How to Start and Manage a Home-based Business

How to Start and Manage a Home-based Business is intended to serve as a reference document and in no way attempts to provide all of the information necessary to start or manage a home-based business in Missouri. It is published with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. The advice of an attorney and/or accountant should be sought before entering into any business activity or contract.

For personalized information and assistance, please locate a Missouri Small Business & Technology Development Center  or phone 573-884-1555.

Contentslaptop, plant and coffee cup in home office

Obligations to start and operate
All operating businesses are subject to a number of tax obligations, permit and license requirements, zoning restrictions and other laws at the city, county, state and federal government levels.

Sample home occupation city ordinances
These samples will give you an idea of city ordinances.

Forms of organization and registration
There are four basic forms of business organization: sole proprietorship, partnership, limited liability company and corporation.

State and federal tax requirements
Home-based businesses are also required to secure a sales tax number and submit sales tax on a regular basis to the state. A bond may also sometimes be required.

Specialized professional assistance
Don’t be afraid to call on a professional when the need arises: an accountant, attorney, banker or insurance specialist.

Business insurance needs
My business is in my home. My homeowners insurance covers my business, doesn’t it? How can I make sure my business is properly insured?

Information resources
Agencies and organizations who can help your business.

Market research
It’s vital to get as much information as possible about every aspect of the business you’re entering, because your competitors may already have and use vast amounts of it to succeed.

Marketing your business
Marketing is essential: advertising, public relations, direct marketing, sales promotions, brochures, trade shows, packaging and newsletters. Before even beginning, however, you must have an image to project to potential customers.

The business plan: how to write it
This section has an outline of all material that should be in your business plan.

Keys to record keeping success
It pays to be diligent.

Obligations to start and operate

All operating businesses are subject to a number of tax obligations, permit and license requirements, zoning restrictions and other laws at the city, county, state and federal government levels.

As a future business owner, begin by learning what your obligations will be BEFORE opening your business. After learning the requirements, secure the forms, apply for the licenses and registration numbers and identify all the costs. These costs are not only part of a business’ startup expenses but an ongoing cost of doing business. So place these expenses in your yearly operating budget and create a calendar when taxes and licenses are due for renewal and payment. Here is the IRS Small Businesses Tax Calendar.

General information

Carefully read the information provided by your respective city, county, state and the federal government. Many requirements stem from the legal structure you choose; the type of business you are starting; the estimated revenues anticipated; the number of employees; and the physical location of the business.


City hall is the first place to learn the requirements of the city where you plan to operate your business. Offices within city hall issue zoning clearances, occupational licenses, home-based business guidelines and inform you of your tax obligations per their city.

Occupation license.
Businesses operating in most metropolitan area cities must obtain an occupation license regardless of size, composition or legal structure.

A prerequisite for obtaining a license is usually a zoning clearance. The clearance assures that the location from which the business will operate has the proper zoning. Home-based businesses can legally operate if they meet the home occupation requirements of their city, and each town or city has its own guidelines. Some are vague and others are very specific. See sample requirements at the end of this section. It is important to note that additional clearances may be required. For example, food-serving establishments require health department clearances in most cities.

(Note: Some cities require those representing multi-level marketing companies to obtain home occupation permits and some do not. If you represent a multi-level company, check with your city. Don’t rely on the home office. It is your responsibility, so check directly with your city).

Most occupation licenses are issued on a calendar year basis. The cost of a license may vary by type of business. There may be a flat fee for first registration or prorated based on the number of months remaining in the year. Fees may be based on gross sales, square footage of the business or home-based status.

Businesses selling retail must also obtain a state tax identification number before obtaining a city occupation license from the Department of Revenue. See

Earnings and profit tax.
Some cities require a business to withhold an earnings tax of 1 percent or more on the gross wages, salaries, commissions and all other earned compensation paid to employees living and/or working within its geographic boundaries. The amount withheld from employees’ paychecks must be remitted to the city, usually on a quarterly basis. For the business itself, there may also be a tax on net profits, usually collected on or before April 15 of each year. Contact your local city hall for more information.

Miscellaneous taxes.
Other city taxes your business might be subject to include business personal property tax, real property tax (property owners) and a utility tax based on gross receipts for electricity, natural gas, steam and telephone. Again, contact your local city hall for more information.

Sample home occupation city ordinances

The following are samples only; each location’s ordinances will vary. Some locations have highly detailed requirements and even ban certain occupations. Contact your city hall and request a copy of its requirements.


Business property tax.
The primary county-level registration required is the property tax. Other licenses such as a merchants/manufacturers license may be an obligation depending on the county. Go to your county courthouse physically or electronically for more information on registering your business.

The MO SBTDC offers a free guide, Starting a New Business in Missouri, on the nuts and bolts of operating a business in Missouri.

MO SBTDC counselors can also provide guidance about business registrations and tax requirements. Call 573-884-1555 or get a list of centers online.

