How to Start a Business in South Carolina
When you decide to begin a business in South Carolina, the first step is to define what kind of business you want to do and your main selling point. For example, knowing that “I want to make and sell coffee” is a good start, but the idea needs to be more fleshed out. “I want to own a drive-thru coffee shop with a unique atmosphere that sells hot and cold beverages” is a much better starting plan.
Research Phase
The next step is to research your potential competitors and your target demographic. For this example, imagine you want to own a medical supply business in a suburb of a large city. If you know that there are three medical supply stores nearby already, you should visit all three for a few minutes and take notes.
First, figure out what you like and don’t like about each place. How could you do it better? Second, think about the kind of people who would visit a medical supply store. What do these stores not have that would better serve their clients that you can provide?
For example, if you see that all three are focused almost exclusively on the elderly but have very little for younger people or athletes, you’ve found what’s called “a gap in the market.” You can then target younger people and athletes with your products and advertising, which provides them with an alternative that could better suit their needs.
Write a Comprehensive Business Plan
Next, you’ll want to take the vital step of writing up a comprehensive business plan that explains what kind of business you want to be in, how you’re going to do it, and why you think it’ll work.
Business plan templates can easily be found online, and the Small Business Administration offers several alternatives that may suit your needs. They also have sample business plans that you can look through as a guide to help you write your own.
Not only will writing everything out help guide your strategies and raise questions you may not have considered, but a proper business plan is vital if you’ll need outside funding from banks, financiers, lenders, family, friends, or anyone else. It’s the best way to explain your vision concisely while reassuring everyone that you have done the research and that your plan is solid.
Choose a Name and a Location
Choosing the right name is an essential part of opening a business, so you want something that’s unique and memorable. You’ll want to do some research to make sure that your name isn’t already taken and that it isn’t too close to an existing name. If your name is William and you were thinking of “Will’s Body Shop,” make sure there isn’t a “William’s” or “Bill’s Body Shop” nearby because that could be confusing to potential customers.
Once you have a name, you’ll need to choose a location for your storefront or office space. If you have competitors, you might want to find a place that’s far enough away to get customers in that area who don’t want to drive to the other side of town.
Obtain a Business License
Under South Carolina law, you must register as a “business opportunity” with the state before you purchase any inventory, product, or service designed to help start your new company, including advertising.
Depending on what line of business you’ll be in, you may also need a retail sales tax license, a business license, an Alcohol Beverage License, or a professional license. The requirements also depend on which city or county your business will be located in, so you’ll want to check South Carolina Business One Stop to be sure.
Secure Financing
For many potential entrepreneurs, this is the most daunting step. They have a great idea and know the perfect place to set up their shop, but they don’t have the money required to put their plan into action. Thankfully, it’s easier than ever to secure the financing you’ll need to open a business.
Your first line of inquiry should be with friends and family since some of them might be willing to contribute some initial startup cash for you. Next, a venture capital firm or angel investor might be willing to stake your business in exchange for a partial ownership stake while also providing mentorship.
You may also qualify for loans, grants, or other financial services from the United States Small Business Administration, NGOs, or other entities. However, many of these have very specific criteria that your business will need to meet, and not everyone will qualify.
For many entrepreneurs, securing a loan from a bank, financial institution, or other lender is the most common way to fund a business. This money typically comes with a grace period of a few months before monthly payments start, giving you time to get your business off the ground.
How Much Financing Will I Need?
The exact amount of money you need to start your business will depend greatly on which line of work you’ll be in. The United States Small Business Administration offers a startup cost calculator that will help you determine how much money you’ll need. They also offer free counseling services to help get you on the right track.
Here is a non-exhaustive list of things that most (but not all) businesses will require that should be considered as part of your startup budget:
• Retail or office space (unless you’re working out of your home)
• Website or digital marketplace hosting
• Computers, industry-specific and accounting software, and other forms of technology
• Office furniture and supplies
• Advertising and promotional costs (digital, social media, print, etc.)
