U.S. Small Business Administration 2021 indicates that there were 13,287 Indiana establishments opened between March 2019 and March 2020. This clearly shows that Indiana is one of the preferred business start-ups destinations.
However, the same organization indicates that more than 14,000 establishments closed during the same period. That tells you how it’s hard to start a successful business in the state. To succeed, you have to do everything right.
With our step-by-step guide on how to start a business in Indiana in 2022, things can get a lot easier. We will help you come up with the business idea, draft a plan and help you decide on the business entity that will work for in Indiana plus other important information.
11 Basic Steps To Start A Business In Indiana 2022
Starting a business in Indiana involves several steps. However, we break down the steps and offer information that will make the process easier for everyone.
Pick A Business Idea
This is the first and a very important step when starting a business in Indiana. Your business idea should always aim at providing products and services that don’t already exist in the market or refining existing products and services.
You should also aim at determining your personal strength and interest and come up with a business idea that suits them.
Plan Your Business
A business plan is like a blueprint of your business. It helps you organize and develop your ideas and goals. It should highlight the path of your business from the start to success. A well-drafted business plan will help you get external funding.
However, you should not draft a business plan just for the sake of getting funds. A business plan helps create a roadmap of where you want your business to go and you should not build a business without it.
Every business requires money to get off the ground and run. There are several funding options that you can choose from in case you can’t find the business by yourself.
You can get loans from the Community Investment Fund of Indiana, Regional Development Company, Michigan City Economic Development Revolving Loan Fund, Pulaski County Revolving Loan Fund, and LarPorte County Revolving Loan Fund.
Other lending institutions include commercial banks, U.S. Small Business Administration, among other funding institutions that are active in Indiana.
Choose a Business Structure
The next step is selecting a business entity, also known as a business structure or legal structure in Arkansas. A legal structure is simply how a business is legally organized. There are quite a number of business structures to choose from, including:
A sole proprietor is an individual that decides to go into business. It has the advantage of being easy to set up, lower cost, and has fewer administrative requirements.
However, the owner is personally liable for all debts and actions of the company and your personal assets can be used as collateral in case the company gets sued. In addition, a sole proprietor pays self-employment tax on all business profits.
If you want liability protection and great tax flexibility, a limited liability company is a good option.LLC separates the assets of the business and your personal assets. This means, that your personal assets cannot be used to repay company debts or actions in case of lawsuits.
Besides, you also have the freedom to decide how your company is taxed – either as a standard corporation, S-corp, or a partnership. If this is your best choice, you can form it in the following five steps:
Corporations also come with liability protection. If you feel it is the right entity for you, it can be formed in five simple steps. These steps include: naming your corporation, appointing a registered agent, creating bylaws, filing Articles of Incorporation, and obtaining EIN.
You can form a standard corporation (C-corp) or S-corp if you qualify.
Non-profit is formed to facilitate social causes and for that reason, are exempt from paying tax. It is funded by a donation rather than an investor. Examples are Samaritan Purse, MAP International, Feed the Children among others.
The partnership is like a sole proprietorship but with multiple members. That said, it doesn’t offer liability protection. This means, that your personal assets are equally at risk in case of company debt and lawsuits.
Related: How to Form an LLC Indiana
Register Your Indiana Business
Registering your business name is the first step toward making your business entity legal in Indiana.
You don’t have to register a sole proprietorship or partnership unless you want to operate on a name different from your official name. In such a case, many banks require that you file a Certificate of Assumed Business Name with the county clerk within the county where your business operates.
For LLCs and Corporations, you have to pick a name different from the name of the entities operating in Indiana. LLCs and corporation names are registered with the Indiana secretary of state. Registering your LLC/corporation name comes with liability protection but doesn’t prevent someone from using that particular name.
To legally protect your LLC or corporation name from being used by others, you will have to register a trademark with the U.S. Patent & Trademark Office (USPTO).
Set up Banking, Credit Cards, & Accounting
You can protect your personal and business assets by using a company-dedicated business banking and credit account. When you use the same account as your personal and business account, your personal assets are at risk if your business gets sued.
Choosing business structures like LLC and corporation only protects your personal assets from lawsuits, which is even limited. You can further protect both your business and personal assets from unexpected catastrophes by insuring your business.
Some of the most common types of insurance are
- General liability insurance
- Product liability insurance
- Professional liability insurance
- Commercial property insurance
- Commercial property insurance
Obtain Permits & Licenses
Depending on your business activity and location, you will need a business license or permit in Indiana.
You can find out the licensing your business need through the following resources:
Unless you decide to be your business’s sole employee, hiring employees is a very key step in your new business. However, it is a complex process and it is not all about finding qualified people. There are several agencies to register with in order to stay compliant with the hiring requirements.
As an employer, you are also responsible for reporting new hires.
Build a Business Website
Creating your business website is another essential step that you should not assume. The good news, creating a business website is now a simple process even for small business owners. There are several tools such as GoDaddy.com, and Domain.com among others, that you can easily use to design a website and fill it with content.
Promo Your Business
There are several ways you can promote your business. You can create profiles on popular social media services, register a Google profile and create accounts on YouTube and popular review sites such as Yelp, TripAdvisor, TrustPilot, etc.
The press release is another great way to promote your business. Press releases provide publicity, establish your brand on the web, and improve your website SEO.
Important Steps After Forming A Business In Indiana
What you do after forming your business in Indiana is just as important as starting your business. You will have to make sure that your new business stays compliant with the state law, protects your personal assets, and makes them successful.
Some of the most important steps you should take after forming or registering your business have already been discussed in our basic steps to start a business in Indiana. These include setting up a banking account, credit card & accounting, getting insured, obtaining a permit & license, hiring employees, creating an online presence, and promoting your business.
However, there is a lot more to do after registering your business. It all depends on the type of business you have formed. Just research and learn your entity requirements.
Type Of Business Start In Indiana
529, 456 small businesses will exist in Indiana by 2021, which is 99.4% of all businesses in the state according to the U.S. Small Business Administration . Based on this data, we will be right to say that small business is the way to go in Indiana.
That said, there is an endless list of small businesses to start in Indiana, and several factors go into making your pick. With all the factors put into consideration, the most popular type of businesses to start in Indiana include:
- Car dealership
- Towing company
- Medical transportation
- Graphic design
- Pet sitting
How Much Does It Cost To Start A Business In Indiana?
The cost of starting a business in Indiana will vary depending on the type of business and where it is located. Some of the areas where you may incur costs include:
- Business Entity Formation – $0 – $100
- City Business License – $0 – $200
- Employer Identification Number (EIN) – $0
- Registered Retail Merchant Certificate – $25
Starting a business in Indiana is quite involved but hopefully, our free guide and helpful resources have made it simple. The good news is, that the cost to start a business in Indiana is average. Besides, Indiana doesn’t charge a lot of taxes and that means the cost of maintaining your business in the state is also low. No wonder it is preferred by most small businesses.
Frequently Asked Questions (FAQs)
There are several requirements to starting a business in Indiana depending on your business entity. For instance, corporations and LLCs require filing articles of incorporation/ organization, creating bylaws/operating agreements, and appointing a registered agent in the state.
Filing the articles of organization with the Indiana secretary of state cost $95. However, there are other costs you will incur, including that of registered agent service.
The state of Indiana does not require a general business license. However, several municipalities require licenses at the county or city level.
Starting an LLC in Indiana involves a number of steps. However, the three key steps include making sure your LLC name is available, appointing registered agents, and filing the articles of the organization.
Every business entity comes with its advantages over the other. For that reason, it all depends on what you find suitable.
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