State business licenses, fees, permits and regulations 
Some professions are regulated by state boards and require licenses at a personal and/or business entity level. For more information, go to the Missouri Division of Professional Registration.

You can also learn about required license and permits for specific businesses in the Missouri Revised Statutes.

Forms of organization and registration

Legal structure registration

There are four basic forms of business organization: sole proprietorship, partnership, Limited Liability Company and corporation. There are many modifications and variations within these forms, but the key revolves around liability and taxation. In choosing your business structure, consult with both a qualified accountant and attorney familiar with your resources and objectives.

Sole proprietorship

A sole proprietorship is a business owned and operated by one person. It is simple to organize and the initial startup costs are usually less than other forms of organization. The owner is entitled to all profits but assumes all risks and is liable for all debt. Under this form, personal assets may be confiscated to pay business debts.


A general partnership is a business owned and operated by two or more persons. Unless limited by terms of the partnership agreement, action of one partner obligates all partners. Each partner is responsible for 100 percent of all debts unless limited by preparing the partnership agreement. While a partnership can be formed by an oral agreement, the assistance of a lawyer is strongly recommended in preparing a written partnership agreement. Partners share all profits and are responsible for all losses as stated in the partnership agreement.

Limited partnership

A limited partnership is one in which the partners have limited personal liability. It allows investors not actively involved in business operations to be partners without the risk of unlimited liability in a general partnership. A limited partner risks only his/her investment but must allow one or more general partners to exercise control over the business. If the limited partner becomes involved in the partnership’s operations, he/she may lose his or her protected status as a limited partner. The general partners in a limited partnership are fully liable for the partnership’s debts. Every limited partnership must have one or more general partners as well as one or more limited partners. Filing a Certificate of Limited Partnership with the Missouri Secretary of State is required.

Limited Liability Company

The people who participate in and run a LLC are generally known as members. In a partnership they would be equivalent to partners. Unlike a partnership, however, members have no personal liability for what another member of the LLC does or for what the LLC itself does. Members of the company can be actively involved in the management of the business but are shielded from liabilities. A LLC is not a corporation, partnership or trust, but has corporate-like liability protection for the owners and partnership-like flexibility in capital and management structure.

Any person may form a LLC by signing and filing Articles of Organization with the Secretary of State’s office. Creating a LLC generally requires the assistance of a lawyer who has studied this type of business organization and who can shape the LLC to meet the owners’ needs. LLCs must be properly structured and maintained for members to be taxed as if they were a partnership or a corporation.


A corporation is a legal entity established and operated upon meeting certain statutory requirements established by state law. The corporation is liable for all debt. Owners are entitled to all profits of the corporation, but debt liability is limited to the amount of equity the owners have invested in the corporation. The owners of a corporation are the stockholders.

To become incorporated, a business must file Articles of Incorporation with the Secretary of State. The advantages of a corporation are that the life of the business is perpetual and stockholders have limited liability. Corporations are subject to special taxation and are more difficult and expensive to organize than other forms of ownership. Corporate charters usually restrict the type of business activities and corporations are subject to many state and federal controls. Corporations must also adopt of bylaws, observe corporate formalities on a regular basis such as election of directors, obtain an Employer ID number even if there are no employees, file required state and federal estimated tax quarterly, file an annual report and pay an annual fee to continue corporation.

Subchapter S corporation

A Subchapter S provides the legal protection of a corporation but for tax purposes, the income or loss is passed on to the shareholders in proportion to their ownership. To be recognized as a Subchapter S, the corporation must apply to the IRS for S status within 75 days of the business’ formation. Use Form 2553 (PDF). To elect S status, a corporation must:

  1. Be a domestic corporation.
  2. Have only one class of stock.
  3. Have no more than 100 stockholders.
  4. Operate on a calendar tax year or have a business purpose for adopting a fiscal year.
  5. Have only individuals and their estates and certain trusts as shareholders.
  6. All shareholders must be U.S. citizens or residents.
  7. Not be a member of an affiliated group of corporations.

Registration fees for the State of Missouri must be filed with the Secretary of State’s Office.

Sole proprietors and general partnerships must file a fictitious name registration. Fee $7.

Limited Liability Companies file an Application for Registration. Fee $105.

Limited partnerships register the partnership. Fee $105.

Corporations file for a domestic corporate charter by filing articles of incorporation. Minimum fee is $58.

Fictitious name registration

Buddy’s Auto Repair

Anyone who regularly transacts business for profit in Missouri under a fictitious name is required by law to register that business name with the Secretary of State’s office. For a sole proprietorship or partnership, a business name is generally considered fictitious unless it contains the full name (first and last) of the owner or all general partners and does not suggest the existence of additional owners. Use of a name which includes words like company, associates, brothers or sons suggests additional owners and will make it necessary for the business to file and publish the fictitious business name on company letterhead, business cards, in advertising or on its product.

