We’re sure by now you have been scouring the internet searching for a simple step-by-step guide explaining how to start a business in Iowa. Not only that, but how do you start one during a global pandemic?! Well, our team at IASourceLink has created a guide to help you start a business during COVID-19! Below is a guide full of resources on our site, and beyond, explaining simple steps you can take right now and come out of this pandemic with a fully operating business!
Disclaimer: IASourceLink, including any of its affiliates or partners, is not at a level to give you complete legal or tax related advice. We can, however, offer different paths you could take in your business journey, as well as connect you to our high quality resources from across the state to answer your most pressing business questions.
Step 1: Write a Business Plan
What’s a business without a business plan? Answer: an unorganized one! It isn’t a surprise that planning a complete business model with projections, customer acquisition costs, and knowing 100% who your target market is is nearly impossible when you are just starting out. But, sometimes in order to receive a bank loan or even a private loan from a family member or angel investor, you need to have a plan in place. Writing a business plan is never the same for each business, but there are some principles that stay the same. Some things to consider in your planning, is where your business will be located, and any local city requirements. A benefit to writing your business plan during a Pandemic, is that you can see how businesses in your industry reacted to the crisis, and what they are doing now to come out on top. Study them, learn from them, and add it to your plan to become stronger .
Connect with one of our resource partners who can assist you put together your business plan.
Step 2: Business Structure and Registration
As we have seen with the COVID-19 outbreak, financial assistance can vary depending on your business structure. When choosing the type of legal structure for your business, you'll need to consider factors such as how you'll pay your taxes and how much personal liability exposure you will risk. Some of your options include a Sole Proprietorship which can cost around $7 to start, Limited Liability Company (LLC) which costs $50 to file and $60 to file your Biennial Reports, Corporation, S Corporation, Partnership, Nonprofit and Cooperative. In general, sole proprietorship's and partnerships need to register with their county recorder’s office. They file what’s called a Trade Name Form. If you decide to incorporate or become an LLC, register with the Secretary of State’s Office (SOS). Visit our page on basics of business entities to learn more.
On our basics of business entities page, you can receive a Step-by-Step guide to starting an LLC in Iowa. This guide includes links to forms, fees, and additional resources you may need. To be sure the business name you’ve chosen is not already in use in Iowa, do a name search in the Secretary of State Business Entities Search database. Due to the current pandemic, and limited staffing at a lot of government agencies, it may take anywhere between 4-8 weeks to receive confirmation your chosen business structure was approved.
Step 3: Get a Tax Identification Number
The free to obtain federal Tax Identification Number for businesses is known as an Employer Identification Number (EIN). It is a unique number used to identify a business, much like a Social Security Number identifies an individual person. In most cases, businesses are required to obtain an EIN. Learn if you need an EIN, and how to get one if you do. Due to COVID-19, and limited staffing at a lot of government agencies, it may take anywhere between 4-8 weeks to receive a copy of your EIN.
Step 4: Register for State and Local Taxes
In addition to federal tax requirements, businesses will need to pay state and local taxes, which may vary from city to city. The Iowa Department of Revenue is the organization who handles state taxes, administers free to obtain sales and use tax permits which you can learn more about and register for directly on their website. Filing frequencies and due dates vary from business to business. Depending on your business, you may not need to collect or pay sales/use/excise tax (view the Iowa Sales and Use Tax Guide for more information). If you aren’t subject to these taxes, you can utilize an exemption form. Due to current pandemic, and limited staffing at a lot of government agencies, it may take anywhere between 4-8 weeks to receive a copy of your tax permit. For more information on tax obligations, check out our Iowa Tax Webinars, and also contact a tax or legal professional who can help.
Step 5: Check for Additional Business Licensing
Iowa alone has over 440 different types of business licenses! To see what types of licenses or permits you may need, search our Business License Information Center for a list of Iowa specific licenses, such as a contractors license. Call 800.532.1216 or email firstname.lastname@example.org for personalized assistance.
Step 6: Understand Employer Responsibilities
Creating a safe workplace has forever changed because of COVID-19. Making sure your workplace is safe for employees and customers will be extremely important moving forward. Check out the the Iowa Workforce Development website to determine the legal steps you need to take in order to hire employees in Iowa, as well as resources for opening a safe and clean work environment:
Step 7: Finance Your Business
Creating and building a relationship with your lender before ever lending from them is a very important step in starting your business. Regardless if you need emergency assistance (like many businesses required during COVID-19 and likely will continue to need), or a loan to expand, do not take this step lightly. Every business requires different amounts, and types, of capital to get started. Learn the fundamentals of funding your business right on our website. We cover various funding opportunities for women, minority, veteran and disabled owned businesses, state financing programs, resources for agriculture, SBA and other banking loans, venture capital, and finally friends/family/crowdfunding.
If our guide on starting a business during COVID-19 did not help answer all of your questions, please contact our team at IASourceLink today!