10 Steps to Starting a Business in Tennessee
Do you have an amazing business idea in Tennessee and feel lost on where to start? Setting up a business in any part of the country can be a daunting task. Instead of feeling discouraged and losing your entrepreneurial momentum, follow these ten steps for starting your business in Tennessee.
Decide on Your Business Idea
Tennessee has seen an impressive increase in business growth recently, with uninterrupted double-digit growth over six consecutive quarters. Now is the time to throw your hat in the ring as a small business owner!
If you know you want to start your own business in Tennessee but haven't solidified an idea yet, pay close attention to this section. Otherwise, if you've already nailed down your perfect business idea, skim this section and move on.
When you first decide to start your own business in Tennessee, consider what inspired you to take the leap.
Were you having a problem with a product you were using at the time?
Did you see another business and think it was a great idea that you could improve?
The answer could be right in front of you.
If you're simply the entrepreneurial type, take some time and research the types of businesses in your area. Look for those that are doing well and where there might be a gap in the market in your part of Tennessee. If you want to have more of a national brand, expand your research to the entire country. Additionally, think about what you're proficient at or have a great deal of knowledge about.
Are you crafty and make your own jewelry?
Are your barbeque recipes revered at your neighborhood cookouts?
Or, are you an insurance agent wanting to start your own agency?
One of the main reasons people go into business for themselves is because they want to be their own boss and do what they love. That said, even though love for your job is essential, you should still keep profitability top of mind.
Conduct Market Research and Create a Business Plan
A business based on something you're passionate about can seem like a great idea, but if no one wants your product or service, you won’t be able to make any money to keep your doors open. With 50% of small businesses failing within the first five years, dedicating hours to market research for your local area, the state of Tennessee, and even national markets, will ensure that your idea will be able to stand on its own two legs and thrive.
Do research on the cost of goods, what you can charge for them, how high the demand is, and any other costs that might be associated with your type of business. Once you have all this information, you can start creating your business plan. This is a way to showcase your business idea before it starts, but it also helps you organize your thoughts and straighten out any details that will make a difference in the probability of your success. The critical components of a business plan outline, according to the Small Business Association, are:
- Executive Summary
- Business Description
- Market Analysis
- Organization and Management
- Service or Product Line
- Marketing and Sales
- Funding Request
- Financial Projections
If you need assistance constructing your business plan, many templates and services exist that can help you along the way.
Name Your Business
Once you’ve chosen a business type, it’s time to name your business. While some like creative names, a simple name can benefit your business. How people find you is important, and a straightforward name can help you come up faster online. For example, if you want to start your own business selling honey-based products, having the word “honey” in your name is optimal.
Once you have a name in mind, ensure another business is not already using it. If you choose the same name as another business, this can cause legal issues down the line, especially if you ever want to trademark your name. You can navigate this website to look up business details, including names, in Tennessee to ensure your desired business name is available.
Still having trouble coming up with a name, or the name you want is already taken? You can also brainstorm by using a business name generator website to help you find that perfect name for your business.
Register Your Business
After finalizing your business idea and name, the next big step is to register your business with the state of Tennessee. The website will navigate you through the process, but the first step is vital because you need to choose your Business Entity Type and the legal structure of your business. The options include:
- Limited Liability Company (most common)
- For-Profit Corporation
- Non-Profit Corporation
- Limited Liability Partnership
- Limited Partnership
- General Partnership
In Tennessee, there are several options to choose from, and you should do your own research to determine which type is best for your business. This can heavily influence your taxes and financial benefits, so make sure to take the time to make an educated choice.
Licensing & Permits
Every state can be different, so it is crucial to research and obtain the proper licenses and permits for Tennessee. If this step seems overwhelming, you can work with license and permit service companies that do all the work for you. If you do not want to hire a service, you can contact your local county clerk with any questions.
Open a Bank Account for Your Business
When starting a new business in Tennessee, you’ll need to establish a separate business bank account. With a business bank account, you can easily manage your personal and professional finances appropriately.
With SouthEast Bank, you have several banking options while opening your new business in Tennessee.
In addition, we offer treasury management services to help support your business banking needs.
Insure Your Business
Insuring your business might seem like a tedious step in starting your business in Tennessee, but it is necessary to protect your business venture from various assailants, like lawsuits and natural disasters. Some companies are not required by law to have business insurance in Tennessee, but it is still recommended for many situations. Research the business insurance requirements in Tennessee and contact an insurance agency to get a plan in place.
Once you have all the technical components squared away for your new business, it’s time to secure funding for your start-up costs. While some people may have the money already stashed away for this purpose, many need some financial assistance when starting out.
For that reason, it's essential to make sure you've completed your business plan. A business plan is a document that explains all aspects of your business. You can present it to potential investors and other people interested in supporting your endeavors.
When your business plan is complete, you can start researching different funding methods for your type of business and begin your outreach process to the proper audiences. Some examples of funding opportunities for new small businesses are:
- Friends and Family
- Personal Savings
- Small Business Grants
- Other Industry Related Grants (depending on the type of business)
- Lines of Credit
- Angel Investors
- Small Business Loans
- Crowdfunding Platforms like Kickstarter or Indiegogo
Some types of funding might have more strings attached than others, so do your due diligence to weigh the pros and cons of each one.
Now that your business is starting to come together, it is time to obtain employees to get your idea off the ground. You might start by working solo depending on your type of business, but you might need help in specific departments that you don’t know enough about to do yourself, like web design, marketing, sales, production, etc.
Establish the types of employees you need and first look close to home. Is there anyone in your family or friend group that has the expertise to help you? In the early stages of your business, it is advantageous to connect with people that you trust and that have more knowledge than you on the subject.
If you don’t have anyone in your life to fill a specific role, you can start reaching out to freelancers for things like web design, or if you need employees for a brick-and-mortar store, you can post job listings to find the best fit for the position.
Build Your Business Online
In today’s society, a business’s online presence holds a significant amount of weight. Even if you are not fully open yet, establishing yourself online is important to hyping up your business for your grand opening.
A website and social media pages are the most important to focus on. You can easily build a basic website on your own through platforms like Wix, or you can hire a freelance designer on websites like Fiverr or Upwork if you want something more complex or simply do not have the time to build on your own.
Even before your website is finished, your social media pages, like Instagram, Facebook, Twitter, TikTok, Google, etc. should be set up to start attracting potential customers to your business. Even if you are not operational yet, using language like “Coming Soon!” or showing the process of your business startup allows future customers to start engaging with you. This way, when you are ready to launch, you already have a pool of followers to build from.
Starting a Business in Tennessee
Starting a new business venture is a scary but exciting endeavor that can be confusing to navigate the beginning steps of the process. Apply what you learned in this article and any other outside sources to get your idea off of paper and into reality! SouthEast Bank will be there for you when you're ready to discuss your business's financial needs.
Note: Links to other websites or references to services or applications are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site, service or application. SouthEast Bank does not control the content of these sites, services or applications.
Information contained in this blog is for educational and informational purposes only. Nothing contained in this blog should be construed as legal or tax advice. An attorney or tax advisor should be consulted for advice on specific issues.