Starting a business is never an easy task. It’s not supposed to be. There’s all sorts of pre-planning that must go into a business before it even makes it out of the idea stage.
And of course, all businesses are different. The licensing that each business requires is going to vary greatly depending on various factors.
Just starting off, a business needs to have a Federal Employment Identification Number, then a business license.
“Baseline, they have to have a business license,” Wildomar Economic Development Director Kimberly Davidson said. “If your headquarters is in Wildomar but you’re a plumber and you do business in Menifee, you’re supposed to have business licenses in both of them.”
But there’s a lot more than that. A food-based business would have to have environmental health permits. An auto-based business would have to have AQMD permits. Depending on the building a new business is going into, permits might need to be approved for improvements.
There are also decisions to make about structure – whether to set up a business as an LLC or a corporation, for instance.
That makes it difficult for the economic development folks at the city halls in Southwest Riverside County to come up with a one-size-fits-all checklist for anyone who wants to open up a new business.
“The industry you get into guides what kind of licensing you need to get,” Murrieta Deputy Director of Development Services Scott Agajanian said. “So you need to know what your industry is and what requirements you need for your specific industry.”
Except you don’t. At least not before starting your business. The most important step, according to Davidson, is just talking to city hall.
The businesses that are the most successful, Davidson said, are the ones that “come in and meet with one of us first, they do some pre-research and they listen to what we say, and they do it exactly how we say to do it.”
It’s possible to go it alone, but it’s not advisable – talking to the economic development department in the city you plan to do business in costs nothing, and going to the experts is the fastest way to get a new business up and running. The economic development departments in cities work as ombudsmans for creating a business, finding a location and growing or expanding.
“Your local economic development people – we are the ones versed in what to do, we are the ones who can walk into our planning department and say, ‘what do you need for this?’” Davidson said.
While it might seem obvious, Davidson, Agajanian and Menifee Economic Development Director Gina Gonzalez said people looking to start a business often skip this step, only to find out later that important pieces of their plan are missing.
Before anything else, it needs to be determined if there’s a need for your business idea
“First question, what’s your business idea, and is there a demand for it?” Gonzalez said.
If a city already has too many of a particular type of business, city hall can give you that information before you get to deep in the weeds.
At the very least, the city should be involved before any property is purchased or leased.
“Before you sign a lease for a property and decide I can put this building in that space, that’s when you should come talk to us, because we can make sure that you’re in the right zoning, that there’s somebody who can service water, that your tenant improvements can actually go through, that there’s not undocumented work that happened before you moved in there,” Agajanian said.
Another important step? Having a business plan. Again, it sounds obvious, but it is a step that is often skipped, Davidson, Agajanian and Gonzalez all said.
“When I go to a room full of businesses, an I’ve done this many many times, I like to ask, how many of you have a business plan, and the answer is about 20%,” Agajanian said. “It’s always about 20%. It doesn’t matter how big the room is.”
Fortunately, there are resources for entrepreneurs to draft their business plans and find out what they’re getting into.
“You can work with SCORE or SBDC,” Gonzalez said. “They’re great resources.”
Gonzalez is referring to the SCORE Association, a network of business mentors, and local Small Business Development Centers. Both SCORE and SBDCs are partially funded by the federal Small Business Administration; most of the help they provide is free of charge.
Using those organizations’ free help to put together a business plan will make everything easier down the line – without a business plan, someone trying to start a new company is basically “going to the grocery store without a grocery list,” Davidson said.
“You’re gonna wander about, you’re probably gonna put extra stuff in your cart that you don’t really need,” she said.
Davidson said she herself has found herself in that same situation.
“For example, when I started my home-based marketing company, I incorporated and it was way overkill,” Davidson said. “I didn’t need to do that, and I wish way back then someone would have told me that because then it would have saved me money.”
And that’s where organizations like SCORE and SBDC, and local city economic development departments are there to help – they can organize that grocery list and even find you ways to pay for the ingredients and what stores to get them from.
Will Fritz can be reached by email at email@example.com.