Starting a business in The Shires!

Welcome to The Shires of Southwestern Vermont - we are excited that you are taking your first step in creating a business! We are here to support you!

Starting a business can be intimidating, overwhelming - even risky. But here in The Shires of Southwestern Vermont, the prospect of entrepreneurship becomes much less daunting when you consider the community full of resources and support committed to helping you succeed.

With a wealth of guidance, training opportunities, and professional networks on the local, regional, and statewide levels, it’s no surprise that small businesses have a legacy in the Green Mountain state. Here in Bennington county, vibrant town and village centers including downtown Bennington, Manchester, and Arlington have long been lined with shops and services built the Vermont way—from the ground up. And with such close-knit communities nestled in these mountains and valleys, those businesses often find their most significant support from their own friends and neighbors.

Vermont is very interesting as a small but entrepreneurial state - it must be our ingenuity and can-do attitude.  We rank in the Kauffman Report’s top ten for startup activity in smaller states, and New Hampshire ranks 24th. That’s interesting, and tells you something about the culture of Vermont. We live in a place where people are very intentional about where they spend their dollars.  There’s a broad support for local businesses. In The Shires specifically, our bucolic landscape has proven to be an unexpected yet impactful boon to business development.

What do you need to start a small business?

Every successful business started from the ground up. No matter how eager you are to get a product into market, taking the time to create a solid foundation now will help increase the chances of your business surviving long-term. Some of the basic things you may need to start a small business include:

  • Idea backed by market research

  • Business plan

  • Funding and bank account

  • Business structure (corporation, LLC, etc.)

  • Doing business as (DBA) name

  • Employer identification number (EIN)

  • Business location

  • Licenses and permits

  • Insurance policies

What is a good business to start?

A good business to start is usually one that fills an unmet consumer need. Think of any everyday problem that’s yet to be solved or ways to improve an existing solution by making it faster, cheaper or easier to use. Preferably, your idea should be something that you’re passionate about or have some existing level of expertise.

We have some great needs (and requests) in this region. Here are some but the list is not limited:

  • Childcare

  • Trades (carpentry, electrician, plumber, etc.)

  • Food services (bakery, ice cream, maple retail, craftsmanship)

  • Clothing stores

  • Family activities (bowling, movies, recreation)

  • Wedding activities (paintball, axe throwing, adventure sport)

  • Civic centers

  • Attorneys

  • Retail stores

  • Succession-based businesses (taking over for an already established store)

  • Small medical practices

How to start your own small business

Taking an idea to market or making a dream become reality typically takes a series of carefully planned business decisions. While not every business follows the same path, most take some of these steps:

Step 1: Perform market research around your idea

Market research can help you mitigate risk because it lets you know how much of a demand there is for your product or service and the level of existing competition. It also provides demographic information on your target customers, such as their income and where they live.

You generally have two options when it comes to research – review existing sources or conduct your own analysis. Relying on previously gathered data can save you time and money, but it might not be current or specific enough to your target clientele. If you start your research from scratch, you have the advantage of engaging with customers directly through focus groups, one-on-one interviews and surveys.


Step 2: Create a business plan

A business plan explains your goals and how you hope to achieve them. If you need funding for start-up costs, many investors will want to see your plan so they can assess your potential profitability. Business plans can also help you attract partners and employees.

When creating a business plan, you can take a traditional approach or create something lean. Traditional plans have comprehensive details and are often required to achieve a business loan. Lean plans, on the other hand, are shorter and may use more charts than written copy. They’re often ideal for simple business models that plan to start up fast.

Whichever plan you choose for your new business, most include at minimum:

  • A description of your product or service, it’s value proposition and how you plan to market it

  • How much investment you require and the amount of revenue you expect to make

  • Your target audience and the customer experience


Step 3: Finance your business

Start-up costs are one of the obstacles that sometimes prevent people from ultimately pursuing their dream. The good news, however, is that even if you don’t have much money at your disposal, there are several ways to fund your business, including:

  • Bootstrapping: Self-funding is advantageous because you maintain complete control of your business. On the downside, it sometimes comes with the highest personal financial risk.

  • Venture capital investments: Venture capitalists or “angel investors” may be willing to fund your business, but they usually expect membership on your board of directors or some stake in the company. You may need a detailed business plan to secure a capital investment.