• South Carolina state, county, and local licensing fees
• Inventory for retail sales businesses
• Equipment needed for your product or service
• Employee payroll if the business is not a sole proprietorship
• Business and liability insurance
You may have more expenses than are listed here, and not all of these may apply to your business, especially if it’s an online-only business that operates out of your home. However, these are just a few of the most common costs that should be considered.
Open a Business Bank Account
If you’re running a sole proprietorship where you’re the only employee and your business taxes are calculated on your personal return, you might not think a business bank account will be necessary. However, there are several reasons why businesses of all types should consider opening a separate account.
First, it makes it easier to delineate personal and professional spending, which means you’ll have an easier time determining whether your business is profitable. It’ll also be a great help if the IRS decides to take a closer look at your business.
Finally, it’s a great failsafe in case something goes wrong with your business and you’re found liable for something by the court. By separating your business and external incomes, you can make sure that any garnishment of your business money doesn’t also include income from outside sources.
Advertising and Digital Marketing
After you’ve secured financing and are ready to put your plan into action, the next step is to consider your advertising and marketing strategies. This will depend on several factors, like your location, which industry you’re in, and others.
No matter which industry you’re in, you’re going to need a clean, professional website. Surveys reveal that 77% of small and medium-sized business owners state that their online presence has resulted in increased sales.
Your brand identity is a huge part of your business strategy, and you’ll want to decide how you want to present the company. Are you a tough, no-nonsense business that quotes statistics and writes emotional calls to action, or are you a quirky, fun-loving business that uses memes to attract customers’ attention?
You’ll also want to consider social media as part of your online brand strategy. Paid advertisements on Facebook, Instagram, or X (formerly known as Twitter) can target the demographics most likely to use your products or services. Whether you choose social media or traditional advertising, you’ll still want a page to directly interact with customers and promote any deals or specials you’re currently offering.
Advertising
Speaking of advertising demographics, you’ll want to take the research from your business plan and use it to determine which groups of people are most likely to be your customers. Are you more likely to attract college students or senior citizens?
This is important because your advertising strategy should be targeted at these specific groups. Sponsored TikTok ads are great for reaching people under 30, but if most of your customers are 50 and older, they’ll probably never see them. Conversely, radio ads are a great way to reach the elderly, but younger people won’t be likely to hear them.
If you have a physical business, a billboard is a great investment. If you have no physical presence and are strictly e-commerce, Google AdSense or social media marketing will likely be your best bet.
The Grand Opening
Whether you’re a physical brick-and-mortar business or strictly online, it’s always a great idea to have a grand opening. If you don’t have a physical storefront or office, consider renting a space for a few hours and heavily advertising your launch. It doesn’t need to be somewhere expensive like the Hyatt Regency Ballroom, as long as it’s a place where people will gather to hear you talk about your product or service.
It’s also a great time to announce an introductory special, like 20% off your first month or discounts on certain products. The more customers you get early, the more revenue you’ll take in, which can help you expand in the future. Word of mouth is a great way to advertise, but if people haven’t heard of your business, they won’t recommend it.
Future Steps
Congratulations! Your grand opening event was a success and you’re finally on the path to self-reliance that only owning your own business can provide. Once your business has been established and has a reliable customer base, you can consider expansion.
This can come in the form of larger office space, new employees, a bigger retail sales floor, a new division, or many other options. However, you’ll want to make sure that you stay focused on your core offerings and that you don’t end up stretching the business too thin by trying to do too much.
The right time to expand will depend on several factors, and only you will know when the time is right. For some, you might want to wait until the business is self-sustaining and becomes profitable. However, if you’re struggling after a few months and can’t seem to attract customers, pivoting by way of expansion can be a great method to reach profitability faster.
How American Business Credit Can Help You
No matter how far along you’ve come in the process, American Business Credit can help you receive the financing you need. We’ve helped over 10,000 small businesses get started or expand through our lending programs. Whether you’re just about to start or need an infusion of cash to take your established business to the next level, American Business Credit loans can help make your dreams come true! Just fill out the form on our website, and one of our experienced representatives will reach out to discuss what we can do for you. Contact us, and start your loan process today!
