How to Start a Small Business in Tennessee | 10 Steps
Are you considering starting up your own small business in Tennessee? You’ll be joining an array of successful small businesses that have found success in the Volunteer State. If you’re ready to take your entrepreneurial dreams to the next level, follow these 10 steps to get your small business up and running in Tennessee.
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Table of Contents
- Step 1: Come Up With Your Idea
- Step 2: Choose a Business Structure
- Step 3: Name Your Business
- Step 4: Get Licensed
- Step 5: Open a Business Bank Account
- Step 6: Register Your Small Business
- Step 7: Apply for an EIN
- Step 8: Buy Insurance
- Step 9: Create a Marketing Strategy
- Step 10: Spread the Word
- Frequently Asked Questions
- Wrapping Up
Step 1: Come Up With Your Idea
Are you ready to launch your own small business in Tennessee? Lucky for you, this guide will go over all the details you need to know before starting on this exciting journey. So, without any further ado, let’s get started.
Research the Market
Before you dive headfirst into the business realm, it’s important to know what you are getting into. Research the market to find out what products or services are in demand, what competitors are in the area, and what regulations and licenses you may need. Additionally, make sure to research online and reach out to potential customers to see if they would be interested in your small business.
Plan Your Budget
Once you have a great business idea, it’s time to plan your budget. You will need to estimate the startup costs and operating costs for your small business, as well as the products and services you need to purchase to get the business up and running. Additionally, plan out the expected profits and cash flow to ensure that you can stay afloat in the long run.
Create a Business Plan
Your business plan should include an executive summary, a mission statement, a description of the products and/or services you offer, a SWOT (strengths, weaknesses, opportunities, and threats) analysis, a break-even analysis, a competitor analysis, and more. Also include a list of tasks and milestones that you need to accomplish in order to get your business running, as well as a marketing plan.
Step 2: Choose a Business Structure
Research Your Options: The type of business structure you choose will have a big impact on the success and stability of your small business. In Tennessee, the three most common business structures are the sole proprietorship, the partnership, and the corporation. Do some research to learn the differences between each of these structures and determine which one is best for your specific business needs.
Sole Proprietorship: A sole proprietorship is the simplest and least expensive way to form a business. It is owned and run by one person who makes all the decisions on prices, products, and strategies. Advantages of a sole proprietorship include being able to easily make decisions, keeping all the profits, and not having to pay corporate taxes. The main disadvantage of a sole proprietorship is that the owner holds personal responsibility for any losses.
Partnership: If two or more individuals want to own a business together, it’s best for them to form a partnership. All partners are responsible for any debts or obligations associated with the business, so it’s important to have a clear and legally binding agreement detailing each partner’s responsibilities and contribution to the business. Advantages of a partnership include the ability to share costs, splitting the workload, and drawing on a range of expertise. Disadvantages include disagreements between the partners and the possibility of wasted time and energy.
Corporation: Establishing a corporation is more complex than the other business structures, and often involves hiring a lawyer and accountant. A corporation is a separate legal entity from its owner, and it provides limited liability protection. This means that the shareholders are not personally responsible for the debts and other liabilities of the corporation. Advantages of a corporation include getting access to corporate financing, easier access to new markets, and providing investors with attractive tax benefits. But it also comes with important downsides, such as costly paperwork, having to comply with additional regulations, and the potential to attract lawsuits.
Since the legal implications of choosing the wrong business structure can be serious, it’s a good idea to talk to a lawyer or accountant for advice. By doing your research and getting expert help, you can make an informed decision and choose a structure that will protect your business and ensure its long-term success.
Step 3: Name Your Business
It is time to give your business a unique name. It is essential that your brand name is customizable and can be used for a wide range of marketing and advertising channels. When deciding on a name, consider a few things:
Legality: You must check the availability of the name. Make sure no other business has already registered it with the state. Also check if the desired domain name is available. You can easily check this on the Tennessee Secretary of State’s website.
Memorability: Think of a name that is creative yet memorable. It should be something that people will remember and word of mouth should spread easily. Keep it simple and catchy.
Tradability: A great name is one that can be trademarked. This is especially important if you plan to expand your business in the future. This way, you will protect your brand and maintain your company’s distinctiveness.
You can brainstorm with yourself or a team of professionals to come up with good business names. Once you narrow down your selection of business names, you can research other companies that may be in the same market to ensure no conflicts will exist.
