Before you start your business, you’ll need to sit down and write out a detailed business plan. This plan will help get you organized, and you’ll want to include information on factors like your target market, the types of products you’ll offer, suppliers, menu items, and more. If you need to apply for financing from a bank or investor, this business plan will be an essential element of your application. Multiple sources have also found that taking the time to develop a business plan increases the chance of a business being successful.

Related: How to write a business plan

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a smoothie business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Your smoothie business’s location can be a key aspect of its success. If you’re building a brick-and-mortar business, you’ll want to carefully consider where you position your store. A leased space in a high foot traffic retail area or shopping mall can bring in lots of walk-in traffic, but these spaces tend to cost more, too. A store with a drive-through window can be particularly valuable, especially if you’re marketing to busy customers who seek out smoothies for their convenience or as a meal replacement.

If you’re planning to operate your business out of a truck, you’ll still want to put some consideration into the area that’s best for your marketing. Doing some market research into the area and any competing businesses can help you decide which location will give your business the best chance of success.

Related: Choosing a business location

Because a smoothie business involves handling food, you will also need to complete safe food handling training and earn proper licensure or certification, as required by your state. There are also a number of regulations that will need to be followed by your local health department in addition to regular inspections.

Your smoothie business will also need to obtain general local, state, and federal business registrations such as a local business license, sales tax permit, Employer Identification Number, and Occupancy Permit.

Related: Common business licenses, permits, and registrations by state

Starting a smoothie business can require a significant initial investment, but finding financing can help to cover those initial costs. If you’re applying for a small business loan, you’ll need to have good credit. You should also plan to invest your own money in 15-25% of the start-up costs.

Related: Finding the money to start a business

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

You’ll need to rely on marketing to build up your initial customer base and continue bringing in new customers, and a detailed marketing plan can help you determine the steps you’ll need to take. Potential marketing techniques include social media marketing on Facebook, Instagram, and Pinterest showing off your creations, digital marketing on Google and Yelp, radio advertising, direct mail, print advertising, and more. Establishing a customer loyalty program can also encourage repeat customers.

Related: Low-cost ideas to market a new business

There are several types of insurance to consider when starting a smoothie business. A few of these include:
– General liability insurance protects the business against expenses that it might face if a customer is ever hurt while on the property.
– Commercial property insurance helps cover potential damages a business might face if its equipment or building were damaged in an event like a fire.
– Worker’s compensation insurance helps to pay for expenses that a business would face if an employee were hurt on the job.

The cost to insure a smoothie business depends on many factors like the value of a business’ equipment and how many employees are on staff. To get the most accurate idea of what to budget for insurance, request quotes from multiple insurance providers. When evaluating the quotes, consider not only the differences in premiums but also how coverage exclusions, coverage limits, and other factors compare.

Related: What types of insurance does a smoothie business need?

Most smoothie businesses will need multiple employees to cover all shifts and responsibilities. According to PayScale, cashiers make an average of $10.09 per hour, though that can range from $7.89 to $13.21.

In addition to staff salaries, a shop’s budget will need to cover related costs like paid time off and worker’s comp insurance.

Related: Hiring your first employee

Setting up an accounting system is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business