Registering a fictitious name does not offer protection for that name. If someone already has filed the name you are filing as a fictitious name, no notice is given to either party. There could literally be hundreds of companies with the same name. In the case of a corporation, the business name must be distinguishable from other corporate names already on file in the records of the Secretary of State’s office. Go to to search current listings of companies in Missouri. If the name has not been previously registered, you can reserve your corporate name for 60 days for a $25 filing fee while the articles of incorporation are being prepared to be filed.

This does not prevent a national company operating in states other than Missouri from filing a suit if you infringe on their national name, logo or trademark. You may want to do a name or trademark search to ensure the use of the name you select. You may also want to protect that name by establishing a trademark at the state and/or national level.

For the U.S. Patent and Trademark office, visit

Incorporated businesses from another state that plan to do business in Missouri must register as a foreign corporation. The filing fee is $155.

All filing and name registration can be done through the Missouri Secretary of State.

This legal structure table compares forms of business organization and describes some of the advantages and disadvantages.

State and federal tax requirements

Businesses making sales of tangible products and selected commodities and services to the final consumer are required to secure a sales tax number and submit sales tax on a regular basis to the state. Bonds are sometimes required to secure a sales tax number. To make sales tax exempt purchases (usually wholesale businesses) a use tax number is required. A business should carefully review with the state its obligations in these areas before opening a business. Each state has its own peculiar requirements as to what is subject to sales tax and what is not. Increasingly more and more service businesses are required to pay sales tax.

Sales/Use Tax, Missouri Department of Revenue:

Any person or company making retail sales of tangible personal property in Missouri is required to collect and remit Missouri sales tax. It is the business’ responsibility to ensure that sales tax is collected at the correct tax rate. You must have a Missouri retail sales license prior to making sales. If you conduct retail sales without a valid Missouri retail sales tax license, you will be assessed a penalty up to $500 for the first day and $100 for each subsequent day, not to exceed $10,000 in addition to any other penalties or interest that may be imposed. For the first 20 days, this penalty does not apply to persons opening a business in the state of Missouri for the first time.

A bond must accompany the license application. The amount of the bond is based on your estimated monthly gross sales.

Estimated monthly gross sales X your tax rate = monthly tax

Monthly tax (rounded to the next highest $10) X 3 = amount of bond.

Estimated monthly gross sales is the amount of sales you estimate your business will make in taxable sales in an average month. If you estimate your sales to be less than $500 for three months, you may be eligible to file the minimum bond of $25. Any amount over that requires a minimum bond of $100.

Mrs. Jones will be opening a gift basket business in Jefferson City, which has a sales tax rate of 6.225%. Because the business is new and has no history of sales, she has estimated her average gross sales per month to be $5000. Her bond is computed as follows:

$5000 X 6.225% = $311.25
round to the next highest $10 = $320

$320 X 3 = $960 bond

If you can’t estimate your bond, go to the Missouri Department of Revenue Business Tax Registration at for assistance. Business Tax Registration reviews all bond amounts to be sure they are in accordance with Missouri statutes. The following are taken into consideration when determining sufficient bond amounts: previous ownership of business, types of products or services sold, location of business, business hours, operating expenses, etc. Bonds may be posted through a cash bond, surety bond, certificate of deposit or irrevocable letter of credit. Complete information on the types of bonds is included in the Missouri Tax Registration Application.

Craft sellers must charge the sales tax rate at the point of sale. For example, a vendor from Independence who sells at a show in Springfield must charge the sales tax rate for the city of Springfield and note those sales separately on their sales tax report to the Missouri Department of Revenue. If you go to a show in another state, you need to obtain a sales tax number for that state unless the sponsor of the show has obtained a sales tax number and is collecting and reporting for all vendors at the show.

Out of state vendors making sale of goods to the final consumer located in Missouri are required to collect and remit Missouri Vendors Use Tax. They must obtain a Missouri Use Tax License and post a bond.

Registering as an employer with the state.
Every business that employs people will be subject to state withholding taxes for all individuals. Unemployment insurance tax and workers’ compensation are based on specific state requirements. See the chart below for requirements based on your legal form of organization.

Withholding tax number. See for more information.

Unemployment insurance tax. This applies to most businesses having one or more workers on the payroll for 20 weeks during a calendar year, and to businesses paying an employee $1,500 in a given quarter. Contact the Missouri Division of Employment Security.

Workers compensation. All businesses with five or more employees (except agricultural or domestic labor) must provide workers compensation insurance in case of job-related injury, illness or death. Visit Missouri Division of Workers’ Compensation.


Federal employment taxes. Business owners have numerous federal tax obligations, chiefly income, self-employment and employment taxes. To learn about the federal obligations, a new business should obtain Publication 583, Starting a business and keeping records (PDF), which includes information on business expenses and record keeping for taxes. Another helpful booklet is Publication 587, Business use of your home (including use by day care providers (PDF).

Federal Employee Identification Number (FEIN). All businesses that pay wages to one or more employees must apply for an EIN number. This is a different number than a state ID and sales/use tax number. You may apply for an FEIN online, or complete Form SS-4 (PDF).

