Start A Small Business In Maryland

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					Script: How to Start a Business in Maryland
By: Ginger S. Myers, Regional Marketing Specialist for Agriculture and Natural Resources;
University of Maryland Cooperative Extension

Welcome to the Maryland Rural Enterprise Development Center‘s pod casts
“Dream, Plan, Implement” series for business success. This series features
educational programming and information on developing new rural food, farm,
forest and community enterprises in Maryland. The Center provides resources
and support for business development and marketing to rural entrepreneurs,
processors, and new and next-generation farmers.

My name is Ginger Myers and I’m the Regional Marketing Specialist for
Agriculture and Natural Resources with the University of Maryland Cooperative
Extension. While I specialize in marketing, I also work closely with entrepreneurs
in business development. Today, I’d like to share information with you about how
to start a business in Maryland.

Whether you plan to sell processed meats, set-up a produce subscription
service, or open a nursery, you first need to determine whether you are operating
a business or just a hobby.


1. Are you willing to invest the time and effort necessary to plan this
   business, research the profit potential of producing and marketing your
   product, and evaluate your personal and material resources to
   determine if this type of business is a good fit for your family and/or
   your current farming operation?

   Any start-up business takes careful planning. You will need to devote time to
   market research, phone calls, letters, office visits, and a lot of decision-
   making before you turn out your first jar of jelly or can of organic vegetable
   soup. Months or even upwards to a year is not an unreasonable amount of
   time to expect to spend in preparation for opening your business.

2. Who will purchase your product?
   Anyone with a new product or service must know his “target audience” and
   more importantly why they would be willing to purchase his product. What is
   your customer profile? What is their age, sex, income, buying habits, where
   do they live, how much do they spend on related items, where do they shop,
   and even what do they read? This is market research. Do this before
   investing any money into promotional materials, equipment or facilities.

3. What is your product and how will you make it?

   If you want to make a food product for retail sales, with very few exceptions,
   you will not be able to make it in your home. This means that you will either
   have to build your own facility and buy equipment, rent existing facilities and
   equipment, or contract with an existing food processor to “copack” your
   product for you.

   Also, its one thing to make small batches of your product for family and
   friends, but larger production runs demand developing large batch recipes.
   Where can you get professional advice on adjusting recipes and improving
   the shelf-life of your product? What is the shelf-life of your product? Where
   can you purchase the ingredients, packaging containers, labels that make
   your product attractive and safe to the public? This is market research too.

4. Are you aware of the local, state and federal regulations concerning
   your type of business?

   There may be local zoning ordinances or land use restriction that affect what
   kinds of businesses you can operate on your property. You will need to seek
   out training on basic food safety and sanitation procedures that ensure a safe
   food product if you are considering a processed food product. Your product
   will also need to comply with the Food Regulation Standards developed by
   the Food and Drug Administration (FDA). There may be environmental
   regulations, product labeling and assurances, or transportation regulations
   that could affect your potential enterprise

5. Can you make money with this enterprise?

   Key characteristics of many small or start-up entrepreneurial activities is that
   they are “income patching,” where the new enterprise is one of several
   sources of income rather than the owner’s sole source of support. How much
   time and financial resources can you commit to this new enterprise? How
   much will customers pay for your product?

   Knowing what your customers will pay is an important component in
   determining your break-even point. It will help you to determine how many
   units, pounds, or tons you’ll have to sell to break-even. The second part of
     the profitability equation is your cost of production or goods and services.
     You must calculate all your cost, both fixed and variable.

     Remember, the goal is not to just break-even, but to make a profit.

6. Do you consider yourself to be an “agri-entrepreneuer”?

     Risk is an intrinsic part of any business venture and starting a new business
     can be very risky. The costs of the uncertainty that comes with a new venture
     can be staggering in terms of stress on family relations, self- image and
     personal bank accounts.

     This business will demand you sharpen your business management skills and
     write a business plan that includes a detailed marketing plan for your new
     enterprise. This is where you’ll write down the goals for your business and
     how you plan to reach them.

7.   Do you have the necessary capital investment required to fund this new

     Successful businesses start small. With limited funds you may need to look
     at investing ingenuity first, labor second, and money third. Stephen Hall in his
     book titled From Kitchen to Market suggests, “Depending on your approach,
     you can expect to incur minimum start-up costs of approximately $35,000 to
     $100,000 or more for each year for the first three to five years.” This relates to
     a small start-up food processing business, but gives you some sense of
     possible start-up costs for a small business.

     Consider how you will develop your product and markets, work out production
     procedures, and learn the peculiarities of the industry before building
     permanent facilities, hiring labor, or quitting your day job.

     And finally…

8. Do you have a written business plan for your business?

     You need to formulate a business plan and consider how your business will
     be organized. What financing do you need and how will you get it? What
     record-keeping system will you use to track production and sales? How will
     you handle marketing and distribution? All these questions and more may
     sound overwhelming, but there’s help available. You don’t have to do it all
     yourself, but you do need to take on the responsibility to see that all gets
     done. A wide variety of business resource contacts are listed in the last
     section of this manual.
   There’s some controversy about the value of a business plan. Comments run
   from “business plans are useless” to “business plans are essential.” If you
   have someone else write your business plan or you use a pre-programmed
   computer program and guess at the numbers, then the resulting plan will
   probably be useless. But, a business plan that you develop yourself, with
   some review and consultation from an Extension Farm Management
   Specialist or other business management professional, can help you
   systematically think through the steps involved in your business development.
   It is this process of planning that pays dividends.

To help ensure your business' success, it is important that you familiarize
yourself with the basic requirements for starting a business in Maryland.
Regulations and other legal requirements change constantly so check for the
latest version of these documents. An excellent resource for information on
starting a new business in Maryland is available on-line at the Maryland State
Department of Assessments and Taxation at or by calling
that office at 410-767-1340 to request their brochure on starting a business in

This site will provide you information on how to:

   •   Select your business structure
   •   Create or register your business
   •   Select or register your business name and entity
   •   Obtain personal property tax information
   •   Obtain federal, state, county, and local tax information
   •   Check county and local zoning requirements
   •   Obtain all necessary permits and licenses

Starting a business is an exciting and challenging undertaking. But, careful
planning, a good understanding of all “your” numbers, adaptability, and
perseverance are often the keys to a successful business start-up.

For more information on rural business development or assistance in market
planning and development, please contact me at the Western Maryland
Research and Education Center at 301-432-2767 ext.338 or by email at Thanks for listening and please return again to the
Maryland Rural Enterprise Development Center’s site for more timely information
on rural business development opportunities.

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