Also take into consideration the expense of branding and marketing your chosen name. This could present an extra cost. Therefore, you should always make sure you’re happy and comfortable with your decision before declaring your official business name.
Step 4: Get Licensed
- Register Your Business Name: Georgia operates under the “assumed name” law. Registering your “assumed name” with the state allows you to legally operate your business in Tennessee and obtain licensing. You must register your business name within 30 days of your startup date.
- Get the Required Licensing and Permit to Operate: Tennessee maintains licenses for businesses such as restaurants, food delivery services, and hair salons. Also, if you’re planning to hire employees, you must obtain an employer identification number or “EIN.”
- Check For Zoning Restrictions: Tennessee requires that businesses adhere to specific zoning ordinances, which can vary by region. Review the zoning ordinances that apply to the location you’ve selected for your business and ensure it meets all the requirements.
- Hire Qualified Employees: It’s important to take the time to hire qualified employees for your business. As the owner of a small business in Tennessee, you are responsible for understanding the requirements of workplace labor laws. Also, check with your local county or city offices for any additional permits or licenses that may be necessary.
Step 5: Open a Business Bank Account
Get Ready to Deposit Funds
Now that you’ve selected your business name and completed all the necessary paper work, it’s time to open a business bank account. Starting a business in Tennessee requires entrepreneurs to open a business bank account separate from their personal accounts. This will help protect you from personal liability in the case of legal proceedings.
Finding the right bank for you can take some leg-work. Different banks offer different features for businesses, from over-the-phone support to interest-bearing accounts. Therefore, it’s important to do a little research to decide on the one which is the best fit for you. When it comes to opening a business bank account, all you’ll need is your business name and tax number. You’ll also need to be sure to take some sort of photo ID for verification.
Look for a bank that offers:
- Low minimum balance requirements
- No monthly fees
- Easy online deposit processing
- Competitive rates
Opening a business bank account is one of the last steps you need to take before you open your business for customers. It’s an important step, as it allows you to manage your funds and manage growth and expansion safely and securely. With the right bank account you’ll have the resources to plan for the future and make sure your business thrives for years to come.
Step 6: Register Your Small Business
Now that you have taken the first five steps in starting your small business in Tennessee, it’s time to get registered. Registering your small business is a necessary step to protect your local enterprise and to get it started on the right track.
The state of Tennessee requires certain businesses to complete a registration process before engaging in trade. To register your business with the state, you will need to:
- Choose the type of business formation, such as an LLC, corporation or partnership.
- Fill out a completed certificate of formation.
- Pay the registration fee.
- Submit the certificate of formation to the state.
After you have registered your business with the state, you will need to register your business with the federal government by applying for a Federal Tax Identification Number (EIN). You can submit an application for the EIN online or through the mail. Make sure you keep your EIN for future transactions and tax filing.
Once you have your official registration for the state and federal government, you can now legally operate your small business in the state of Tennessee. Congratulations on registering your business!
Step 7: Apply for an EIN
Once you have registered your business with the TN Secretary of State, there is one final step to open a small business in Tennessee: obtaining an Employer Identification Number (EIN). An EIN is a unique number assigned to your business by the IRS in order to track your business related transactions. Your EIN is like your personal Social Security Number for your business.
Fortunately, getting an EIN has become an easier process in recent years and it’s now possible to secure your EIN in no time and without having to mail or visit a physical location. Here’s what you’ll need to do:
- Visit the IRS website. The first step is to visit the IRS website and complete the appropriate application for obtaining an Employer Identification Number.
- Review the application. Carefully review all information found on the application, ensuring accuracy and completeness. If the information provided is incorrect or incomplete, your application will be rejected.
- Submit the application. Once your application is completed and reviewed, submit it electronically to the IRS.
- Confirm your EIN. Once your application has been received and processed, you will receive an email that contains your EIN. This is the official confirmation of your business.
Keep your EIN in a safe place, as it is a sensitive document. You’ll be able to use your EIN for filing taxes and managing payroll, so it’s important that you have ready access to it – keep it in the same folder as your business paperwork.
Step 8: Buy Insurance
Once your business is up and running, it’s important to have the right insurance. Tennessee law doesn’t require businesses to carry insurance, but it’s an important safeguard against potential liabilities. As such, it’s essential to understand the various types of policies available for Tennessee businesses and choose the appropriate coverage for your organization.