A sole proprietorship is defined as the business owner, and you do not need to obtain employer identification number if there are no additional employees. Your Social Security number is used in place of an FEIN on tax returns. (See the chart below for Missouri license and tax requirements for small business).

Income tax. Every business files an annual income tax return. Which IRS form to use depends on the legal structure of the organization. Business taxes are estimated and paid quarterly.

Self-employment tax. This is the Social Security tax for individuals who work for themselves, such as sole proprietors and partnerships.

Employment taxes. Any form of business can have employees. If you have employees, the business is required to withhold the federal income tax from employees’ wages and withhold and match the Social Security tax of employees’ wages. The employer submits these dollars to the federal government. No matter what form of business organization, the owner(s) or stockholders of the business are personally liable for payment.

Additionally, employers must pay Federal Unemployment Tax (FUTA) if they pay more than $1,500 in wages or have employees for 20 weeks in a calendar year.

Missouri license and tax requirements for small business

Missouri license and tax requirements for small business
License/ tax Sole proprietor Partnership Limited Liability Company Corporations
Register company name, fictitious name form Yes, unless using business owner’s full name  Required  Required  Required
Sales and use tax #
MO Form 2643
Yes, if retail or wholesale business. No, if service business Yes, if retail or wholesale business. No, if service business Yes, if retail or wholesale business. No, if service business Yes, if retail or wholesale business. No, if service business
Federal or employer I.D. #
Form SS-4
Yes, if employees or you deal in alcohol, firearms, tobacco. No, if no employees Required Required Required
Withholding tax # MO Form 2643 Yes, if you employ anyone. No, if proprietor Yes, if you employ anyone. No, if partner Same as partnership. Yes, everyone is considered an employee of the corporation
Social Security tax Yes, if you employ anyone Yes, if you employ anyone Yes, if you employ anyone Yes, if you employ anyone
Unemployment insurance # Yes, if one or more employees Yes, if one or more employees Yes, if one or more employees Yes, if one or more employees
Immigration law Form I-9 Yes, employees hired after Nov. 6, 1986 Yes, employees hired after Nov. 6, 1986 Yes, employees hired after Nov. 6, 1986 Yes, employees hired after Nov. 6, 1986
Worker compensation (through private insurance company) Construction is with one employee, others five or more Construction is with one employee, others five or more Construction is with one employee, others five or more Construction is with one employee, others five or more
Business property tax (call local assessor) Yes, if included in business assets Yes, if included in business assets Yes, if included in business assets Yes, if listed in business assets
Articles of incorporation No No State Law Requirements for L.L.C. organization Yes
Local business license Yes, from local municipality or unincorporated co. Yes, from local municipality or unincorporated co. Yes, from local municipality or unincorporated co. Yes, from local municipality or unincorporated co.

Helpful publications from the IRS

IRS publications are usually updated each year. Find an index of publications at or

Specialized professional assistance

Many small business owners find it advantageous to learn about all aspects of starting and operating the business, i.e., startup details, financing, marketing, bookkeeping, accounting, taxes, personnel and operations. Then as the business grows and staff needs to be hired, the owner understands the work that needs to be done from personally having learned how.

However, there are circumstances where it becomes necessary to call on such professionals as accountants, attorneys, bankers and insurance specialists for assistance.

A new, small business may consider using a reliable accounting service to provide timely monthly profit and loss statements and assist in setting up the bookkeeping system and providing tax services.

Consult an attorney prior to establishing your business. You will need an attorney if you are planning to incorporate or buy a business or franchise. An attorney should also draw up a partnership agreement.

Your attorney should be experienced in business matters. Ask your banker to recommend a law firm or individual lawyer. Ask other successful business owners whom they use. Be sure to discuss fees in the initial interview, and ask if he/she represents businesses similar to yours. A reputable lawyer will welcome an open discussion. And don’t feel obligated to hire the first lawyer you talk to. Find one you are comfortable with and can trust.

Another way to find a competent attorney is through the Missouri Bar Lawyer Referral Service, operated by the Missouri Bar Association. Their attorneys will confer with you for up to 30 minutes for $25. Visit for more. The Missouri Bar Association has offices in St. Louis, Jefferson City and Springfield.

It’s just good business to let your banker know your plans and keep him/her informed, even if you do not need an immediate or initial loan. You may find a line of credit easier to secure if the banker knows your operation. Before starting up, you must open a business checking account. This is a good time to tell your banker what you have in mind for the future. If you have a long-standing personal history with a bank, that may be your best choice for a business account. However, commercial account fees vary widely from bank to bank. Be sure to compare fees.

Insurance agent
An insurance agent who writes a broad selection of insurance is an important professional for many businesses. You may need broad, comprehensive coverage. Check with a reliable agent about advantages and costs compared with risks for such common coverage as fire, business interruption, automobile liability, workers’ compensation, crime or theft, glass, rent and disability. An insurance policy covering certain liabilities could be greater protection than the assumed protection from being incorporated. See the following article on business insurance needs.

