Do you want to invest or start a small business in Vermont? If YES, here is a detailed guide on how to start a profitable business in Vermont with no money.
Vermont is a wonderful place to start and run a small business venture, especially due of the supportive communities and the strong and stable economy. Vermont’s small business figures further buttresses the state’s independent, self-reliant character.
Small businesses make up 99% of the state’s businesses, and over 61% of Vermont’s residents are employed by small firms. When compared to its neighbour New Hampshire, where less than half of the population works for small businesses, it’s easy to see how Vermont stands out as an ideal place to start a small business.
One of the big challenges faced by Vermont is the state’s sparse population, hence the need to strengthen tourism in Vermont is highly necessary. Vermont is the headquarters of many major companies including Brookshire’s, UVM Medical Centre – Dermatology, Keurig Green Mountain, University of Vermont, and Casella Waste Systems.
9 Steps to Starting a Small Business in Vermont With No Money
Table of Content
Develop an Idea
Note that every successful business starts with a good idea. You need to know the possible product or service your business can provide that doesn’t already exist on the market. You need to know how your business idea can stand out from what is already in the market.
It’s important you determine your personal strengths and interests: developing an idea that suits your personality and positive traits will provide motivation to put in the long hours necessary in addressing the myriad challenges you’ll face in getting your business off the ground.
Also analyze and determine how to market your expertise: if your business idea is not something you totally believe in and can sell effectively, it will be much harder to succeed.
Do your Research
Note that once you have an idea, the next crucial step is to put it through the wringer and analyze if it’s viable in the market. Take your time to conduct a market research to know if there is a demand for your product/service in Vermont.
You will also need to know who is your target market and if any existing businesses in Vermont offer a similar product/service. Be patient: you’ll only want to proceed with the next steps after determining that a niche exists in the Vermont market for your business idea.
Write a Business Plan
A lot of budding entrepreneurs only write a business plan because the bank won’t loan them money until a business plan is submitted. Although that’s a valid reason, but there is a more important to writing a business plan than just loans.
Writing a business plan gets the ideas out of the entrepreneur’s head and helps to create a roadmap for where they want the business to go. Business planning is a critical element to creating a successful business.
Financials, objectives, strategies, your target market and pitch, etc. Along with being required to secure funding, a professional business plan also supports growth; helps manage cash flow and distinguish fly-by-nights from the ones who are serious. It doesn’t make sense to get started without it.
Register your business with the Vermont Secretary of State
Note that before you start to do business in Vermont, you are expected to register your business with the Vermont Secretary of State.
The Secretary of State’s website offers an Online business Service Centre with guidance to get you started. If you have never owned a business, it’s advisable you start there to learn about trade names, business structures, licensing, permitting, signage, insurance, etc.
Before you can do that though, you have to figure out what type of business structure you want to form: an LLC, S Corp, C Corp, or Sole Proprietorship.
With your initial plan in the bag you can move on to choosing your business structure and registering it with the state. Doing this will a) secure your brand name, b) register it with the state, c) protect your personal assets like house and car.
For sole proprietorships
Whether you use your legal name or fictitious business name as a sole proprietor in Vermont, you must register with the Secretary of State. First, use the Business Name Search provided by the Secretary of State to make sure that your chosen business name is not already in use in the state.
If the name is free to use, or you are using your legal name to do business, you can go ahead and register a trade name with the Vermont Secretary of State. You can file online, or through the mail. However, online registration is preferred. Those that opt to file through the mail must request a form. The filing fee is $50.
For LLCs and corporations
If you plan to form one of these two entities, then you must first assign a registered agent to handle the service of process on the business’s behalf. The registered agent must be a business or individual authorized to operate in Vermont and have a physical address in the state.
Next, run a search to verify that your chosen business name is free to use in the state. After determining that the name is free, you can file the necessary documents to form your LLC or corporation in Vermont. An LLC is created in Vermont through the filing of the Articles of Organization.
The articles can be filed online, or through the mail after a form request. The filing fee is $125.A corporation is formed in Vermont through the filing of Articles of Incorporation, either online, or through the mail (though you must request a form). The filing fee is $125.
Register for a Business Tax Account
If you plan to sell tangible personal property, rent rooms, sell meals and/or alcohol, or hire employees, you must register for a business tax account before doing business. Each tax type—Vermont Sales and Use Tax, Vermont Meals and Rooms Tax, and Vermont Withholding Tax—requires a separate account. You are also expected to obtain appropriate licensing as required.
A business tax license authorizes you to collect Vermont taxes on behalf of the State of Vermont. When you apply for and receive a license authorizing you to collect state tax, you should display it in your business where it can be easily seen by customers (for example, near a cash register or at a front desk).
You must then hold the state tax you’ve collected in trust until you remit it to the Vermont Department of Taxes by the due date. However, if you register online through the Vermont Secretary of State or with the Department of Taxes through myVTax, you will receive your registration and licensing more quickly than submitting a paper application.
Obtain Federal and State Tax IDs
At this point you should obtain a Federal Employer Identification Number (EIN), which is like a social security number for a business and allows you to open bank accounts, handle payroll, and file taxes. Note that for sole proprietorships, an EIN is optional, although it is mandated for corporations and LLC’s. You can apply online for your EIN through the IRS website, or fill out and mail this form.
Every state in the united states indeed has its own laws and taxes regarding businesses. Most businesses in Vermont are expected to register with the Vermont Department of Taxes, and pay state taxes applicable to your business such as Sales and Use Tax, Meals and Rooms Tax, and Employer Withholding Tax.
Businesses can register a tax account through the same application used to register their business with the Secretary of State; however, if your business is already registered with the Secretary of state, but doesn’t have a tax account, you can register for one using myVTax.
Create Business Banking and Credit Accounts
Note that opening a bank account for your business is very important because it allows you to separate company assets from your personal assets, and makes filing taxes a lot easier.
This is a recommended step in Vermont, even if you are operating a sole proprietorship. It’s also an ideal to obtain a credit card for your business because it will help you isolate business expenses and build up credit for your company, which may help in securing investment in later stages.
Acquire the Necessary Licenses and Permits
Although it mostly depends on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. For instance, a restaurant will need a liquor license, and a pawn shop will need a reseller’s license.
The paperwork is indeed a daunting task, but it’s a necessary ordeal that will protect you from fines, lawsuits, and other legal hazards. Note that Vermont does not issue a general business license, although over 40 professions are regulated in the state, and your business may require a license, permit, or certification in order to operate legally.
However, visit the Secretary of State website for a list of professions regulated by the Vermont Office of Professional Regulation. Clicking a profession will give you information on the license necessary to legally operate in the field, and in many cases, you can apply online for them.
Get Adequate Insurance
Irrespective of the type of business you form, obtaining adequate insurance coverage to protect yourself in the case of property damage or legal action is a good idea and highly recommended in Vermont.
In fact, businesses with employees are required by the federal government to have two types of insurance, while others are strongly encouraged, or required at the state level, depending on your business type. Consult with a licensed insurance agent to find out which types of insurance you should get.
In Vermont, you will notice rather quickly that there are no roadside ads in Vermont. There wasn’t even a Wal-Mart until the late 90s and you still can’t find a McDonalds near the capital. This is because no one in Vermont (and most of modern consumerism in general) wants to be bothered with conventional, mindless, mainstream corporate advertising.
What these people really respond to is a mixture of well-timed functionality, meaning getting the right product at the right time when it’s needed, and humanity! Make your marketing personal and leave the sales-speak out! Be sure to do some research on which type of marketing is the most effective for your industry.