Starting A Business In Springboro
Dear New Business Owner,
The City of Springboro and the Springboro Chamber of Commerce want to congratulate you on your decision to start a new business and we are excited that you have chosen Springboro as a place to do just that!
Before you get started, there are a few things you may want to consider before you begin. We have attempted to assemble our combined resources and knowledge to make this guide a useful tool for all new businesses and to make them available to ensure that you don’t fall victim to the chaos that is starting a new business.
There are a number of decisions that you will be required to make with regard to business structure, financing, reports, taxes and licenses/permits which you may be required to obtain to properly run your business. We feel that this guide can help you get started on the right foot. However, it would also be in your best interest to review all these issues with a professional business advisor or attorney. This guide is not intended to answer all your questions or replace these professionals, but it is intended to educate a new business owner about some items in which you may encounter.
Once again, congratulations on the beginning of your business here in Springboro and we hope you grow your business to be both prosperous and rewarding.
Christine A. Thompson, City Manager
City of Springboro
Springboro Chamber of Commerce
I. Setting Up Your New Business
The first step in understanding how to operate a business is to understand the rules under which all business must operate. There are a number of responsibilities that you undertake as the operator of a small business, and the following items are meant to identify some of these issues:
1. Obtaining a Federal Employer Identification Number (Form SS-4)
Businesses are required to obtain an Employer Identification Number (or EIN) from the IRS. This number is used to track reporting of the business entity. You can call the IRS and obtain the number over the phone after filling out the form (Form SS-4) as long as you agree to mail the form to the IRS within 24 hours of speaking to them. For more information, you can also visit the IRS website at www.irs.gov.
2. Requirement to collect and remit sales tax for the State of Ohio
Certain types of businesses are required by law to collect and remit sales taxes in the State of Ohio. The collection of sales taxes requires that you purchase a vendor’s license from the County Auditor’s Office. For more information concerning the need for a vendor’s license or charging sales taxes, please contact the Warren County Auditor’s Office at (513) 695-1240 or visit their website at www.co.warren.oh.us/auditor.
3. Filing payroll taxes and W-2’s
If you will be hiring employees, it is imperative that you withhold City of Springboro income tax from paychecks. The City of Springboro has a 1.5% income tax for all persons working within the City. The reporting of payroll usually requires quarterly and/or semi-annual returns as well as the issuance of W-2’s at year-end. For more information concerning the City’s income tax, please call the Tax Department at (937) 748-4343 or click here.
II. Types of Business Entities
Probably one of the most confusing yet important decisions you will need to make is what form of businesses entity do you want your business to be. The following is a brief, non-inclusive, outline of the different types of business entities. Again, it is recommended you consult your business professional or an attorney to advise you as to the right entity for your business:
1. Sole Proprietorship
This is the most common form of business entity. It is an entity where an individual simply runs a business and reports his/her income on their personal income tax return. The revenue and expenses of the business are reported on Federal Schedule C. It is administratively the easiest to run, but carries unlimited liability to the owner, extending to their personal assets.
Partnerships are a form of business whereby there are two owners in the business, and generally, the partners have unlimited liability in their personal assets. Partnerships file informational returns only (Federal Form 1065), as their income/loss is reported on the partners individual tax returns.
3. “C” Corporations
These types of entities are common in business because they allow a number of shareholders to own them and limit liability to shareholders to only what they invest in the corporation. However, “C” corporations can sometimes require a higher level of bookkeeping and record retention and they must be incorporated with the state.
4. “S” Corporations
Referred to as a small business corporation, the “S” corporation tries to combine the advantages of limited liability to shareholders with the advantages of a partnership, with less paperwork. There are a maximum of 35 shareholders allowed.
5. LLC’s or Limited Liability Companies
These entities are designed to offer liability protection to partners in the LLC, but retain the advantages of a partnership. Most of these entities are taxed similar to a partnership, but each individual LLC can be different. Many professionals such as architects, accountants and lawyers have moved to this type of entity as it often provides liability protection to a partner when another partner is negligent.