Business insurance needs

My business is in my home. My homeowners insurance covers my business, doesn’t it?

Maybe, maybe not. It depends on your policy. The standard policy gives you “$2,500 coverage for Personal Property at the insured location used at any time or in any manner for business purposes.” What exactly does this mean? Here are some definitions.

1. Personal property
Personal property owned by you as an individual. Property that you bought personally and you use in your business would fall under this definition. Items purchased specifically for your business and written off as a business expense might not qualify.

2. Insured location
This is the address shown on your policy. If you take any of this property away from home (i.e. laptop computer, samples and products for sale) you may not have coverage.

3. Business
Business means any full or part-time trade, profession, occupation or enterprise undertaken with the prospect of financial gain.

Often, a standard homeowner’s policy gives only a limited amount of coverage for property used for a business in the home. Under the liability section of your homeowner’s policy any bodily injury or property damage arising out of your business pursuits is specifically excluded.

How can I make sure my business is properly insured?

1. Check your current homeowner’s policy.
Many insurance companies have modified homeowner’s policies, increasing the limits and broadening the coverage in regards to home-based business.

2. Talk to your agent.
Some companies have endorsements that can be added to your homeowner’s policy to cover your business contents and business liability.

3. Consider a business owner’s policy.
This policy is specifically designed to cover the insurance needs of many small businesses, including home-based businesses. Many times the cost is minimal, depending on your type of business. This policy will cover your business personal property on premises, off premises, in transit and at a temporary location. In addition, it can give you coverage for theft of money on and off premises, coverage for loss of business income and extend liability coverage to expositions and shows.

4. Commercial package policy.
Small in-home manufacturers such as home craft businesses have additional insurance needs that may not be covered under the business owner’s policy. A commercial package policy would give coverage for product liability as well as equipment, inventory, supplies, etc. Again, the cost may be less than you think.

5. Work with an agent who specializes in small business insurance.
Many insurance agents handle primarily home and auto insurance and may not be licensed to sell small business insurance. Your agent should understand commercial insurance and be licensed to sell it. Be wary of any agent who does not take the time to learn about your specific situation and particular business needs.

If you’ve taken the time and risk to establish your own business, you should expect your insurance agent to take the time to see that you are properly protected.

Information resources


Missouri Small Business & Technology Development Centers provide one-to-one counseling at no charge (some fees for special services) and continuing education courses for both the aspiring and existing home business owner.
MO SBTDC (website)
MO SBTDC locations

SBA offices offer entrepreneur guides for 200 specific businesses and access to SCORE (Service Corps of Retired Executives) counselors.

Kansas City
1000 Walnut, Suite 500
Kansas City, MO 64106

St. Louis
1222 Spruce St., Suite 10.103
St. Louis, MO 63103


A business resource in Missouri connecting small business owners and entrepreneurs with hundreds of agencies.

An increasing number of communities feature small business incubators in a university setting or as stand-alone entities. Contact your local SBTDC for more information.

1 Million Cups
A weekly, hour-long session each Wednesday morning featuring small business owners describing their journey. Not a pitch session; two startups present to an audience, then field questions. Cape Girardeau, Columbia, Jefferson City, Kansas City, Sedalia, Springfield and St. Louis all host the free weekly get-togethers (with coffee!).

Home-based business owners can connect, learn and grow with each other through shared entrepreneurial aspirations. The service has many home-based business groups; pick the one right for you. LinkedIn is more professional than Facebook or other social media platforms.

Market research

When starting a new business, it is vital to get as much information as possible about every aspect of the business to be started. Remember that your competitors already have vast amounts of information about their business and the industry. If you have prior experience in the field, you may have a head start on people unfamiliar with the industry.

It should be a high priority for every new startup business to gather as much information as possible — not just during the startup phase but continually throughout the life of the business. From the moment you start to plan your business, collect and save this information. This sheet or notebook should contain articles collected on businesses similar to yours, competitors’ ads, marketing ideas you could adapt, the worksheets presented in this section and any other information you can find to help you plan and implement your business including but not limited to:

Your competition. You may be going up against well-established organizations. How they operate can provide valuable information. Use the Competitive Matrix Chart below to chart your competitors. Include more than three competitors. Be sure to include your own business. Then study the chart. How do you compare to the other businesses? Are there any niches your business could fill?

Your market. The customers you seek may now be doing business with your competition. You need to be able to identify and describe your target markets. Be specific. While anyone might use your product/service, who is the most likely user? Have that person in mind as you complete the chart — “Most likely users of my product/service.” Be sure to complete the bottom section — “Lifestyle/ benefits sought.” This will be helpful when preparing marketing materials.

Trade associations can often provide information regarding characteristics of target markets for certain products or industries. Do some research and find the association that will benefit you most. The National Trade and Professional Associations Directory containing nearly 8,000 trade and professional associations should be in your local library.

