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Starting a Business in California: The Step-by-Step Guide

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So you’ve decided to start a business in California, congratulations! You’re probably feeling a rush of emotions, possibly including an overwhelming feeling that you don’t know exactly how to start a business in California. It’s no easy feat, but the best approach is to take it one step at a time.

There are several requirements for starting a business in California so that your company can run efficiently, and more importantly, legally. In this guide to starting a business in California, we’ll explain all the steps you’ll need to take to get your business up and running.

Step 1: Choose a business name and structure

When starting a business in California, the first thing you’ll need to do (after coming up with your business idea, of course) is to choose a name for your business and decide on a business structure.

A business can fall into one of several business entity structures. Some common options are forming an LLC in California, starting a sole proprietorship, or a C-corporation. There’s no “best” type of business entity; this will depend on what type of company you’re starting in California, as well as how you want your company taxed and how much risk you want to be exposed to in the event that someone sues your company. In other words, there are serious legal and financial implications tied to this decision, so it doesn’t hurt to consult a business attorney when deciding which structure is best for your business.

You will also need to choose a business name to officially start a business in California. You may have the perfect name in mind, but before you can make it your own, you first need to check to make sure that name isn’t already in use. In California, you need to check the names for limited liability companies, limited partnerships, and corporations. For these structures, the business name must be distinguishable from names already on the record of the California Secretary of State, and in the case of LLCs and corporations, it cannot be misleading to the public.

It’s important to note that each name is only checked against the type of business you’re trying to open, so an LLC name would be checked against already established LLC names. In order to check the availability of your business name, you will need to mail a name availability inquiry letter to the California Secretary of State’s office in Sacramento. This process can be done for free. However, if you frequently check business name availability, you also have the option to set up a prepay account for a telephone service. This option requires a minimum deposit of $100, with a $4 fee for each name you search.

If the business name you want is available, you’ll then need to reserve it. You can reserve a business name for a total of 60 days and to do so, you will fill out and mail the name reservation request form, which costs $10. You also have the option of dropping off the form to the California Secretary of State’s office in Sacramento with the $10 reservation fee plus a $10 handling fee. Or, if you have the prepay telephone service, they’ll automatically charge you $10 for every name you reserve.

Step 2: Create a business plan

Once you’ve decided on your business name and structure, the next step in starting a business in California is to write a business plan. Just like you would draw up blueprints before building a home, a business plan creates the strong foundation from which you’ll build and grow your business.

Your business plan will include everything from the basics, including an overview of the business, what type of business it will be, whether you plan to have a physical location, etc. to the more specific, heftier details like what sort of marketing or sales you have in mind, your financial plan for running the business, and a plan for growth. Be sure to avoid common mistakes such as a lack of risk analysis and unrealistic financials.

The business plan you create can be a roadmap for you to follow as you’re developing your business. It can also be important in your efforts to get funding for your business. Whether you’re looking for a small business loan or an investor, you’ll need to provide your business plan during the application process. If you’re unsure how to get started on your business plan, there are several business plan software options to make the process as easy as possible, and the Small Business Administration also features their own business plan builder.

Step 3: Register your business 

When starting a business in California, you will also need to register your business. The steps to register your business will vary depending on how your business is structured and what type of business it is. The California Secretary of State offers a “Forms, Samples, and Fees” section that outlines exactly what you’ll need to file and how much it will cost to officially register your business.

At this stage, you’ll also need to register as an employer with the IRS and get a federal employer identification number (EIN), also known as a business tax ID number. This is a nine-digit number assigned to your small business by the IRS and is used when filing taxes, applying for a business loan, opening a business bank account, and more.

If you plan on filing a DBA, or “doing business as,” meaning you will use a name other than the legal name you file with California, also called a fictitious name, you’ll need to file this with the county in which your business is located. Filing requirements vary by county.

Step 4: File the appropriate taxes

Starting a business in California also means paying taxes on that business. There are a number of agencies responsible for administering taxes on a state and federal level, as well as state agencies and programs to help you navigate the small business taxes you’re required to pay, like the Franchise Tax Board, the California Tax Service Center, and the California Department of Tax and Fee Administration.