  • Small business loans: If you don’t have enough money, but still want to keep full ownership of your business, a loan might be advantageous. Be prepared to show banks and credit unions a comprehensive business plan, as well as your estimated expenses and financial projections.

  • Crowdfunding: Some people invest in a business in exchange for perks, as opposed to a share of the profits or company ownership. Because these perks are usually merchandise or name recognition, your business may need to be in the general consumer product or creative industries to take advantage of crowdfunding.

Step 4: Choose your business structure

How you plan to structure your business – sole proprietor, corporation or something in between – will typically have legal and tax implications for the foreseeable future. That makes this decision a critical one. Some of the more popular business structures are:

  • Sole proprietorship: This is the most common structure for solo entrepreneurs or “solopreneurs.”

  • Partnership: If you are starting a business with one or more individuals, then a partnership structure might be right for you.

  • Limited liability company: An LLC blends the limited liability features of a corporation with the tax efficiencies and operational flexibility of a partnership.

  • Cooperative: A cooperative is a business or organization owned and operated for the benefit of those using its services. Companies in health care, retail, agriculture, art and restaurant industries fall in this category.

  • Corporation: Corporations are more complex from a legal and tax standpoint and are therefore more common among larger companies.

  • S Corporation: Eligible domestic corporations can sometimes avoid double taxation (one tax for the corporation and another for the shareholders) by electing to be treated as an S corporation.

  • B Corporation: B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials. This includes high social and environmental performance measures.


Step 5: Choose your business name

After you’ve determined your structure, it’s time to decide how your business will be recognizable to the public. Your business name should:

  • Reflect your brand and values

  • Convey the services you provide or products you sell

  • Work as a logo and resonate on social media and other marketing platforms

You’ll also want to make sure your business name isn’t already taken. Contact your state filing office or search your state’s online database to verify availability. Even if the name isn’t in use, it may still be protected under trademark, so you may also want to check with the U.S. Patent and Trademark Office’s (USPTO).

Once you’ve settled on a name that suits your organization and confirmed its availability, you should trademark it and purchase a recognizable version of it as a domain name (e.g. GoDaddy). Then, create a presence on social media channels (LinkedIn, Twitter, Facebook, Instagram, etc.) by opening accounts with your business name.

Additionally, some business structures require a doing business as (DBA) name, which is a fictitious or assumed name that’s different from your business entity name. A DBA may sometimes be necessary to open a business bank account.


Step 6: File registration documents

Registering your small business with the government may not always be necessary, but it might avail you to personal liability protection and legal and tax benefits.

Federal registration: Other than a tax ID number, you usually don’t need to register your business with the federal government unless you’re applying for tax exempt status or trademark protection.

State registration: You are required to register in the state where your business was formed and any other states that you operate in, also known as foreign qualification.



Step 7: Apply for EIN or Tax ID

As soon as your business is registered, you want to apply for an employer identification number (EIN) from the IRS. This number is necessary so you can file your federal taxes, hire employees and in some cases, open a business bank account. You can apply for an EIN on the IRS website.

In addition, some states have their own tax ID numbers, which you may need to pay state income tax and unemployment tax. Check with your state for the specific application process.



Step 8: Open a small business bank account

You’re going to need somewhere to deposit all those hard-earned dollars, but what type of account best fits your current requirements and future goals? Given that you’re just starting out, you may need:

  • A simple checking account with no or low monthly fees

  • A bank that offers convenient locations and hours of operation

  • Online banking and mobile apps to help you manage your money on the go

  • Loan products should you need some growth capital now or in the future

  • Here is a list of Chamber member financial institutions to consider

How to open a bank account

After you’ve found a bank that suits your needs, gather the necessary paperwork to open a business account:

  • Official business formation documents

  • EIN or tax ID numbers

  • Business name and location

  • Date the business was established

  • Business owner’s Social Security number, address and date of birth

How to apply for financing

Particularly at the start, you may need to apply for a business line of credit to keep things moving. These short-term loans are useful for bridging temporary working capital needs, such as inventory purchases or operating expenses.

To apply for a line of credit you usually need to provide the bank with proof of revenue. If approved, they may set a limit, which like a credit card, allows for continuous borrowing and repayment within the agreed duration of the loan.