The industry and business conditions. Is your business in a new, expanding industry or an old, declining one? Are new businesses being started more than old businesses stopping? Is the economy going to help or hinder your new business — recession, growth, inflation, expansion, etc.?

Sources of information. Every business has different information needs and fortunately, there are a great many sources available for business owners willing to search them out. There are two kinds of information sources:

1. Primary, secured directly by the business owner through:

  • Personal contact and interviews
  • Competitors
  • Customers
  • Employees
  • Your network
  • Mail surveys
  • Clipboard surveys
  • Research by simply walking around
  • Professionals

2. Secondary, published information:

  • Business publications
  • Trade associations
  • Trade/professional journals
  • Government agencies
  • SBA
  • Libraries
  • Chambers of commerce
  • Census Bureau

Competitive matrix chart

Competitive matrix chart

Unique features
Distribution system
Geographic location
Market share

Consumer markets: Most likely users of my product/service

Consumer markets: Most likely users of my product/service

Characteristic Description Other comments
Employment status
(part/full/self, etc.)
Stage of family cycle
Size of household
Geographic location
Lifestyle/benefits sought
(status, security, save time, etc.)

Business/industrial markets:
Most likely users of my product/service

Business/industrial markets: Most likely users of my product/service

Characteristic Description Other comments
Number of employees
Geographic location
Service/sales area
Age of company
Structure of company
Target market of company
Geographic location
Ethnic origin
Benefits sought

Marketing your business

Depending on the type of business you are starting, your marketing might include advertising, public relations, direct marketing, sales promotions, brochures, trade shows, packaging and/or newsletters. However, you must craft the image you want to project to potential customers first. This image will then be reflected in all your marketing efforts. As you develop this image, keep in mind the nature of your product/service, the characteristics of the market you are trying to reach and the goal(s) of your marketing efforts.

1. Define product or service

What business are you in? It may seem unnecessary to write it down, but it will be much easier to proceed if you have clearly defined your product or service.

  • Define your product or service:



2. Niche

Determine a market segment that you can serve well. For example, don’t market yourself as a computer consultant. Rather, find a specialty such as computer consulting for the legal field. Focusing on a niche makes it easier to target your audience, position yourself in an industry and penetrate a market. Completing the competition analysis can help you identify a potential niche not being filled by the competition. Niching involves the selective targeting of customers. Your business might focus on one niche or several. However, be sure not to spread yourself thin and lose focus. Larger companies use niche-marketing — Coke, Diet Coke and Caffeine Free Coke, for example, are targeted at different markets.

  • What is your niche?



3. Determine your market

What is the general description of your target market? Who is likely to buy your product/services? What are their characteristics? You can determine and locate your target market by gathering information from personal observation, the government, chambers of commerce, trade associations, libraries and the media.

  • Describe your target market:



  • How can you locate/reach this market?



4. Name

Your name should identify what you do as clearly as possible. This is not the time for sentiment or hidden meaning. Oftentimes, your business name is the only information available to perspective clients. It is to your benefit to make your product or service as obvious as possible. Consider Baby Baskets Delivered — do you have any doubt what this business offers?

Also keep in mind the message you are trying to convey. Certain services include the owner’s name to reflect a personal touch. Check your competitors. Does your industry tend to do this? Check distant cities for ideas, too. Look to see if there is a certain image your industry tries to emphasize. For example, a look at the auto industry will reflect the customer’s interest in a job well done, i.e. Precision Tune, Premier Automotive, etc.

After you have selected a name, ask people who do not know what your business is for their reaction. Be specific by asking what image it projects. Is it easy to remember? What product or service do they think you offer?

Refer to Fictitious name registration for information on protecting your chosen name.


  • Baby Baskets Delivered
  • Business Overload Services
  • Precision Tune
  • Your name:



5. Logo

Every business should also develop a logo that separates them from the competition. Your logo should make a mental impression in your client’s mind. When your clients (or others) hear or read your company name, a mental image should come to mind. It does not have to be expensive or fancy, but should be well-designed. It might simply be your business name in a typeface that reflects your business image. Logos should be clear, easy to read and convey a desired tone or feeling. Every brand sold in America has its own distinctive logo — why not yours?

  • Your logo:



6. Features and benefits

Whether simply talking about your product or service or preparing brochures and promotional materials, it is easy to emphasize the features. Features are the characteristics or elements of your product or service that remain constant.

For example, a feature might be a color (green) or a delivery method (Federal Express). If features will deliver a benefit to your customer, they are more likely to purchase your product or service. Benefits of the two features mentioned above might be green is a flattering color or Federal Express might provide the needed convenience. The more obvious you can make the benefit to the potential customer, the easier it will be to make the sale. As you address your customers either one-to-one or through promotional materials, think about what motivates them to buy.