Most businesses will likely have to pay a franchise tax for simply doing business in the state of California. Corporate income tax applies to most businesses as well in the state. Sole proprietors pay income taxes on the money they bring home as personal income. Members of an LLC have to pay income tax on that money, and the LLC has to pay a state tax as well. Shareholders in corporations have to pay taxes on the dividends they get and the corporation is also responsible for its own California corporation taxes. This is one area where your EIN comes into play, as you’ll need to file business taxes separately from your personal taxes in many cases.

In addition to the various California state taxes you as an individual and your business have to pay, there are always federal taxes to be paid to the IRS, as well.

Step 5: Obtain any required business licenses or permits

While the Secretary of State does handle a lot of business-related forms and filings, business licensing and permits is not in the department’s wheelhouse. To obtain any necessary licenses or permits you’ll need when starting a business in California, the CalGold website hosted by the California Governor’s Office of Business and Economic Development is your go-to resource. While this site itself does not issue permits or licenses, it catalogs the appropriate agencies you’ll need to contact. First, select your city or county and your business type.

Once you input that information you’ll get a list of permits and licenses that apply to your new business and resources that are available to help you with setting up your business, plus the contact information for the agencies that oversee them.

Source: California Governor’s Office of Business and Economic Development

To look up licenses, file a complaint, or apply for your own licenses, the Department of Consumer Affairs’ BreEZe online services portal is a great resource.

Step 6: Open a business bank account and explore your funding options

With your business legally ready to open for business, there’s still the question of whether you’re financially ready. Starting a business in California is not inexpensive, especially depending on the type of business you want to open.

First, you’ll want to open a business bank account and potentially get a business credit card, as well. You can read more about the best banks for small business in California here. Keeping your business finances separate from your personal finances is incredibly important. You don’t want your personal financial decisions impacting your business or your business credit score (you can check your free business credit report online). Plus, for tax purposes you want to make sure it’s clear what you spent on your business versus personal spending.

Having a business bank account and credit card—and managing them responsibly—can help boost or establish your business credit score. Building your business credit score can also help your eligibility for certain types of small business loans. If you find you need some extra cash to get your business off the ground, there are several financing options you can explore, even as a new business.

The bottom line

Coming up with a good business idea may be the easy part compared to the steps it takes to actually start a business in California. And the work doesn’t stop once your business is registered and you have your permits and licenses.

There’s plenty to keep doing after you take the initial steps above; after all, these are just the steps to take if you are starting a business in California. You’ll also want to look into getting small business insurance, hiring employees, creating a marketing plan to get the word out about your new business, finding a location if you’re going to need a physical store or office, and more.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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Everything You Need for Starting a Pressure Washing Business

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If you have an entrepreneurial spirit and feel ready to go into business yourself, the pressure washing business could be the best option for you.

Starting a power washing business doesn’t require lengthy learning and the startup costs are relatively low. Since the demand for such services is always high, this business can provide a solid flow of income if mastered and managed properly.

Like any other business, a successful power washing business requires proper preparation and planning and this article offers a step-by-step guide for embarking on such an entrepreneurial journey.

Research the Market

Doing some in-depth research about the pressure washing market, what customers you want to target, and how many similar businesses are already operating in your area is essential. Even though this business is expected to register decent growth in the coming years, you should still dig a little deeper to see if there’s more work than the existing pressure washers can take on.

You can choose to focus on residential accounts or take on commercial clients. If you feel that you can manage more work, explore opportunities for pressure washing in surrounding neighborhoods and towns.

Proper research and identifying what opportunities exist is a crucial step in establishing a flourishing pressure washing business.

Get Your License

The moment you decide that this type of business is a golden opportunity, you need to check the local requirements for doing business as a pressure washer.

Depending on the state you live in, you may or may not need a business license. However, you should apply and obtain one before getting started as it will cover you legally. Make sure to check with your local authorities on what the rules and regulations are to stay on the right side of the law. 

This is also a major plus when attracting potential customers as they’ll feel more comfortable and it will help establish trust in your business. It may also help in meeting the requirements of other parties, such as vendors, who might want to see your license before deciding to do business.

Get Insurance

Even though it sounds easy to start a pressure washing business, make sure that you develop the proper skills on how to pressure wash without destroying the surrounding area, damaging your client’s siding, and causing an injury to yourself or somebody else.  

