8 Steps to Start a Small Business

What are the 8 steps to start a small business in CT?

 

You’ve decided to start a business in Connecticut, but you’ve no idea how to take the first step. Don’t worry! Business.CT.gov will show you exactly what you need to do to get started right away. Follow these eight essential steps, then use the new business checklist tool to make sure you’ve got everything covered. You can also tap into local business expertise offered by the Department of Economic and Community Development.

In this article, you’ll learn the steps you need to follow.

1. Choose a name for your CT-based business that isn’t already taken.
2. Decide how your business will be formed (LLC, C-corp, S-corp, etc.).
3. Create a business plan.
4. Get the tax requirements, permits and licenses you need to run your business.
5. Register your business in CT.
6. Find funding for your business (including grants, start-up funds, business loans, and more).
7. Create a website for your business (suggested).
8. Market your business and network (suggested).

 

Choose a business name

You can research the market to see what others are doing in your industry, but you’ll need to choose a name that isn’t already used by another business owner. You can check in CT’s business search database to make sure your idea for a business name isn’t already taken. It’s always a good idea to include your unique selling or service proposition in your business name. It’s what will help brand your business in CT.

There are several free business name generators online if you need ideas.

Once you decide on a name, you’ll pay just $60 to file with the State.

Decide how your business will be formed or your business type

The type of business you choose to form will result in different outcomes. These include liability, taxes you’ll need to pay, and more. You need to decide if you want to form one of the following types of companies:

• Sole proprietorship
• Limited liability company (LLC)
• Limited liability partnership (LLP)
• Limited partnership (LP)
• Non-profit
• Franchise
• S-corp (S-corporation)
• C-corp (C-corporation)

If you form an LLC or S-corp, you’ll likely need a registered agent to act on your behalf, but this can also be you! This person accepts legal and tax documents on your company’s behalf. You can also use a registered agent service to do this.

Create a business plan

This plan should outline how you plan to finance your business. It should also include details on how many employees you will have, how you’ll market your business, how you’ll grow your business, and more. If you need funding to grow an existing business, there are many grants available to small and minority business owners in CT. In this stage, it’s a good idea to do some research and planning to figure out your target markets, competition, and more.

 

Get the tax requirements, permits and licenses you need to run your business

Not all businesses in CT have the same tax obligations to the state or need a license or permit to run, but many do. You can learn more about licenses and the fees required to get them in Connecticut. With your custom business checklist, you can also get detailed information on the application requirements for tax obligations, permits and licenses.

 

Register your business

You need to file Articles of Organization for an LLC and Articles of Incorporation for a corporation with the Connecticut Secretary of the State (SOTS). To do this, you must first set up an account at CT.gov.

Filing fees are currently as follows but may change, so check with SOTS prior to filing:

• Corporation: $250
• LLC: $120

You also need to plan on paying taxes if you’ll have employees or sell goods. You need to get an EIN through the IRS to do this. You can quickly apply for an EIN online. You can also request an EIN by email, fax, or by mail.

You aren’t required to have business insurance in CT, but you may want to consider workers' compensation insurance, general liability insurance, or insurance to protect physical property.

Fund your business

There are many ways to fund your business in CT aside from coming up with start-up funds from your own pocket. Some business funding opportunities include:

• Special CT programs: Review funding opportunities (ct.gov) available through different programs in CT.
• Incubator programs: There are many programs in CT that help businesses incubate in their infancy with funding, mentorships, and more. Visit Connecticut Finance (connecticutincubators.org) to learn more.
• Small Business (SBA) loans: You can visit the federal SBA site to learn more about funding your business with a loan.
• Bank loans: Banks and credit unions in CT that help fund small businesses include:
  
  • Credit unions
  • Banks
• Grants: Visit the Connecticut Department of Economic and Community Development website for available grants and other funds.
• Crowdfunding: Many successful businesses are started with campaigns on crowdfunding sites like Kickstarter or Indiegogo.
• Angel investors: Start by contacting the CT Small Business Development Center (it's based at UConn) and checking AngelList or Gust for individuals or companies looking to help provide funds to small businesses. Also check at networking events in CT on sites like Eventbrite and others.
• Venture capital funding: You can often find individuals who are looking to fund businesses for a portion of the profits at networking events or visit Connecticut Innovations for funding opportunities.
• Friends and family: Friends and family can be a great source of financial support for your business. Just make sure you keep clear contracts in place about what’s expected as return payment if you take out a loan from someone you know.
  
  

Create a business website

You can’t really do business in today’s world without a digital storefront - your business website. Even with a physical location, you can increase visibility and online sales for services and goods if you set one up. If you don’t have technical skills, there are hundreds of people who can help you create a business website online at places like Upwork or Fiverr. A website also helps you to collect valuable data about your customers so that you can give them more of what they need, and grow your business accordingly.

Market your business

You might have the best products or service in the world, but your business won’t thrive unless people know about you. You can use traditional marketing like mailers, posters, and business cards, or you can try online advertising through social media, text messaging, or your own website and email lists to customers. This is an important last step to help establish and grow your Connecticut business.