Examples of features/benefits include:

Examples of features/benefits include:
Feature Benefit
Airbags Lowered risk of serious injury
Large type Ease of reading
Soft leather shoes Comfort
Mercedes-Benz logo Increased self-esteem or status
Delivery Time-saving/convenience
Airtight Keeps items fresh longer
Portable Easy to transport/take with you
Ruggedness _____________________________
Price _____________________________
Reputation — “25 years in business” _____________________________
Energy-saving model _____________________________
Feature: Air-tight kitchen container Benefit:

  • Keeps food fresh longer
  • Crackers stay crisp
  • Leftovers don’t dry out in refrigerator

List the features and benefits of your product/service:

List the features and benefits of your product/service:
Feature Benefit
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________

Proven motivating factors

In general, consumers want to:

  • Protect health
  • Satisfy an appetite
  • Reduce fat
  • Improve appearance
  • Have beautiful possessions
  • Be an individual
  • Get ahead in business
  • Attract a partner
  • Make money
  • Emulate others
  • Take advantage of opportunities
  • Save money
  • Win money
  • Avoid criticism
  • Keep possessions
  • Win friends
  • Cash in on bargains
  • Avoid pain
  • Influence people
  • Gain social advancement
  • Avoid trouble
  • Gain prestige
  • Win praise/complements
  • Avoid discomfort
  • Be a leader
  • Avoid loss or reputation
  • Enjoy comfort
  • Avoid loss of money
  • Have a happy marriage
  • Enjoy leisure
  • Care for children
  • Attain security in old age
  • Save time
  • Improve education
  • Be creative
  • Enjoy pleasure
  • Avoid worry
  • Be clean
  • Be in style
  • Avoid embarrassment
  • Gratify curiosity
  • Avoid drudgery
  • Be happy
  • Be safe
  • Have fun
  • Be successful
  • Protect their family
  • Be liked
  • Be remembered/significant/important

In general, businesses want to:

  • Increase profits
  • Avoid money loss
  • Reduce expenses
  • Avoid time wastage
  • Avoid losing good people
  • Build good will
  • Attract new customers
  • Reduce bad debts/losses
  • Save time
  • Be respected by peers
  • Avoid legal problems
  • Improve staff morale
  • Be respected by superiors
  • Take advantage of opportunities
  • Be a community leader
  • Have attractive facilities
  • Avoid losing assets/possessions

7. Motto

Your motto is a positioning tool. It should point to your marketplace niche and indicate how you are different from the competition. Like your logo, it should make an impression. When clients hear it, they should instantly know it belongs to your company.


  • Your overall printer
  • Precision graphics
  • Fly the friendly skies
  • Your motto:

8. Tagline

A tagline is a short phrase that explains your business in a nutshell, a short, catchy, concise and stimulating phrase. It can even be related to your motto. You might use a motto, a tagline or both.


Garrett Gardner (full voice – vocal performance trainer)
“Sound like you know what you’re saying, so people will take you seriously.”

Norm Clark (property inspector)
“Let me take the worry out of one of the largest investments of your life.”

  • Your tagline:

9. Colors

Select a color that represents your company and has a positive effect. This color should enhance your professional image.

10. Website

A website is essential in today’s hyperconnected world. Yet some surveys put the number of business without a website at more than 50 percent.

Keep in mind a good website need not have dozens of pages, bright pictures, videos and flashing graphics. A site that clearly conveys who you are and what you are offering is a good start; these days, some services, such as Google, offer free small business sites and can be built by anyone with a basic grasp of the internet. (Learn about Google’s free website offer.)

Purchasing and using your own domain name is professional, smart and inexpensive.

And don’t forget the power of Facebook, LinkedIn, Twitter and other social media.

11. Business cards/stationery/marketing packet

Now that you have selected your name, designed a logo, developed a company motto, selected your colors and written a tagline, you are ready to design a business card, stationery and marketing packet.

Keep in mind:

  • Toward what audience is my message directed?
  • How can I reach that audience?
  • What do I want to communicate (message/image)?
  • Does my message do so?
  • Is my message clear?
  • Is my message appropriate for my audience?
  • Is my image consistent throughout all marketing materials?
  • Does my message encourage action?

Business cards

  • Set the name of your business in a point size larger than any other type on the card.
  • Put the name of your business in a clearly legible typeface.
  • Make the name of your business the most prominent element on the card.
  • Add clip art or simple graphics to make the card more interesting and memorable.
  • Place clip art and/or graphics in the optical center of the card or by having the business name start in that center.
  • Add color to the business card when your budget allows.
  • Put a title after your name, i.e. owner, president, etc. when possible so potential customers will know with whom they are dealing.
  • Place your business phone number, email and website in a less prominent location on your business card. Although this information is essential, it does not create a memorable impression for your business so should be placed lower on the card. People expect contact information on business cards and will look for it.

