Usually, a day at work starts at 9 am and end somewhere around 5 pm, but that is if you manage to finish up what you were doing in time. With the world moving at a faster pace each day, it is essential to deliver projects on tight deadlines, which is not always easy to do. But you are given no choice other than staying in the office longer or bring the project home, doing basically, whatever it takes to have the job done on time.
Often this hard work goes unnoticed and you end up back at your desk with no recognition of your effort. How many times have you thought to do things differently, to go on your own and start your own business? Some consider this idea to be far-fetched, but it actually is nothing out of the ordinary.
Being your own boss is something every business person should strive for. Running your own business can bring about many benefits. Finally, you’d be able to work flexible hours, coming into the office whenever you want to. You would also be able to do something you love, build it from scratch and watch it grow into a respectable market player. While the task could be daunting, it comes with a number of benefits that make it a step worth taking.
Since you’ve read so far, you certainly must be interested in starting your own business. This article will focus on the process of setting up a business in the state of Minnesota. However, we urge you to consult an attorney or a business advisor to help you along the way.
Yes, the task at hand might be scary to some, but, if done correctly, it can be a straightforward process. The fact is that there are some questions you have to ask yourself when considering starting your own business. Questions like: do you have the right skills for the job, what is the reason you are starting the business and do you have any doubts about it? Having doubts is normal, but you should work on eliminating them. This is done through preparation which not only includes acquiring the right skills for the job but also doing extensive research before taking on the registration with the relevant authorities in the state of Minnesota.
This research will provide you with essential information on the market conditions: whether the market is booming or it is going through a downturn, whether the supply is outweighing the demand or vice versa. This second scenario can be an opportunity for you, even if you have made up your mind about the market you plan on entering. When you set your sights on a market, before doing any research, owning your own business could turn into a short adventure. It might just happen that you enter a very competitive market that already has ample players battling for a limited amount of customers. In this case, a newcomer, no matter the price or the quality of the products just doesn’t have the reputation to secure its share of the pie.
Researching the market will uncover many things, like niche markets, or markets where demand outpaces supply, with market participants unable to deliver sufficient goods. Such markets are considered the best option for new entrepreneurs to start in, exactly for the reason mentioned above: plenty of demand. If the demand is outpacing the supply, the prices are usually higher and the market is not as competitive. Your goal, in this case, is to find the right supplier that will deliver you quality merchandise you can then resell.
It also comes with another advantage: you are given time to grow your business. With less competition, the business itself will not be as hectic and with the experience, you gather, you’ll be able to process better and get the hang of everything under your own rhythm. Also, these markets allow you to build a customer base and reputation. Once you have all the pieces in place, it is then easier to expand into new markets.
The research will not only show you in what condition the supply-demand relation is, and where the supply is lacking, but it will also give you a fairly precise indication of what the costs of running your business could be. All of this has to be included in your business plan, which is an essential part of your business start-up process, which we will get back to later.
For this reason, however, coming up with a business plan might be a complicated and extensive task to take on with no experience or limited knowledge, and it would perhaps be better to consult an attorney or a business professional who will be able to gather the data and lay it out within a business plan in the best way possible. Once the data is collected, you will be able to look at the potential of your business and determine whether it is sustainable in current conditions, or in other scenarios where the market tightens. Besides costs, you will be able to give revenue and profit projections and find a more defined path for your business. A good business plan can become your roadmap to success.
Another reason a business plan is essential in your business start-up process is the funding. If you know you will require additional funds to get the operation off the ground, you will have to turn to banks and other investment institutions to secure the funding. Without a business plan, this is virtually impossible. Every bank and similar institution will first ask for a business plan. This will give them the insight into your plans, your projections and basically lets them assess if your business is worth investing in. Without a well-developed business plan, your chances of securing funds needed to get your business off the ground are slim.
Now, that you have done all the preparation work, that you’ve found your market, your product, your target customers and you have your business plan ready, it is time to turn to the legal side of the business start-up process and register your business with the relevant authorities in the state of Minnesota.
Like in many states, the legal process of registering a business in the state of Minnesota starts with the office of the Secretary of State. The first step the Minnesota Secretary of State suggests is to choose your business structure.
You have a range of options similar to other states, but these options start with the simplest one and the easiest to set up: sole proprietorship. This business type means the business will be owned and operated by a single person and it has very few regulatory requirements. However, there is no legal distinction between the business and the owner and the owner is liable for all the debts and obligations of the business.
The next structure is the general partnership, which is similar in terms of liabilities to the sole proprietorship. However, it is formed by two or more persons, or entities joining to conduct business. Each partner is liable for all the debts of the business.
Limited partnerships or limited liability partnerships deal with the liability issues a bit differently from general partnerships. These structures protect the owners financially since they are designed in such a way as to limit the amount of personal assets that can be used in order to settle any business debts, and in some instances, personal assets are completely protected.