III. Obtaining Loans or Capital
One of the most important issues that face new businesses is how to obtain cash for the creation and initial operation of the business. One of the most common errors in starting a business is that of being “undercapitalized” or under funded when starting the business. The following is a general outline of where to potentially obtain loans within Springboro or Warren County.
1. Small Business Administration Loans
SBA Loans are administered by the federal government as a lower interest, lower cost way of financing new businesses in the United States. A local financial institution normally underwrites such loans and professionals often provide low or no cost technical assistance to the owners of the business so that the business can eventually generate the funds to repay the loan. For more information concerning Small Business Loans, please visit the U.S. Small Business Administration website at www.sba.gov.
2. Fixed Asset Loans
Fixed Asset Loans are primarily used for the acquisition of machinery and equipment or real estate. They can also be used to purchase existing buildings in which you would operate your new business. Many different entities such as County Corp or the Warren County Office of Economic Development offer these types of loans. Please visit their respective websites at www.countycorp.com or www.co.warren.oh.us/wcoed for more information.
IV. Location of Your New Business
As they say in the real estate world, the most important thing to consider that could make your business grow is “location, location, location”. Once you find the perfect location for your business, you will want to investigate a few pieces of information before you sign a lease or purchase a building.
1. Certificate of Zoning Compliance
Local zoning regulations require that certain businesses locate in certain areas of the town. Portions of the town are zoned for office businesses or retail businesses, while others are zoned for industrial type businesses. For example, if you want to start a machine shop, those types of businesses are typically not permitted near businesses such as general offices or restaurants. Call the Springboro Zoning Compliance Officer at (937) 748-9791 for information regarding the zoning regulations and where you would be permitted to locate your business.
2. Occupancy Permit
State Building Regulations require that businesses locate in buildings that have been approved for their general use. This protects businesses (and their customers) from a fire safety standpoint. Certain buildings are built to house certain specific uses, and some buildings just aren’t compatible for some businesses. In addition, insurance companies typically require businesses to obtain occupancy permits before they will insure the business. Call the Springboro Building Department at (937) 748-9791 for information regarding Occupancy Permits.
3. Sign Permit
One of the biggest issues that new business owners worry about is the signage they want to put out at their location. The City also has regulations regarding signs - how big they can be and where they can be located. It is imperative that you contact our Zoning Compliance Officer BEFORE you purchase a sign(s). The Zoning Compliance Officer will be able to tell you up front how big a sign you can have and where it can be located.
All the local permit forms that you may be required to obtain can be downloaded from the City’s website by clicking here.
BUSINESS RESOURCES ON THE INTERNET
The following Internet sites are good resources for finding more detailed information than what we have provided in the guide. Some of the sites below were referenced in the guide and some are additional resources.
U.S. Small Business Administration
www.sba.gov - Information on starting a business, writing a business plan, how to locate financing, etc.
Warren County Small Business Development Center
www.warrencountysbdc.org - Provides one-on-one business counseling and offers small business seminars.
Internal Revenue Service (IRS)
www.irs.gov - Business tax registration information, filing for tax identification numbers, etc.
Ohio Secretary of State
www.sos.state.oh.us - List of filing forms for starting a business in Ohio.
Ohio Department of Taxation
www.tax.ohio.gov - Business tax guides, business registration, etc.
Ohio Bureau of Workers’ Compensation
www.bwc.state.oh.us - Apply for coverage, search Internet library, file claims, etc.
www.countycorp.com - Information concerning small business loans, community development block grant loans, etc.
Warren County Ohio Means Jobs
www.ohioworkforce.com - Provide assistance with employee recruitment in Warren County.
The Job Center
www.thejobcenter.org - Provide assistance with employee recruitment in Dayton area.
Warren County Economic Development
www.co.warren.oh.us/wcoed - Provides information about local incentive programs and small business loans.
* These websites are listed for references purposes only. The City of Springboro and Springboro Chamber of Commerce are not responsible for the validity of the content contained therein.