Getting the word out

Civic involvement
Most employers as well as potential clients look at your civic involvement to determine your credibility. Therefore, it is important that you become active in your community through churches, schools and professional organizations. Whenever possible, this involvement should reflect your areas of professional and personal interest. However, commit to this type of work only when you are sure you have the time to follow through and do it well. It will do more harm than good if you cannot follow through on your commitment or the job is done to a standard below what you have set for paying jobs. Don’t look at this as volunteer work but as an opportunity to market yourself and your business.

News releases
News/press releases are written to announce the start of your business and any other noteworthy event. Many newspapers, web news services, TV and radio stations have forms to submit your news; check outlets in your area. Hold off on paying anyone to write your releases; try your hand at it yourself first. There are many free guides to writing releases online, including:

These are just a few that include step-by-step instructions, checklists and templates.

News articles
Newspaper articles add to your credibility. Remember that news outlets always need content and reporters are always looking for interesting stories, so don’t be bashful about contacting a reporter.

Reporters may be interested in your company for two reasons: 1) unusual circumstances surrounding the start of your business or 2) your expertise could add validity to a feature story.

Don’t wait for them to call you — contact them first and follow that with by meeting in person, if possible.

Ad specialties
Distributing items with your company name and motto can be an inexpensive way to advertise. Pens, letter openers, notepads, etc. can keep your name in front of potential customers. Keep your customers’ needs and habits in mind when selecting these items. Make sure the ad specialty item is useful to them — it needs to be a keeper to be worth your investment.

Advertising — radio and television commercials — can be inexpensive if used properly and if this is an effective way to reach your market. You can contact a broker to buy airtime or you can contact an ad agency to purchase an advertising packet.

Talk shows — The company you purchase airtime from may take an interest in you and book you on a local talk show. However, if they do not do this, be brave and contact the talk show producer, letting him/her know why they should have you on their show. When they schedule you, be sure to send announcements to everyone you know.

One of the best ways to get the word out about your business is through networking. Look for opportunities in your community to network both with other professionals who can help you grow your business and with potential customers. Chambers of commerce are wonderful resources. Your local chamber can provide you with a list of networking organizations as well as the opportunity to network with their members.

Choose your networking organizations carefully. Determine your purpose for joining each group. Will members of a group help you grow as a professional, provide contacts to potential customers or alliances or become customers themselves? There are many networking organizations — carefully select the ones that fit your predetermined goals. You will probably join several different organizations to reach different goals. Once you have identified your reason for joining a group, determine how you can let your talents and expertise be known. This might be through committee work or a leadership position — it won’t be simply by attending each month and introducing yourself. People do business with those they know and trust, and it will take time to develop the relationships you need to gain business. Read networking articles and put the techniques to work at each event — make networking an active not a passive activity.

Your personal commercial worksheet

Your commercial is your opportunity to provide information to create interest and response from prospects. It is not a bunch of boring facts about what you do — rather it is a series of questions and statements designed to communicate how you help others and solve problems. It is the prelude and the gateway to a sale.

  • Name
  • Company name
  • What you do (creatively/briefly)
    (Include the benefit to the customer)

End of basic 30 second commercial.

  • Power question
  • (Ask more follow-up questions until you get the information you need.)
  • Power statement
  • How you help others solve their problems
  • Why prospect should act now

Personal commercial

Let’s say you’re the president of a company that sells advertising specialties.

  • Name … Hi, my name is Jeffrey Gilroy.
  • Company … My company is (I’m the president of) Continental Advertising.
  • Creatively say what you do … We impact your image, create sales and ensure repeat business by providing innovative advertising specialties that keep your name in front of your customers and prospects.
  • Insert your power question(s) … How are you currently using ad specialties? (Variations: What are you doing to keep your name in front of your customers every day? How often do you contact your present customers? What are you doing to ensure that your name is in front of your customers more than your competitors?)
  • Insert your power statement (how you help) … May be modified based on answers to power questions. I think we can help you. We have creative brainstorming sessions with our clients where we bring together a small team of our people and yours. We place various items on the table that relate to your business and the customers you serve. This process creates dialogue that always leads to innovative products that complement your marketing plan and impact your customer’s image of you. Not only is it productive, it’s fun.
  • Why the prospect should act now … Would you like to schedule a brainstorming session, or have lunch first and preview a few items to get a better feel for what I mean?

Use this example to help you write your own commercial. After you write yours, rehearse it. Then go adjust it for the real world. Practice it (more than 24 times in real situations) until you own it.

How to write a business plan

For complete information on writing a business plan, go to Guide to Writing a Business Plan.

Keys to record keeping success

  • Open a business checking account.
  • Pay only from vendor invoice.
  • Pay all bills by check/stamp invoices “paid.”
  • Take petty cash from cash register and complete a petty cash slip.
  • Record check or cash receipts daily on a summary of cash receipts.
  • Endorse all checks immediately.
  • Prepare deposit slips in duplicate and deposit receipts often.
  • Label bank deposit slips completely.
  • Balance bank account monthly.
  • Inventory all items regularly.

More information is available in Record keeping.

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