Checklist for Going into Business in Minnesota
If you are thinking of going into business, or branching out an existing business, here is a helpful checklist as you begin your preparations.
- Prepare a comprehensive business plan. Anyone who extends credit to you (lenders, suppliers, equipment and property lessors) will ask to see it. We have information available at the bank to assist you in preparing a business plan.
- Phone the Minnesota Small Business Assistance Office at (651) 296-3871 or visit the Minnesota Small Business Assistance Office website. Ask for a free copy of A Guide to Starting a Business in Minnesota.
- Thoroughly estimate your start-up costs. These include: rent, supplies, telephone, insurance, opening inventory, license and permit fees, legal and professional fees, fixtures and equipment, decorating and remodeling costs, advertising and promotion costs, salaries and wages, utility deposits, and adequate cash reserves.
- Have a record system in place that keeps track of all of your income and expenses, inventory, payroll records, and tax reports. Have an accountant who will help you with your record system and financial statements (preparation and interpretation).
- Insure your business for property damage, business interruption, key person life, liability, workers compensation, health, and product liability.
- Identify how to price the goods and services you sell.
- Identify your suppliers. Have firm agreements with them in place before you start (i.e. terms, prices, ordering policies, delivery schedules).
- Establish customer payment policies including check cashing and writing, regular payment terms, extended payment terms, and use of credit cards.
- Have job descriptions and work policies in place for all employees. Determine benefit packages, keeping in mind such things as payroll tax, health and/or life insurance, retirement plans, vacation, sick leave, and training.
- Determine the type of business organization that is best for your company -- proprietorship, partnership, or corporation. This will have tax, liability, and management control consequences. An attorney can advise you which type might be best for you.
- Set up a company bank account that is separate from your personal account.
- Register your business name with the Secretary of State's Office. If you are a corporation, file with the Secretary of State.
- Minnesota businesses will need one or more tax identification numbers, including the Federal Employer Identification Number, the Minnesota Taxpayer Identification Number, and the Minnesota Unemployment Compensation Employer Identification Number.
- Businesses engaged in making taxable retail sales or providing taxable services would need a Minnesota Sale and Use Tax Permit.
- The state, counties and municipalities of Minnesota may require one or more licenses for your business. For the state, check with the Minnesota Small Business Assistance Office; for the county and city, check with local government offices about permits and codes (building, fire, health, etc.). Franchise businesses should contact the Minnesota Department of Commerce.
- Make sure that the location you select for your business is properly zoned for your type of business.