Here are some types of insurance to consider for a small business in Tennessee:
- General liability insurance
- Workers’ compensation insurance
- Property insurance
- Business auto insurance
- Employment practices liability insurance
- Cyber liability insurance
As you shop for insurance, make sure you’re getting the right coverage for the best price. Carefully read policies to make sure you understand what you’re buying, and shop around to compare rates. Buying insurance from an independent agency or broker might give you more options for coverage than buying policies directly from an insurer.
Buying the right insurance can help protect your future and the future of your business. Make sure you’re taking all the necessary steps—like getting the right insurance—to ensure the success of your Tennessee small business.
Step 9: Create a Marketing Strategy
Creating a marketing strategy is critical for any business. As a seller in Tennessee, you need to think carefully about gaining the attention of customers and making sure your business stands out from the competition.
- Establish Your Target Market: Start by defining your target customers and the geographic area in which you plan to do business. This will help you narrow down the types of marketing tactics you use and ensure you’re focusing on the right types of customers.
- Research Your Competitors: You should research your competitors to understand what types of strategies they’re using and whether you can differentiate yourself in ways they cannot. You can research online and also talk to customers to get an understanding of the market.
- Define Your Marketing Goals : To create a marketing strategy that is effective, you need to determine specific goals that you hope to accomplish. Do you want to increase brand awareness, drive website traffic, or generate sales? Knowing your objectives will help you develop a plan to achieve them.
- Choose Your Tactics: After you determine your goals, you can choose the marketing tactics that will help you meet them. Consider tactics such as content marketing, social media marketing, email marketing, and pay-per-click advertising. Then, create a budget and allocate resources accordingly.
Once you create the strategy, remember to track your progress and adjust your tactics as necessary. With a good plan and thoughtful execution, you can market your small business effectively in Tennessee.
Step 10: Spread the Word
Marketing Strategies
When you’re ready to start spreading the word about your small business in Tennessee, you can use a variety of marketing strategies to help boost your reach. Consider the following strategies to leverage:
- Create an online presence with social media platforms (Facebook, Twitter, Instagram, etc.)
- Connect with local media outlets and bloggers for press coverage and reviews
- Incentivize referral programs and discounts
- Create digital content (blog posts, infographics, videos, etc.) to share and engage with potential customers
- Utilize online advertising such as Google Ads and Facebook Ads
- Hire an experienced marketing or PR firm to help with campaigns and events
Networking Opportunities
Broaden your professional network to build connections and relationships with other businesses and entrepreneurs in your area. For instance, join a business meetup in your area so that you can share ideas, build partnerships, and get referrals. You can also join professional organizations to get discounts, resources, and advice.
Community Events
Look for ways to get your small business involved in the local community by participating in events and festivals. You can host an open house, give lectures, present demonstrations, or provide a product or service to display. This is a great way to raise awareness of your business amongst local residents.
Influencer Marketing
Influencers in your industry can be a powerful tool to reach potential customers. Seek out popular influencers with an established following and collaborate on building an online presence for your business. Consider offering promotional products, discounts, special events, or other unique experiences to attract influencers and establish solid relationships.
Frequently Asked Questions
What are the first steps for starting a small business in Tennessee?
The first steps for starting a small business in Tennessee are researching the legal requirements, registering for taxes, finding a suitable business location, naming your business, and creating a business plan and budget.
Does Tennessee have any specific requirements for starting a business?
Yes, Tennessee requires you to register and pay fees for things like business or professional license, occupational license, employers withholding tax, unemployment tax, and sales and use tax. It also has requirements related to filing paperwork with the state government, zoning approval, and premises inspection.
What type of business plan do I need to create?
A business plan will contain the objectives and goals of your business, the products and services you plan to offer, your target market, marketing strategies, financial plans, and operational details. It should be an organized and comprehensive document that covers all the important aspects of your business.
What sort of taxes may I need to pay?
It depends on your type of business and the services or products you provide. In Tennessee, some of the taxes you may need to pay include sales, use, unemployment, rental, lodging, employers withholding, and much more. Make sure to research the applicable taxes for your business.
Wrapping Up
You don’t need to wait any longer to make your dreams of owning a small business in Tennessee a reality! By following the simple steps outlined in this article, you now have all the information you need to take the first step towards entrepreneurship. With some hard work and dedication, you will soon be running your own successful small business in Tennessee!
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