Small businesses currently make up 99.6 percent of all businesses in Ohio, and that number continues to grow. Could you be a part of the next wave of local small businesses contributing to the state’s economy?
Perhaps you’ve been thinking about starting your own business for a while. You’ve figured out what you want to do and you’re ready to set the wheels in motion—but you’re just not sure what steps you need to take to actually start.
If that sounds like you, you’re not alone. You need to have all of your paperwork, legal registrations, trademarks, accounts, and other foundational steps are taken care of. But if this is your first entrepreneurial venture, the list of to-dos can be overwhelming.
Read on for seven steps from our expert team to help guide you on your way to opening your own small business in Ohio.
7 Steps for Founding a Small Business in Ohio
Once you have a clear business idea, follow these seven initial steps to ensure you are set up for success when creating a new company:
1. Name your business.
Choosing your business name is a great place to start. You want to select a name that attracts attention, communicates what you do and is easy for customers to remember.
However, you also need to be sure that your clever, catchy business name is actually available for you to use. You should check with the United States Patent and Trademark Office to see that your business name isn’t already in use by someone else in your industry. In Ohio, you should also do a business search on the Ohio Secretary of State’s Business search page.
2. Decide your business’ structure.
With a name in place, it’s important to decide what type of company structure your small business will be set up under: Sole Proprietorship, Partnership, Limited Liability Company (LLC), Corporation (there are different types), Non-profit or Cooperative.
According to the U.S. Small Business Administration (SBA), the business structure you choose influences everything from day-to-day operations to taxes, and how much of your personal assets are at risk. Local business centers have experts ready to help explain the differences between these structures, and what the best fit is for your company to balance legal protections and benefits.
3. Register your business with the state.
Once you know your business name and what type of organization you’d like to open, you’re ready to register your business with the Ohio Secretary of State. You can either file online or mail in your registration.
Doing so officially registers your business as a distinct legal entity with the state, including its name and ownership details.
4. Create a business plan.
Although not a formal requirement by a government agency, a strong business plan is a foundation for any business’ success. This plan helps you create a clear picture of your company’s mission, goals, and financial projections; ultimately how you are going to be successful.
However a documented plan isn’t just a should have, it is also necessary when applying for funding for your small business. Here are two SBA templates to get you started creating your own.
5. Apply for a Federal EIN.
Any new business entity will need to apply for a federal Employer Identification Number (EIN) for the purpose of tax administration. It’s like securing a social security number for your business, as you will need to list this unique identifying number on all of your tax forms.
Fortunately, it’s relatively quick and painless to apply for an EIN online.
6. Open up bank or credit accounts.
Once equipped with a federal EIN, you’re able to open up business accounts with this number. It is much easier to keep track of your business expenses for tax purposes if they are kept separate from your personal accounts, and in many cases, a separate account is required.
Most banks don’t allow business transactions through your personal account, such as cashing a check made out to your business entity. You will also need a business bank account if you want to apply for a business loan.
7. Obtain appropriate business licenses and permits.
Lastly, depending on what your trade is, there may be different licenses or permits required to legally run your business. The State of Ohio provides a thorough checklist, along with links to forms per trade, to simplify this process.
Additional Resources For Small Business Owners
If you need additional assistance when getting your small business up and running within the state of Ohio, these resources may be of help:
- Small Business Development Centers (SBDC): Provide business counseling and assistance to individuals who are either starting or growing their business
- Women’s Business Centers of Ohio: SBA-funded initiatives of the Economic & Community Development Institute to guide individuals at any stage of the business process
- Minority Business Assistance Centers (MBAC): Support the growth and sustainability of small, minority-owned and disadvantaged businesses in Ohio
Additionally, if you are a current student or alumni, colleges and universities often have business assistance centers that can provide aid.
For assistance in navigating funding options for your Ohio small business, contact one of our loan experts today at (216) 592-2332 or visit us online. Growth Capital is dedicated to our community’s health and growth in Ohio and is always available to discuss your options.