Step 9: Obtain any necessary licenses or permits

Before you open for business, take a moment to make sure that you have all the correct licenses, permits and insurance policies to operate legally. The last thing you want at this stage is to be shut down by a government agency.

Which licenses and permits do you need?

If your business operates in certain industries, such as agriculture and broadcasting, you might need a federal license. Other industries, like health care, typically require professional licenses. Even if you don’t fall into one of these categories, you may need some form of permission to conduct business. Freelancers and consultants, for example, sometimes have to have a home occupation permit.

Which insurance do you need?

Your insurance needs will depend on what type of business you have, but there are also requirements that vary from state to state. Examples of types of insurance you may need to consider include:

  • Workers’ compensation: Mandatory in most states, workers’ compensation provides coverage for on-the-job injuries or illness. Employees typically receive wage replacement and medical benefits in exchange for mandatory relinquishment of their right to sue for negligence.

  • General liability insurance: This insurance usually covers accidents, injuries and claims of negligence.

  • Product liability insurance: Often essential for businesses in manufacturing or distribution, product liability helps protect against financial loss due to a defective product that causes injury or bodily harm.

  • Professional liability insurance: If you provide a service, professional liability, or errors and omissions insurance, helps safeguard you from malpractice and negligence lawsuits.

  • Commercial property insurance: Property damage and loss caused by fire, smoke, storms, vandalism and other events are usually covered by commercial property insurance.

  • Business owner policy: Designed for small and medium-sized businesses, BOP combines general liability insurance and property insurance into a single, more cost-effective policy.

  • Here is a list of Chamber member insurance institutions to consider


Step 10: Choose your accounting and payroll system

Before you make an initial sale or hire your first employee, you most likely need a method of managing your finances and paying the people who work for you. You can tackle these important tasks yourself using spreadsheets, hire an accountant or work with a payroll provider.

If you’re a solo operation or only have a few employees, a manual approach to payroll may save you money. It is, however, time consuming and comes with the most risk because you could be fined for mistakes. Hiring an accountant might give you more peace of mind, but they’re usually expensive and you may lose some control of the process. A payroll provider, on the other hand, is often the best of both worlds, giving you control and risk reduction, while also saving you time.

Payroll providers like ADP offer products that in most cases, can automatically pay your employees, file taxes on your behalf and help you comply with applicable government regulations. Our payroll also seamlessly integrates with many types of accounting software so you can manage your finances from one place. A provider like ADP serves business of all sizes so whether you need payroll for a small business or something larger, we can help. 

Here is a list of Chamber member accounting services to consider.



Step 11: Create a web presence

Since most customers use the internet to search for goods and services, a helpful and attractive website can be an integral piece of your marketing strategy. The ideal web presence should:

  • Engage your target audience

  • Include key terms for search engine optimization (SEO)

  • Display your business logo

  • Have creative content

  • Integrate social media channels

Although there are some platforms that allow you to build a site with little or no development knowledge, it may be worth hiring a professional if you want to present a truly polished image of your business. Look for digital agencies who specialize in helping small businesses because they’re usually more likely to understand your needs and meet your budget requirements.


Step 12: Choose retirement and health insurance plans

You might want to review your health insurance and retirement plan options as soon as possible because they can help you attract employees. Even if you don’t or won’t have employees, you may still want to consider benefits for yourself as the business owner.

How to choose a health insurance plan

When shopping for health insurance, look for a plan that:

  • Meets your desired level of coverage (medical discount, limited or full-feature plan)

  • Complies with the Affordable Care Act (ACA)

  • Offers access to all the services you need (specialists, mental health, etc.)

  • Has co-pays, deductibles or out-of-network expenses within your budget

How to choose a retirement plan

When considering retirement plans, small businesses generally have three options:

  • Simplified employee pension plan (SEP-IRA)

  • Simple IRA

  • Solo 401(k)

Each of these retirement plans has different contribution limits. To determine which makes sense for you, consider your savings goals, the time scale and if you anticipate needing access to the money before retirement. Consult with a small business banker or financial advisor or visit the IRS website for more help making an informed choice.

Here is a list of Chamber member financial planning services to consider.

Let us know if you’re starting a business and how you’re doing!