Starting a business in Utah for the absolute beginner

A man sitting in an open office setting  in front of his computer laughing with a note stuck to his head. Starting a business in Utah for the absolute beginner, man in office smiling

 

By Cara MacDonald, KSL.com | Posted - Apr 20th, 2019 @ 11:59am

SALT LAKE CITY — “Silicon Slopes,” “The new silicon valley,” “a tech bubble.” All Utahns have heard the descriptors and the message is simple — business, and specifically tech business, is positively booming in Utah.

In 2018, 99.3 percent of Utah businesses were small businesses, according to the United States Small Business Administration. There were 557,794 individuals employed by small businesses (46.3 percent of the Utah workforce) and 29,956 new jobs. Utah’s unemployment rate is well below the national average, and the state is ranked third in the nation for ease of conducting business.

It’s safe to say that starting a business in Utah in its current climate is not a bad idea. That said, starting a company presents quite the challenge. Here’s a guide to starting a small business for the absolute beginner:

Step 1: Come up with the right business idea

Before you can own a company, you have to start somewhere, and the first step is to come up with an idea. It should fill a need you see in your community and it should be an idea that inspires you to the point where even when the going gets tough, you’ll still be excited by it.

Step 2: Do market research and competitive analyses

You’ll want to do this before writing your business plan because, oftentimes, market research and competitive analysis will review glaring holes in business strategies and inspire new ideas. Market research helps to understand the customer base and competitive analysis leads to making a business unique. Together, they create a competitive advantage for your idea.

For more on how to conduct market research and competitive analysis, see the Small Business Administration.

Step 3: Do some financial planning

Don’t go starting a business that’s doomed to fail due to poor financial planning. How to Start an LLC suggests assessing how many clients and sales you’ll need to break even as well as how much money you will need to be successful.


Before you can own a company, you have to start somewhere, and the first step is to come up with an idea. It should fill a need you see in your community and it should be an idea that inspires you to the point where even when the going gets tough, you’ll still be excited by it.

Take some time to calculate your startup costs and look into options for funding your business. You might try bootstrapping (paying for it yourself), raising funds from friends and family, seeking venture capital or an angel investor.

Step 4: Write a business plan

A business plan is foundational to starting a business and provides a good means of sharing it with others and applying for funding. The plan provides a roadmap for how to run and build the business as you go through the startup process and beyond. According to the Small Business Administration, business plans fall into two categories:

  • Traditional business plan: Uses a standard structure and delves in-depth into each section. A typical business plan’s structure includes an executive summary, company description, market analysis, organization and management structure, service or product line, marketing and sales plan and financial projections.
  • Lean startup plan: These standard-structured plans are less common and focus on summarizing the key points. They are typically only a page or two and get the idea across quickly. A lean startup plan will include key partnerships, key activities, key resources, value propositions, customer relationships, customer segments, channels (reducing cost or maximizing value?), cost structure and revenue streams.

     

There are many templates for writing business plans online, so utilize those in planning the layout and structure of yours.

Step 5: Pick a business structure and register your business

There are numerous different kinds of business structures to choose from when starting a business. In Utah, you can register your company as a Corporation, Nonprofit Corporation, Limited Liability Company (LLC), Sole Proprietorship, General Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP), Business Trust or a Collection Agency.

Most small businesses will register as a Limited Liability Company (LLC) because they provide liability protection while maintaining ease of operation. They don’t have to hold annual meetings or comply with the restrictions of corporations and owners are not responsible for any liability on the part of the LLC.

As this is a guide to starting a small business, we will proceed with Limited Liability Companies. You will need to register your LLC with the state of Utah and to do so, you will need to identify:

  • The name of the LLC.
  • The principal address where the company will be located.
  • The name and address of members and managers.
  • The duration of the business entity.
  • The purpose of the business entity.
  • Deliver the signature of the organizer.

Registering as an LLC in the state of Utah also requires an original copy of the Certificate of Organization and a $70 fee. Business owners can file for LLC status in person, by mail, fax or email, or they can file and pay online at the OneStop Business Registration site.

Step 6: File for an EIN

The Employer Identification Number is not unlike a Social Security number, just for a business. It will be your state tax and federal tax ID number which facilitates paying for state and federal business taxes. This will allow you to pay employees, file tax returns, withhold taxes on income, etc.

Learn more about applying for an EIN here.

Step 7: Apply for licenses and permits

Many businesses require state or federal licenses or permits for operation. Learn more about what you might need and where to get them at the Small Business Administration’s website.

Step 8: Create business banking/credit accounts and set up accounting

Your business is alive and operational, so set up a bank account for your income and expenditures to help you stay legally compliant and protected. Consider setting up an accounting system as soon as your bank account is operational, as it will help you keep track of all income and expenditures for tax filing and financial planning.

Step 9: Start operating

Now that you have a legal and operational business, get started on the fun part: running and growing it. Some aspects of running the business you will want to be on top of include:

See source article on KSL.com HERE.

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