How to Start a Small Business in South Dakota (SD)

Best Business Ideas for South Dakota

If all you know about your small business is that you want to start one, that’s ok! Here are some of the best small business ideas for South Dakota to jumpstart your imagination:

• Ninja warrior gym
• Gourmet popcorn shop
• Campground
• Jewelry store
• Lost toy detective

Regardless of what you decide on, you’re going to need to draft a solid business plan.

Planning Processes

Drafting a business plan can be daunting, we get it. That’s why we have a step-by-step instruction guide to drafting up a successful business plan.

1. Playing the name game

Choose a name for your business that is straightforward and doesn’t leave your customers wondering what you do. While there are some rules and regulations for naming your business, don’t let that discourage you. For example, Lost Your Marbles is an excellent name for your lost toy detective business.

2.  Conducting market research

It’s crucial to get to know your market. Do search engine optimization research. Hold focus groups. Conduct surveys. You may find out some surprising things! Lost Your Marbles found out it may not have the customer base it originally thought it would.

3.  Structuring your business

LLC, corporation, nonprofit, partnership, sole proprietorship: which is best? It depends on what your goal is. Registering as an LLC offers favorable tax treatment, while a nonprofit is funded by donations, as opposed to investors. Lost Your Marbles would likely work best as a corporation, LLC, partnership, or sole proprietorship.

Registering in South Dakota

Get all the info you need about your business. Get your business’ name, the employer identification number (EIN), and the name of your registered agent, then file those formation documents. Depending on the structure you choose, you may need different documents.

Congrats: Lost Your Marbles, LLC is now an officially recognized business in the state of South Dakota!

Best Location for Your Business in South Dakota

Before you decide where to place your business’ headquarters, it’s important to determine what your goals are for your business. Do you anticipate growth? Will your small business rely heavily on foot traffic? If so, it’s important to place your business in an area with a high population, such as Aberdeen or Bookings. Whether you decide on a swanky office space downtown or your living room floor, you’re going to need to get the proper documentation.

Lost Your Marbles, LLC decided its best bet is to set up their office space in Bookings.

Banking and Accounting

It’s important to set up a separate business account from your personal ones. This not only helps to protect your personal assets in the event your business is sued, but it helps you manage your business expenditures more easily. It’s also important to consider opening a credit line in your business’ name, as having established credit will make your business more attractive to potential lenders. We recommend hiring a business accountant, as they can help your business save thousands a year.

Ensure Your Business Is Insured

Business insurance is crucial to growing your small business in South Dakota. It’s a way to ensure your business avoids any unknown risks, like an employee stubbing their toe on the property, or a coyote deciding it wants to find his old squeaky toy and getting very emotional about the situation. When chaos happens, insurance can save you from despair. In South Dakota, any company with one or more employees is required to have worker’s comp insurance. Yes, this includes LLCs.

Permits and Licensing

The different licenses and permits you need vary based on the type of business you have and the area in which you are setting up your business’ headquarters. The best way to determine what you need is to conduct a search on a federal and state level and calling your local clerk’s office for necessary local permits.

Hiring Employees

The hiring stage can be the most exciting part of a small business’ life. Carefully choosing the best team members to represent your business can be the first time it begins to feel “real” to an entrepreneur. However, it’s important to ensure your business practices are legal. This includes ensuring you’re registered with the IRS for employee taxes, reporting all of your new hires to the State of South Dakota, and registering for unemployment insurance tax with the State of South Dakota.

Branding

Branding is fun for some, miserable for others. How do you stand out from the rest? First, let’s start with the logo. Make sure your logo is representative of the brand and what you offer, then make sure it’s visually pleasing to your customer. Lost Your Marbles thinks dark and mysterious colors with a vintage font works best to express what they do. You may decide bright, bold colors work best for your brand. There is plenty of software online that can help you if you’re stumped, too.

Branding also requires you to think about what your values are as a company. Do you believe there have been too many toys going missing and someone has to get to the bottom of it? Do you believe missing toys is a part of childhood and there’s no need for an entire business dedicated to finding them? This might seem like an odd example, but it’s necessary to make it clear to yourself as much as to your customer the values your company holds itself to and what it can offer to your customers.

Do some personal reflection and truly embrace what your company believes in. Making sure these points strike home will ensure that your customers are in it for the long run.

Online Presence

In the day and age of social media, having an online presence for your brand is very important. While this can look like having a website and online store (if applicable), this also means needing Facebook, Instagram, YouTube, and TikTok accounts. One of the best things you can do for your business is following trends on social media. It makes you look hip and in-touch, and it will help your business flourish. Get creative!

Marketing

Having an online presence is great, but what about marketing on those platforms? All legitimate businesses have a website. And, if we’re being honest, the less legitimate ones do, too. Unfortunately, social media profiles are not a replacement for a website. Having a professional website makes your brand seem trustworthy and reliable, and allows you to implement better branding.

If this seems to be way too much work, don’t worry! Companies like Ecwid help your store grow and succeed. They can help you create a beautiful, easy-to-navigate website while allowing you to market your products on other online platforms, like the ones mentioned above. Ecwid even allows you to track your digital sales on a dashboard, where you can monitor your inventory. They’ll help make sure your South Dakota small business is the best it can be.