However, accidents happen, so in order to protect your new business from claims of negligence, injuries, accidents, financial risks, and legal fees, you should purchase insurance coverage. Nowadays, insurance companies can provide you with a quote for pressure washing insurance online, so you don’t have to waste time standing in lines.

Not only is pressure washing insurance a safety net for your business, but new potential clients will also take this as a positive sign that you’re a professional who takes their job seriously and ensures customer satisfaction.  

Choose Equipment

Depending on your service offering and scope, the type of equipment you’ll need might vary. If you only intend on working for residential clients, then you’ll be good to go with a pressure washer with a force of up to around 4,000 PSI, but for commercial work, you’ll need stronger equipment that offers more functionalities. Since this business is physically demanding, choose equipment that is fast but safe and helps you get certain jobs done efficiently.

Practicing also plays a big role as you don’t want to accidentally damage someone’s landscape while power washing their siding. Regardless of how technologically advanced your equipment is, not knowing how to efficiently handle it can get you bad reviews and cause unwanted accidents and lawsuits.

Before making any big investments, rent a pressure washer and practice on your friends’ patios, or driveways as this will give you the best hands-on experience.

Price Your Services

Once you’re done with all the administrative work, decide on your pressure washing service prices. Since you’re a new business owner, you should start with lower prices while trying to attract new clients.

Test what hourly rate gets you most jobs and try to slowly but surely bump the price up every year as your expertise gets better.

It might feel overwhelming at the beginning but focus on mastering few services first and settle on a rate that works for you. As you improve your skills and your business grows, you can adjust your prices accordingly.

Final Thoughts

Market research, obtaining the right pressure washing insurance, choosing the right equipment, and pricing your services, are all important aspects on the road to becoming a successful business owner.

We’re sure that you’ll be glad to have considered all the above-mentioned steps once your pressure washing business is set up and running.

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A Basic Guide to Starting a Home-Based Business

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Starting a business in 2021 is much easier than it was twenty years ago. With advanced technology and digital marketing, anyone can step into the role of an entrepreneur. In some cases, all you need is an idea and a computer.

Becoming a business owner is a path to financial security. Even if you don’t give up your day job, starting a home-based business can lead to financial freedom down the road. 

Are you wondering how to start a business? Keep reading for an essential guide to getting started.

Choosing a Home-based Business

Choosing a business that’s right for you is vital to your success. You want something you’ll stick to for the long run. The best home-based businesses are those you can operate from the comfort of your home. 

Start looking at things you are good at and research to learn if there is a market for what you want to offer. For example, if you have certification in accounting, you can start a business performing accounting services for other small businesses.

Creating a Business Plan

Like any business, it’s essential to create a business plan. This document outlines what your business offers, competitor analysis, marketing strategy, and financial goals.   

The business plan is a great way to measure success and to remain focused on reaching your goals. If you’re starting a business and require financial backing, you’ll need a business plan to show lenders. 

You can maximize solar savings by creating a green business.

Incorporate Your Business

A home-based business is no different from starting any other business model. You want to incorporate your business to add a layer of protection. It’s also valuable for opening a business bank account. 

Separating your business from your personal assets is essential in growing a business. It will help you build business credit. Plus, if you are ever sued, you don’t want someone going after your personal property. 

Get an ECommerce Website

Once the paperwork is done and your finances are in order, it’s time to get your business website up and running. Most businesses can benefit from an eCommerce website. These websites help grow efficient businesses that do not require a physical location or multiple employees.

With an eCommerce website, you can sell products, take deposits on bookings, and so much more. 

Marketing 

A powerful marketing strategy is essential to a home-based business. Determine which social media platforms have the greatest reach for getting noticed by your target audience. 

Use your website’s blog options and photo storage as a launching pad for the information you’ll share on online platforms. 

Don’t be afraid to try different marketing trends, including digital ads.

It’s Time to Invest in a Business

A home-based business is an excellent investment. Once your business is up and running and turning a profit, consider a second start-up. The potential is limitless.

If you need more great tips and information on business start-up trends, we have you covered. Continue to browse our site and check back often for new content.

