Having a great business idea is the start of your business journey. It’s easy to get excited and jump into forming your business and ordering the business cards, but before moving forward on your idea, I recommend that you take the time to consider a few things first:

1. Think about what type of business you would enjoy doing and have the skills for. Consider your passions, hobbies, and talents, as well as any professional experience you may have. Check out our library of business ideas to get detailed industry information, trends, costs to start, tips, and lots more.

2. Research the local market to determine if there is a need for the type of business you are considering starting. You can also look into existing businesses in the area that offer similar services or products to see how they are doing and what their customer base looks like.

3. Evaluate the competitive landscape to help you identify unique selling points and create a business that differentiates itself from others in the market.

4. Reach out to successful entrepreneurs, industry experts, or business coaches for advice and guidance. They can provide valuable insights, share their experiences, and help you avoid common business pitfalls.

A business plan is essential for any new business venture. While it’s most often thought of as a way for entrepreneurs to secure financing and attract investors, it also provides a roadmap to success, outlining the goals and strategies needed to achieve them.

By outlining your business concept, target market, competitive analysis, organizational structure, financial projections, and marketing strategy, a business plan enables you to establish clear goals, identify potential challenges, and develop actionable steps for achieving your objectives.

A study by Palo Alto Software found that entrepreneurs who complete business plans are nearly twice as likely to successfully grow their businesses or obtain capital, emphasizing the importance of diligent planning in the early stages of a business.

Related: How to write a business plan

A business entity (also called a business structure) is a legal structure under which your business operates, and it significantly impacts your personal liability, taxation, and management. There are four primary types of business entities to consider: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

A sole proprietorship is the easiest type of business to start and is a business that is owned by one person who has full control over all aspects of the business. This type of entity does not provide any personal liability protection for the business owner.

A general partnership is a business owned by two or more people who share responsibility for running the company and are jointly liable for its debts and obligations.

A corporation is a separate legal entity that is registered with the Idaho Secretary of State and can be held legally responsible for its actions. It provides limited liability protection to its owners but requires more paperwork than the other types of entities.

Related: How to form an Idaho Corporation

An LLC combines features of both sole proprietorships/partnerships and corporations in that it provides limited liability protection to its owners (called members) while allowing them to manage the business without all of the administrative burdens of the corporation.

Related: How to form an Idaho LLC

Before starting your business in Idaho, it is essential to research and obtain all necessary licenses and permits to ensure legal compliance and smooth operations. Failure to do so may result in fines, penalties, or the closure of your business. The specific licenses and permits required for your business will vary depending on what your business does and its location.

Common registration requirements for businesses in Idaho include:

Business Licenses: There is no state business license; however, many cities require a business license to operate. Some cities or counties in Idaho may require businesses to obtain a local business license or permit. Check with your local city or county clerk’s office for information on any specific requirements.

Federal Employer Identification Number (EIN): Most businesses are required to obtain an EIN from the Internal Revenue Service (IRS) for tax purposes. This unique identifier is used when filing taxes, opening a business bank account, and hiring employees.

Seller’s Permit: Businesses selling products and certain services will need to register for a Seller’s Permit with the Idaho State Tax Commission.

Assumed Business Name: If you plan to operate your business under a name different from your personal name (sole proprietor and partnership) or the registered name of a corporation or LLC, you must register an assumed business name (commonly referred to as a “Doing Business As” or DBA), with the Idaho Secretary of State.

Professional Licensing: Some services, such as appraisers, collection agents, therapists, driving instructors, and outfitters, require licensing in Idaho.  While this isn’t a license on the business, licensing is required to operate.

Industry-specific Licenses and Permits: Depending on your business’s nature and location, you may need additional licenses or permits from state or local agencies. Examples include professional or occupational licenses, health and safety permits, and environmental permits.

Related: What business licenses and permits are needed in Idaho

Keeping your business and personal finances in separate bank and credit card accounts makes it easier to track the business’s income and expenses. This separation is vital for several reasons:

Simplified financial management: Keeping separate accounts for business and personal expenses makes it easier to manage your finances, track cash flow, and monitor your business’s financial health.

