When considering the idea of running a business in California, there are many things to consider. The most significant factor is to research the regulations and business laws required by the state of California. Fortunately, the state offers plenty of resources to help entrepreneurs get their businesses off the ground. This article will provide a comprehensive overview of necessary steps to get your business up and running in California.
Research Your Business Idea
Before taking any action, it is wise to research and evaluate your idea. After all, the success of a business directly depends on how well the idea is received in the marketplace. First and foremost, determine whether or not the services or products you are providing are demanded. Will your small business fill a need in the community? Be sure to explore competitors and study the strategies they have successfully implemented that could benefit your business. An intense and thorough analysis of the particular industry will provide a greater opportunity for success.
Choose Your Business Structure
After researching your business idea, the next step is to establish the type of business structure you opt to use. Different structures come with various responsibilities, like filing appropriate paperwork, registering or trademarks and determining taxes and other considerations. Make sure you choose the business structure that best fits your needs. The five primary types of business structures in California include:
-Sole proprietorships
-Partnerships
-Limited liability companies (LLC)
-Corporations
-Cooperatives
Register Your Business with the State of California
When choosing a name for your business, it is important to make sure it is not already being utilized by someone else. Registering the name of your business with the Secretary of State, as a trademark or a service mark, is the best way to secure it. Registration is a reasonably inexpensive process that can be done in person, by mail or online.
Unlike other states, California requires any owner of an LLC to obtain a Seller’s Permit from the California State Board of Equalization. This permit allows your business to sell goods or services within the state and issue sales tax. A Fictitious Business Name Statement also must be registered with the local county’s Clerk-Recorder’s office if your business does not operate under its legal name.
Obtain Business Licenses and Permits
Depending on the type of business you own and the activities it involves, you could require local, state of federal licenses or permits. For example, service industry businesses must acquire a California Department of Public Health Permit to legally operate in the state. Contact government agencies or consult the California Small Business Portal to determine the licenses or permits you need.
Additionally, you may need to register with the Internal Revenue Service (IRS). This will require an Employer Identification Number (EIN), which is commonly referred to as a federal tax ID. Completing any required licenses, permits and forms correctly is essential for the long-term health of your small business.
Create a Solid Business Plan
Regardless of the size of a business, it is important to have a sound business plan. Your business may require a well-thought-out strategy as you attempt to differentiate your business from the competition. Here are two key points to consider when creating a business plan:
-Define the purpose and goals of your business
-Outline how to manage the day-to-day activities of the business
It is also important to include a Sales and Marketing Plan, Human Resources Plan and an Economic Plan. Each of these plans will develop and support the overall mission of your business. Once complete, the business plan can be used to secure additional financing and present a clear roadmap of the venture’s future.
Open a Bank Account
Once you are legally registered, it is time to look into opening a business bank account. This will allow you to use business activities to separate from personal finances. Additionally, a business bank account will provide a clear picture of your earnings and disbursements, making recordkeeping easier. It will provide evidence for the IRS of your source of income and ensure that any payments you make are made from a legitimate business, reducing the possibility of payment fraud or identity theft.
Gather Important Tax Information
From the beginning, it is important to stay up to date on all tax information. To get an accurate tax bill for the year, it is essential to track all your business expenses, including:
-Rent or mortgage payments
-Utilities
-Travel expenses
-Gifts
-Payroll taxes
Doing so will ensure that you remain in compliance with the IRS and help you to apply for certain deductions.
Find the Right Staff
Once you have all the necessary paperwork in order and a business plan firmly in place, it is time to start increasing your staff. California provides employers a variety of resources to help develop recruitment strategies. Many of the resources are free, and they can save you time and money by helping you hire the right people for the job. Luckily, the staff of the California Small Business Development Center Network offers free consultation services for those seeking assistance with human resources practices.
Market Your Business
Now that you have created a business bank account, arranged the paperwork and hired an excellent staff, it is time to focus on marketing. Fortunately, there are a lot of companies out there that can help you strategize and develop a marketing campaign tailored to your business. In addition, you can always gain exposure online with the use of social media, SEO and content marketing.
Running a business in California can be a time-consuming and tedious process, but it is a process that many entrepreneurs have endured. Through research, planning and a lot of hard work, any entrepreneur can make their business into a success. All the resources and tools mentioned in the article are available to help those interested in starting a business in California.