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How To Set Up a Successful Electronic Business

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Consumers can purchase a range of mechanical items and parts from an electronics company, such as cell phones, televisions, computers, peripherals, and components. If you aim to create this type of business, you should arm yourself with knowledge so you don’t end up like huge electronic retailers that collapse. Read on!

1.Examine Other Electronic  Businesses

Examine and comprehend the business models of existing electronics businesses before starting your own. This comprises the typical markup on commodities, overall consumer satisfaction strategies, and managing supplier relationships. You’ll need this information to determine competitive store policies and prices. Compare and contrast the success of successful electronics stores with those that have closed or failed.

2.Research Your Interest Area of Establishment

If you’re just starting, you’ll focus on the local industry first. It’s also possible that you won’t be the first to play the electronic game. You may be competing with a lot of other small businesses in addition to big stores.

Make sure you do your homework before deciding where you want to locate your business and whether it is a good idea to do so. If your neighbourhood is densely packed with stores, consider looking on the opposite side of town or imagining how you may stand out. People may be hesitant to go through your doors if you come in and offer nothing more than another store.

3.Obtain The Necessary Permits

Check with your state and city to determine if there are any additional criteria for opening your store. If you repair computers, you may be required to pass a state-licensed test to ensure that you are aware and capable of providing proper care.

You’ll also need to check into various business licenses and other forms of documents to ensure that you’re following all of the rules.

4.Have a Competitive Business Plan

Due to the competitive nature of the electronics retail industry and the high risk of failure, you must develop a comprehensive business strategy that focuses on your competitive advantages. Use the information you acquired from your initial case study in the market and business profiles, as well as any personal experience you have with electronics, to show why your electronics company would thrive. 

If you’ve managed an electronics store, for example, you’ll be familiar with the inner workings of this type of retail operation and may have an advantage over other new stores.

In your plan, you need to include the brands you’ll be selling. You need to ensure that they are of both quality and outstanding market performance. For instance, working with certified wholesalers of closures and boxes, guarantee you offer the consumers new brands that are outstanding.

Also, don’t forget to include other regular but essential products such as lights and screens. This is because it is always good to offer a pool of varied products to your customers.

5.Choose a Brand For Yourself

idea

Your company’s brand is both what it stands for and how it is regarded by the broader public. Your company will stand out from the neighbourhood competition if it has a strong brand.

So, while naming your firm, don’t go with a generic name like most electrical stores these days. Try to come up with a distinctive name because the right name is really important. You can begin by considering the business’s nature. In your absence, your chosen name will operate as an extension of your brand, representing you. Part of your brand representation in what you sell. You can add some wire connectors. They are always widely in demand by everyone.

We recommend checking to see if the business name you want is available as a web domain and securing it as soon as possible so that no one else does.

6.Get Startup Funds

banknotes

For starters, you’ll need thousands of dollars to launch an electronic business in the first few months, with a large portion of that money going for rent. A significant portion of the funds will be spent on getting certain in-demand electrical goods as well as marketing your new business.

Personal cash, such as savings, loans from financial institutions, and borrowing from friends and family who are interested in assisting you in starting your business are all options for raising capital for your business.

7.Promote Your Store

Starting a business takes time and effort, as well as determination and vision. If you’ve already decided to work in this field, you should first check into legal and technical issues. After you’ve successfully achieved the first two responsibilities, you should build your brand and sell it. 

You must stay up with the most recent advances and maintain high standards at all times. It isn’t enough to have good items. To expand and develop revenue, it must be adequately publicized. The advertising team must be ready to provide you with a marketing strategy that will interest the audience.

As a result, the two key techniques of attracting new clients are word of mouth and local advertising. Many electronic stores promote in local media and provide first-time customers discounts and advertising billboards. Keep in mind that customer retention is crucial. Take extra precautions with the newcomer. 

They are your billboards. They are ecstatic and will brag about your store for hours. Be friendly to everyone that walks into the store. It’s more difficult to keep customers than it is to get them.

The Bottom Line

Starting and maintaining a business to its success is not an easy task. You need to be dedicated to the course and understand that however hard things get, you need to surpass them. Electronic stores are quite demanding, but a nice business to invest in altogether. Best of luck!

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