
  • Contact insurance brokers about coverage needed for your business activity and for approximate premiums. Since insurance is a competitive business, contact several agents for a comparison of both suggested coverage and premiums.
  • Visit your local library. The librarian can help you find the information you need.
  • Check with relevant trade associations, and the local Chamber of Commerce.
STEP 2 – PLANNING

Business Wizard

A service of the Business Information Center is the Business Wizard. Users answer a few brief questions to generate a customized referral list of:
  • Government Licensing Contacts
  • Registration Information Contacts
  • Regulatory Contacts
  • Organizational Contacts
  • City Contacts
  • County Contacts
This referral list contains phone numbers for key agency contacts and internet links to appropriate forms, publications and information about requirements for doing business in Oregon. The Business Wizard is available online.

Write a Business Plan

Whether you are just starting out or already own a small business, completing a basic business plan will help you succeed. Do you need help writing a business plan? The Small Business Administration (SBA) offers a step-by-step tool to “Build Your Business Plan.” Answering a few essential questions will help you clarify and organize what you already know – or need to know – about your business operations. A clear picture of the fundamentals of your business will create a strong foundation to build new ideas, markets, and strategies. Completing a business plan provides you with a better understanding of the financial needs and profit potential of your business.


Seek Professional Advice
Consult at least two professionals:
  • An attorney – Consider having an attorney examine the papers you sign. Get advice on any legal questions pertinent to your business such as tax law, liability issues, and labor laws if you plan to hire employees, or landlord-tenant laws if you plan to lease your place of business. If you do not have an attorney, you may call the Oregon State Bar toll-free at 1-800-452-7636, or visit online for referrals.
  • An accountant – A certified public accountant or a licensed tax consultant can advise you and possibly save you money on taxes if you are buying or starting a business. Your accountant can review tax forms with you, help you fill out the proper reports and give you prompt financial information. If you do not have an accountant, you may call the Oregon Association of Independent Accountants at 503-282-7247, or visit www.oaia.net, or contact the Oregon Society of Certified Public Accountants at 503-641-7200, or visit www.orcpa.org for referrals.
Financing

Identify how you will finance your business. New businesses often underestimate the amount of money it takes to get a business started. An entrepreneur needs to identify both the start-up capital costs and the cash-flow requirements for a business. The total of the two, plus a reserve, is the capital recommended for starting a business. Obtain information on state loan programs from the Business Oregon, Business Finance Section, 503-986-0123. See “Financial Resources” in this guide for more information.

Business Assistance Programs

Oregon has many programs available to assist businesses. See “Business Assistance Programs” in this guide for more information.

Management & Technical Services
Business Oregon provides reports and services for and about Oregon businesses. Check out “Grow Your Business ”.

STEP 3 – SELECT YOUR BUSINESS ORGANIZATION STRUCTURE & NAME

Choose a Business Structure
Consider many factors when choosing the best form or structure of business ownership. The choice you make can have an impact on multiple aspects of your business, including taxes, liability, ownership succession, and others. Consult legal counsel and an accountant before deciding the type of business entity to form. See “How to Choose a Business Structure” in this guide for more information.

Choose a Business Name
When you are ready to select a business name or an assumed business name for your business, check the Business Registry database for name availability. Sole proprietors may conduct business under their own full legal name (first name, middle name or initial and last name) or they may choose to register an assumed business name. See “Business Name Requirements” in this guide for more information. It may also be helpful to do a national trademark search at www.uspto.gov (click on the Search Mark button). You can view more information on trademarks in the back of this guide.

STEP 4 – REGISTER YOUR BUSINESS

The Oregon Secretary of State, Corporation Division is the place to register your Business Corporation, Nonprofit Corporation, Limited Liability Company, Limited Liability Partnership, and Assumed Business Name. Most business types can be filed online through the Central Business Registry. Forms are also available online.

STEP 5 – UNDERSTANDING TAX OBLIGATIONS

Understanding your tax obligations is an important consideration for any business. You may wish to consult with a professional tax advisor or an accountant to help you understand your tax obligations.

Learn about requirements to report personal property to your county assessor’s office. You will also want to check on other taxes that may apply to your business.

Most businesses will need to apply to the Internal Revenue Service for a federal employer identification number (EIN). See “Federal Tax ID Number (SS-4 Form)” in this guide for more information on how to obtain a Federal EIN number.

Depending on your situation, such as hiring employees, you may also need a Business Identification Number (BIN), which is your state payroll tax identification number. Obtain this payroll tax reporting number online through the Oregon Central Business Registry or by completing a Combined Employer’s Registration form available from the Oregon Department of Revenue or the Oregon Employment Department. Please refer to the separate publication Employer’s Guide for Doing Business in Oregon for more information.

All businesses are required to file a personal property report with the county assessor’s office each year. The report should include all personal property on the business premises on the assessment date. If your business has personal property in more than one county, you must submit a separate return in each county. See “Personal Property Tax Report” in this guide for more information.

As a self-employed individual, you will be subject to federal self-employment taxes. This includes Medicare and social security taxes. You may wish to consult a professional tax advisor to determine your personal tax responsibility as a business owner.

STEP 6 – CHECK LICENSES

Many occupations and business activities require special licenses, permits, registrations, or certifications from state agencies or boards. See “Check State & Local License Requirements” in this guide.

STEP 7 – OTHER REQUIREMENTS

Check with the Department of Environmental Quality and the State Fire Marshal if your business will handle hazardous wastes. See “Dealing with Environmental Permits & Regulations” in this guide.

Determine if you comply with the Americans with Disabilities Act (ADA). Many businesses are subject to federal law that prohibits discrimination against disabled persons. See “Comply with Americans with Disabilities Act” in this guide.

Learn about registering Patents, Copyrights, Trademarks, and Service Marks with the State of Oregon and the federal government. See “Patents, Copyrights & Trademarks” in this guide.

STEP 8 – HIRING EMPLOYEES

The Business Information Center also publishes a separate guide to assist business when hiring employees. The Employer’s Guide for Doing Business in Oregon provides a general checklist along with contact information on government requirements for Oregon’s employers.

STEP 9 – ONGOING REGISTRATION REQUIREMENTS

After you have established your business and fulfilled the initial requirements, you will want to make sure that you keep your reporting and registration obligations current. Businesses registered with the Secretary of State, Corporation Division must file renewals and if needed, update their registration information.

Many occupational or business licenses require annual renewal or recertification. For more information visit online for specific requirements.

Nonprofit organizations that engage in charitable activities need to file annual reports with the Oregon Department of Justice (DOJ) Charitable Activities Section, and the Internal Revenue Service. For more information, visit our Nonprofit Services online.



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