REQUIREMENT FOR SETTING UP A SMALL BUSINESS

    REQUIREMENT FOR SETTING UP A SMALL BUSINESS    Before moving foward we should know what is small business. 𝒔𝒎𝒂𝒍𝒍 𝒃𝒖𝒔𝒊𝒏𝒆𝒔...

    REQUIREMENT FOR SETTING UP A SMALL BUSINESS

   Before moving foward we should know what is small business. 𝒔𝒎𝒂𝒍𝒍 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 can be defined in many ways as follow..
=> A small business is a privately owned and operated business. A small business typically has a small number of employees.
          𝒐𝒓
=>  A small business is a business which consist of 5 to 49 employees which operates with a sales turnover/revenue of 5 millions Tsh to 200 millions Tsh. and this is in Tanzania,The definition vary from one country to another basing on economic condition of country.


The following are the key requirement for setting up a small business.

 1. Should employ small capital in production.(financial requirement)

As we see in the definition above the capital of small business should be normal so as to meet the requirement of being small business. And examples of the small business is Core Power, Folly Theater e.t.c.

2. Licenses And Permits

Business license and permit requirements vary by location, industry and work to be performed. Small businesses may need a business license issued by the city, county or state. State licenses generally are issued to individuals working in industries, such as real estate, cosmetology, construction and insurance. These personal licenses should be held by employees or owners of a new small business prior to opening. Federal licensing may be required for broadcasters, financial advisory businesses and meat processors. Local licensing requirements can include permits for a physical sign, a fire permit for businesses working with flammable items, pollution control permits and health department permits for food-related businesses. Small businesses will also need a sales tax permit.

3.Legal Structure

After selecting a name and business focus, small businesses should establish the type of legal structure most suited to their potential liability, business size and preferred tax structure. Sole proprietorship businesses are easy to establish and require little paperwork other than business name registration, but owners carry higher personal financial and legal responsibility than other business formats. Partnerships may be a format option for small businesses established by more than one person, but it should be based on a partnership agreement to prevent complications. A small business can form a corporation to minimize personal liability, define ownership and have access to additional financing options. An S-corporation may offer some tax benefits for eligible small businesses.

4. Insurance

Basic insurance requirements vary by state and business activity. Small businesses with employees generally must have workers compensation insurance, pay unemployment insurance taxes and possibly maintain basic disability insurance. Small business may also need property insurance and general, professional or product liability insurance. Financial institutions may require insurance on vehicles, life flood and business interruption insurance based on outstanding businesses loans.

I hope you do  understand the key requirement for setting up a small business, Don`t forget to share this article to other people and subscribe so as to updated on every new posts. 𝑻𝑯𝑨𝑵𝑲𝑺 𝑭𝑶𝑹 𝑹𝑬𝑨𝑫𝑰𝑵𝑮...