Welcome Y’all: Five Steps for Small Businesses in Tennessee
Size doesn’t necessarily predicate strength when it comes to powering private sector growth. Small businesses account for 63% of the net new private sector growth according a report by the U.S. Small Business Administration. With continued growth in mind, and celebration of National Small Business Week, we offer five considerations for your first-time venture in the Volunteer State.
- Structuring for success
Countless structuring options exist for your business, but the key is to find the one that most aligns with strategic goals and objectives. Minimizing risk and maximizing tax advantage are top priorities for most entrepreneurs and structure determines the ability to accomplish said objectives. Legally structuring your business includes the following options: sole proprietorship, Limited Liability Company, cooperative, corporation, partnership, or S-corporation.
- Creating your domain
In Tennessee, several components account for the creation of an entity: Articles of Organization (also known as a charter), consent actions, operating agreement, federal employer identification number, Tennessee Department of Revenue tax identification number, local tax registration, applicable professional requirements, and annual registration with the Tennessee Secretary of State.
- Mastering your domain
After an entity is recognized by federal, state and local authorities, make sure to fine-tune the details. Create a clearly defined purpose for your venture, and check with the Tennessee Secretary of State for the availability of your business’ proposed moniker. Other considerations include selecting management structure, and location for a principal office.
- Uncle Sam’s draw
The cost of doing business includes a series of tax and fee obligations. Federally, income and payroll taxes are due annually. In Tennessee, the following could be applicable to your venture: Tennessee Franchise & Excise Tax, Tennessee Sales & Use Tax, Annual Tennessee Business Registration, Tennessee Unemployment Tax and Professional Privilege Tax. The neighborhood in which you operate also affects your business tax, privilege tax, and income tax obligations.
- Day-to-day grind and smooth sailing
Establishing best practices for your business requires discipline in day-to -day operations. Top priorities should include a clear plan for banking, transactions, risk management, and property management. And don’t forget—no man is an island. The employees you depend upon will be empowered by clear guidelines, internal controls, and a secure work environment.