by Chris Murray
New Jersey has over 860,000 small businesses based here in the Garden State. If you are hoping to become a business owner yourself, here are some tips for getting started.
- Determine how much money you will need. This is the amount you will need to raise before making any sales – it includes rent; advertising; the initial supplies you need for any products; and the money required for licensing, insurance, and the various fees attached to starting a new business.
- Determine at what point the business will pay for itself. This is called the “break-even” point. How much will you have to do in sales in order to cover all of the various business expenses? How much more will you need in order to support yourself fully from your business alone? How long can you get by without turning a profit?
- Determine where you will get the money for step 1. Do you have the money saved already? Can you get a loan from a bank, credit union, or the Small Business Administration?
- Register your trade name and employment number. The State Of New Jersey and the U.S. Government both require you to register your business. When registering a trade name, note that in New Jersey, the trade name is only protected in the individual county in which you have registered.
- Keep records. Both New Jersey and the IRS require you to file tax paperwork (usually quarterly); both expect you to keep accurate records of your income and/or losses; and both expect that your business pays taxes on time and in full. A decent bookkeeping system, whether written out or on the computer, will allow you to track all of this information.
- Decide whether or not to incorporate. Incorporation has certain benefits, such as limiting your personal liability (and that of your bank account), allowing for different tax deductions, or allowing an easy transfer of the business. It also has certain disadvantages, such as higher taxes, high initial costs, and possible personal liability under certain circumstances.
- Get help if you need it. SCORE is an organization of retired executives who volunteer their time to help new entrepreneurs learn the ropes. The Small Business Administration was designed to help new business owners find their footing. Small businesses make up 99.6% of New Jersey’s total businesses and employ nearly 50% of its workers. The State wants to see small businesses succeed.
- Gale Business: Plan Builder – A digital resource to help you create your business plan. Includes tips for understanding why you’re getting started and how to go further, a LEAN Canvas worksheet for building the plan, and a break-even analysis kit to help with the math.
- Data Axle Reference Solutions – A digital resource for researching the competition. From seeing the profiles of companies in your field, to determining where your competitors are located (and where they aren’t), to seeing what businesses recently failed in your area, Data Axle is a robust tool for research.
- Gale Business DemographicsNow (GBDN) – A digital resource for researching your customer base. GBDN will help you see what potential customers are in your area, how much they spend, what they like to spend it on, and how far they go; and can be limited to a geographical boundary, a radius from a specific spot, or even what is within a 5- or 10-minute drive from a location.
This is a general list only. For more in-depth information, contact SCORE or visit one of the sites linked below.
- business.nj.gov – the State Of New Jersey’s on-ramp for new entrepreneurs looking to get started.
- irs.gov/businesses/small-businesses-self-employed – the IRS’ portal for filing and paying taxes and registering a new Employer ID.
- sba.gov/business-guide – the U.S. Government’s Small Business Administration guide to getting started. It includes the “10 Steps To Start Your Business” guide for determining your best location, finding funding, and more.
- centraljersey.score.org – the home for SCORE in Somerset, Hunterdon, and Middlesex Counties.
- naics.com – where to determine the North American Industry Classification System code for your business, needed when registering with both the State and the Federal governments.