Starting From the Right Questions
Opening or growing a small business involves paperwork, money and local rules, and the details depend on the type of business, its location and its structure. This article outlines the common steps and the kinds of organizations that help, so that readers know where to look. It is general information, not legal, tax or financial advice, and rules and programs change. Always confirm requirements with the relevant agency.
Choosing a Structure and Registering
One of the first decisions is the legal form of the business, such as a sole proprietorship, partnership, limited liability company or corporation. Each has different consequences for taxes, liability and paperwork. In New Jersey, businesses typically register with the state through the Division of Revenue and Enterprise Services, and obtain a federal employer identification number from the Internal Revenue Service when they have employees or certain structures. The state’s business portal and the state Business Action Center are intended to guide new owners through these steps. An accountant or attorney can help with the choice, and free guidance from advisers is available as described below.
Local Licenses, Permits and Zoning
Beyond state registration, a business operating in the city usually needs to deal with local requirements. These can include a municipal business registration or license, a certificate of occupancy for the space, health department approval for food service, and inspections for fire safety. Whether a particular use is allowed in a particular location depends on zoning rules, so it is wise to check with the city’s zoning office before signing a lease or buying property. Certain professions and trades also have state licensing requirements.
The city clerk, the zoning officer and the construction or code enforcement office are usual starting points. Because requirements change, call or visit the offices directly, or check their official websites.
Free and Low-Cost Advice
Several kinds of organizations offer counseling to small business owners:
- Small Business Development Centers, supported by the U.S. Small Business Administration with state and university partners, provide confidential advising and training. New Jersey has a network of these centers, including university-based ones.
- SCORE, a national volunteer organization of experienced business mentors, offers free mentoring and workshops.
- The U.S. Small Business Administration publishes guides and lists approved lenders and local resource partners.
- Chambers of commerce and business associations provide networking and sometimes advocacy.
- Community development organizations and nonprofit lenders may offer coaching alongside financing, especially for owners who have had difficulty with conventional credit.
Funding Options
Funding for small businesses comes from many places, and each has trade-offs.
- Personal savings and family support are the most common sources for start-ups, but carry personal risk.
- Bank loans are available to businesses with a track record, collateral or strong credit. Some are backed by SBA guarantees, which can make lenders more willing to lend.
- Community development financial institutions are mission-driven lenders that serve borrowers who may not qualify at traditional banks.
- Microloans are smaller amounts intended for early-stage or very small enterprises.
- Grants are occasionally offered by governments or foundations, but they are competitive and often restricted to specific purposes. Be cautious about unsolicited offers of grants that require a fee.
- State programs. The New Jersey Economic Development Authority has run loan and support programs for small firms in the past. Its website shows what is currently open.
Borrowing involves risk. A realistic cash-flow plan, an understanding of repayment terms and advice from a counselor are sensible before taking on debt. Outcomes for any new business are uncertain, and many small businesses struggle or close, in Camden as elsewhere.
Selling to Government and Large Institutions
Public agencies and large institutions buy goods and services, and there are programs designed to help small and minority-owned, women-owned and veteran-owned businesses compete for that work. Certification processes exist at federal and state levels. Hospitals and universities sometimes have their own supplier diversity or local purchasing efforts. Registration and certification take time, so reading the requirements carefully is worthwhile.
Hiring and Training Help
Small employers may benefit from the career centers and workforce boards that connect job seekers to openings, and some training programs or wage-support initiatives are available to eligible employers. The array of workforce services is described in the article on job training.
Practical Considerations Specific to Place
Location matters. Foot traffic, parking, transit access and the cost of space vary across the city and the region. Prospective owners can learn from the commercial corridors they know, visit with the city’s economic development staff, and consult community organizations about the character of a neighborhood. Waterfront and downtown areas have seen new development, but that does not mean the same market exists everywhere.
Warning Signs
Be cautious about anyone who guarantees funding or profits, asks for a large upfront fee, or pressures a quick decision. Check that advisers and lenders are legitimate by consulting state agencies and consumer protection offices.
Where to Begin
A reasonable first step is to contact a Small Business Development Center or SCORE chapter, together with the city’s offices for licensing and zoning, and the state’s business portal. The article on the realities of running a neighborhood business adds context on challenges owners often describe.