Thinking of starting a business in Minnesota? We’ve got you covered. Check out this blog post for everything you need to know about how to start a business in the North Star State.
Checkout this video:
Decide the business structure
The business structure you choose will impact many factors from liability to taxes. Here are the most common structures:
Sole Proprietorship: A sole proprietorship is easy to form and gives you complete control of your business. As the name implies, you are the sole owner, responsible for all debts and obligations. You are also taxed as an individual on profits earned.
Partnership: A partnership is two or more people who own a business together. Each partner contributes money, property, labor or skills and shares in the profits or losses of the business. Partnerships can take different forms, so it’s important that you have a written agreement that spells out each person’s rights and responsibilities. All partners are taxed as individuals on their share of profits.
Limited Liability Partnership (LLP): An LLP is similar to a partnership with one key difference – partners have limited personal liability for debts and obligations of the partnership. This means that if your LLP is sued, creditors can go after business assets, but not personal assets like bank accounts or homes. LLPs are often used by professional service providers like accountants and lawyers who want some protection from personal liability without organizing as a corporation. Like partnerships, LLPs are taxed as individuals on their share of partnership profits.
Limited Liability Company (LLC): An LLC offers owners limited personal liability for debts and obligations of the company, similar to an LLP. LLCs can choose how they want to be taxed – either as an entity with corporate tax rates or as individuals using pass-through taxation like partnerships and sole proprietorships. Because LLCs combine features from both corporations and partnerships, they have become a popular choice for small businesses in recent years.”
Get the licenses and permits
You will need to get several licenses and permits before you can open for business. These include a:
-Sales tax permit
-Employer identification number (EIN)
You may also need other licenses and permits, depending on the type of business you are starting and where you are located. The best place to start is the Minnesota Business Gateway. They can help you identify which licenses and permits you will need.
Register the business name
The first step in starting a business is to choose a name for the company. The business name should be distinctive and reflect the company’s mission or values. Once you have chosen a name, you will need to register it with the state of Minnesota.
To register the business name, you will need to submit an application to the Minnesota Secretary of State’s office. The application must include the proposed business name, the names and addresses of the company’s owners, and a filing fee.
After registering the business name, you will need to obtain a business license from the Minnesota Department of Revenue. The license will allow you to operate your business in Minnesota and collect sales tax on behalf of the state.
You will also need to obtain a federal employer identification number (EIN) from the Internal Revenue Service (IRS). The EIN is used to identify businesses for tax purposes and is required when hiring employees.
Once you have registered the business name and obtained all of the necessary licenses and permits, you will be ready to start operating your business in Minnesota!
Open a business bank account
You will need to open a business bank account so that you can keep your business finances separate from your personal finances. This will make it easier for you to track your expenses and income, and it will also make it easier for you to file your taxes at the end of the year. To open a business bank account, you will need to have your business registration information handy, as well as your Social Security number or Employer Identification Number (EIN).
Set up accounting
Among the first things you need to do when starting a business in Minnesota is to set up your accounting system. This will ensure that you have an accurate record of your income and expenses, which will be helpful come tax time. You can either do this yourself or hire an accountant to do it for you.
There are a few different ways to set up your accounting system, but the most important thing is that you select a method that works for you and that you can keep up with on a regular basis. Once you have your system in place, be sure to track all of your income and expenses carefully. This will help you make sound financial decisions for your business and avoid any surprises come tax time.
Create a marketing plan
Even if you’re not planning on seeking outside funding, a marketing plan is essential to the success of your business. Your marketing plan should be updated regularly as your business grows and changes.
Here are some things to consider when creating your marketing plan:
-Your target market: Who are you selling to?
-Your unique selling proposition: What makes your product or service different from others in your industry?
-Your marketing mix: How will you reach your target market? Will you use advertising, public relations, direct marketing, or a combination of strategies?
-Your budget: How much can you afford to spend on marketing?
-Your objectives: What are your goals for your marketing program? What do you hope to achieve in the short and long term?
-Your timeline: When will you implement your marketing program? What are the milestones you’d like to achieve along the way?
The first step is to get insurance for your business. You need to have a general liability policy in place to protect your business from lawsuits. You also need to have workers’ compensation insurance if you have employees. If you have a home-based business, you need to make sure that your homeowner’s insurance policy covers your business activities. You can get quotes for all of these types of insurance on the internet.
The next step is to get a business license from the city or county where your business will be located. You will need to fill out a form and pay a fee.
Then, you need to register your business with the Minnesota Secretary of State’s office. This can be done online or by mail. The fee is $50 for most businesses.
Once your business is registered, you need to open a bank account for it. Be sure to use a business credit card for all of your expenses so you can track them easily.
Now, you are ready to start marketing your new business!
When you’re ready to hire your first employees, you’ll need to register with the Minnesota Department of Employment and Economic Development. To do this, you’ll need to:
-Create an Employer Account
-Log in to your account
-Register your business
-Get an unemployment insurance account number
“Certified writer. Friendly gamer. Reader. Problem solver. Organizer. Devoted troublemaker.”