Accurate recordkeeping: Separating your finances enables you to maintain clear, accurate records for tax reporting, financial analysis, and budgeting purposes.

Legal and tax protection: Mixing personal and business funds can jeopardize the limited liability protection provided by certain business structures, such as corporations and LLCs. Separating finances helps maintain this protection and ensures compliance with tax regulations.

Professionalism: In stead of having customers write a check to your personal account, having a dedicated business account enhances your credibility and professionalism.

Opening a business bank account in Idaho is easy and can be done online or at a local branch. The first step is to choose the type of account that best fits your needs. Once you have chosen an account, you will need to provide some basic information about yourself and your business such as name, address, contact information, and tax ID number. You may also need to provide business documents such as articles of incorporation or a certificate of good standing from the Secretary of State. After submitting all the required documents, you will be able to open your account and start using it right away!

Various funding options are available to Idaho small businesses, each with its advantages and requirements. Some common funding options include:

Personal savings: Personal savings is the most common way to fund a business. It’s important to make sure that you have enough money saved up to cover your startup costs and any unexpected expenses that may arise.

Conventional bank loans: Many Idaho-based banks offer business loans to qualified applicants. These loans can be used for various purposes, including working capital, equipment, and real estate. Banks typically require a strong credit score, a comprehensive business plan, collateral, and a personal investment of at least 15% of the total project to secure funding.

SBA loan guarantees: The Small Business Administration (SBA) provides loan guarantees to small businesses that may not qualify for traditional bank loans. These guarantees reduce the risk for lenders, making them more willing to extend credit to small businesses. The SBA 7(a) Loan Program is a popular option for entrepreneurs in Idaho, offering flexible terms and competitive interest rates. To be eligible, businesses must meet SBA size standards and demonstrate good credit history, among other requirements.

Investors: Idaho entrepreneurs can also seek funding from angel investors, venture capitalists, or other private investors. These investors provide capital in exchange for equity or debt in the business. To attract investors, businesses need a compelling pitch, strong growth potential, and a clear exit strategy.

State and local programs: The Idaho Department of Commerce offers various financial assistance programs that provide incentives, tax credits, and loan guarantees to support business growth and job creation.

Demonstrating your commitment to the business through personal investment, providing a well-researched business plan, and maintaining a strong credit score can significantly increase your chances of securing funding for your Idaho small business.

Related: Understanding the different types of business funding.

Hiring your first employee marks a significant milestone in your company’s growth and development.

To ensure a successful hiring process and maintain compliance with state and federal regulations, employers are responsible for reporting new hires, verifying employees are eligible to work in the U.S., income tax withholding, unemployment insurance, unemployment taxes, and payroll withholding taxes, including Social Security and Medicare. In Idaho, a business will register with the IRS, Department of Revenue, Idaho Department of Labor, and U.S. Immigration and Customs Enforcement.

Related: Steps to hiring your first employee in Idaho

Insurance is crucial for small businesses in Idaho, as it provides financial protection against potential risks and liabilities that could otherwise have severe consequences for your business. The right insurance coverage can safeguard your company’s assets, ensure business continuity, and protect your personal finances.

The most common types of insurance for small businesses include property insurance, general liability insurance, professional liability insurance, workers’ compensation insurance, and commercial auto insurance.

It’s important to understand the different types of coverage available and determine which ones are best suited for your particular situation. Working with an experienced independent agent can help you find the right coverage at the right price for your small business.

Related: Types of insurance your business may need

Having a strong accounting system in place is crucial, as small businesses need accurate recordkeeping to stay in compliance with tax regulations, budgeting and planning, and offering insights into the company’s financial performance.

There are a number of ways to manage the accounting for a business, from hiring a professional accountant or utilizing accounting software such as QuickBooks, Xero, or Wave Accounting.

Related: Setting up accounting for a business