Corporations operate as separate legal entities that can be set up and owned by one or a number of shareholders. A corporation is the sole responsible for debts and liabilities of the business, protecting its shareholders completely. Downsides of the corporation are its complexity and the cost of setting up.
In order to deal with extensive tax obligations but to still provide liability protection, one could choose to register a limited liability company (LLC). These companies combine the liability protection of a corporation with the tax liabilities of any of the other business structures, even a sole proprietorship.
Choosing one structure is solely a personal choice and can be dictated by the scale of operation you intend on running. It is advised to consult an attorney to help you decide on which structure to use. Mostly, people start up as sole proprietors and then re-register a new structure as their business grows.
Once you choose the structure, you can either register your business through the Minnesota Secretary of State website or by downloading the business registration forms and mailing them in. The address can be found at the end of this article, in the Contact Details section.
You will also have to select a name for your business. This process can be completed during the registration itself since you are required to get an online account through the Secretary of State’s business portal, which will then grant you access to look up business names and check whether the name you intend on using is available. If, on the other hand, you would like to register the name yourself, you may download the Certificate of Assumed name, complete it and submit to the Secretary of State’s office.
With all this done, your next step will be to learn more about the tax obligations of your business and complete the registration of a sales tax permit, if required, and also obtain a Federal Employer Identification Number (FEIN) from the International Revenue Service (IRS).
Before applying for a sales tax permit with the Minnesota Department of Revenue there are some things to consider and determine. First of those things is determining whether you have a sales tax nexus in the state of Minnesota. This means having a seller, a representative, a salesperson, a place of business, or delivering products into Minnesota among others. For a full review of what consists a sales tax nexus in the state of Minnesota read here.
Another thing to determine, which is also part of a sales tax nexus requirement, is whether the services or products you sell are taxable. For the most part, services are not taxable in Minnesota unless you the service you provide includes manufacturing a product. Dealing with tangible products is taxable in Minnesota is taxable. However, there are certain exceptions like baby products, clothing, and over-the-counter drugs.
Your next job is to apply for a sales tax permit with the Department of Revenue. There are several ways you can do it. The fastest and easiest option is to do it online through the Department of Revenue’s e-Services platform. You could also file the registration forms to the DoR, or by phone. Address and the phone numbers are provided in the Contact Details section below.
In general, you will have to provide your Federal EIN, the legal name of your business, or your own name if you are operating as a sole proprietor and haven’t filed for a FEIN with the IRS. You will also have to provide the address of your business, the North American Industry Classification System (NAICS) code, as well as names and social security numbers, if you are a sole proprietor, and social security numbers of all the partners or representatives of the company. You are also required to provide an email address and details of your contact person.
Registering a sales tax permit in the state of Minnesota is free of charge and it usually takes up to 10 business days for your permit to be approved, although the DoR does not specify the waiting period. Also, once you do receive your sales tax permit, you are not required to renew it.
Like a number of other states, Minnesota offers certain exemptions to the sales and use tax. This means you could make purchases without having to pay tax. You may find more information about all the sales tax exempt purchases in the Minnesota Sales and Use Tax Booklet.
In short, if you buy merchandise with the sole intention of reselling it, online or in retail, you might not have to pay tax when purchasing. Purchases made for resale are tax exempt in Minnesota, but you have to provide a Minnesota form ST-3 – Certificate of Exemption to your seller when making a purchase. When making a purchase with the Certificate of Exemption, make sure all the required information has been filled in and the document has been signed. Once you open or print the document, you will see that you are required to provide your personal information, information about your business as well as your Tax ID, among other requirements.
While you are able to make tax-exempt purchases with the Certificate of Exemption, you might also find yourself in a position where you receive the certificate. It is essential to make sure the document has been properly filled in and that the buyer has signed it. The Department of Revenue advises you keep the received certificates on record as you might be required to provide it at a later date to the state in order to verify the exemption.
While this article has provided you with valuable information on how to set up your business, register it in the state of Minnesota and apply for a sales tax permit, we strongly urge you to consult an attorney or a business advisor throughout the process to avoid any potential issues.
Retirement Systems of Minnesota Building
60 Empire Dr., Suite 100
Saint Paul, MN 55103
Business, Lien & Notary Info Phone:
Metro Area: 651-296-2803
Greater MN: 877-551-6767
UCC Email: email@example.com
Notary Email: firstname.lastname@example.org
600 North Robert Street
St. Paul, MN 55146-6330
Phone: 651-296-6181 or 1-800-657-3777
Share on social networks
Kersten works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Kersten works with single pallet, LTL and truckload buyers hand in hand to ensure their businesses stay stocked up with the highest quality merchandise year round.
Schedule a sales callback with Kersten right now and find out how he can help your business profit with liquidation merchandise.
Bid on bulk quantities of returned, overstock and refurbished inventory directly from Walmart
stores and Walmart.com.