Starting a business can be frustrating and difficult, but it does not need to be. This guide will inform you how to start a business in Florida confidently. Learn about the process of registering a business in Florida, avoiding scams and getting the right permits, understanding how your business legal structure will affect your taxes and what records you will need to keep.
It is not easy to know where to start when starting a business in Florida. But don’t worry, we have compiled all the information you need in this ultimate guide so that you can have peace of mind!
Choose a business idea
The first step in how to start a business in Florida should be deciding what type of business you want. Consider what you are interested in, your personal goals, and your natural abilities to inspire you when the going gets tough and improve the odds of success for this venture.
Conduct research and build a business plan
Before starting your business plan, it is vital to research the market thoroughly. This can be done through surveys, for example, or search engine optimization (SEO) research. The goal of market analysis is to understand your target group and competitors better to create an effective business plan.
It is not just that a well-crafted business plan helps you get organized when you are planning how to start a business in Florida. Business plans are used to obtain funding and help achieve important milestones.
Your business plan should include an executive summary, description of products or services, marketing strategy, financial plan, and a goal for your business.
Understand the legal structure of your business
Picking the right legal structure for your business is one of the most important decisions you’ll make in the process of starting a business.
There are many different types of businesses with different taxes, liability, and required documentation requirements. It’s important to know of these to start your business on the best foot possible.
Some examples of different legal structures include sole proprietorships, corporations, partnerships, and LLCs. The structure that your company falls into will affect what records you should keep and other factors as well.
For example, if you’re a sole proprietor, you should keep detailed records to ensure no confusion about where financial information belongs. If your company is an S-corp or LLC, those documents would go elsewhere.
Register a business in Florida
The process of registering a business in Florida has two steps.
The first step is to register the name of your business by filing an assumed name certificate. The second step is to file articles of incorporation with the Division of Corporations.
Forms for registering your business can be found at SunBiz and you can submit most of them online. These forms cover the required minimum statutory filing requirements, but there may be additional items you need to file depending on your business. When filing, basic information about your company is provided along with the owner’s name, and a fee is paid when submitting paperwork.
Filing fees for a for-profit corporation or nonprofit as of 2019 include
- $35 filing fee,
- $35 registered agent designation,
- two optional fees of either a certified copy ($8.75) or a certificate of status ($30).
Filing an LLC as of 2019 includes
- $100 filing fee,
- no registered agent requirement (in lieu),
- one optional certified copy ($5) or certificate of status($30).
Partnerships are more expensive to register with the Florida Department Of State’s site providing full details on their full obligations.
Register your DBA
This is technically an optional step. If you want to do business with a company that has the same name as your personal one, don’t worry about it- just registering your own fictitious name or DBA (doing business as) will suffice.
You can research what factors are not distinguishable for Florida businesses and which entity names are already taken before picking out yours and paying $50 to register it officially. Names cannot be reserved so they’re always awarded on a first-come, first-served basis; if you have a good idea submit it quickly!
Understand how taxes work for your business type
When it comes to taxes, the type of legal entity you choose for your business will have a considerable impact on your personal taxes. Knowing this step thoroughly is essential in a successful plan of how to start a business in Florida.
The different types of businesses in Florida are Sole Proprietorship, Partnership, LLC, and Corporation.
A sole proprietorship is the easiest one to register. It requires no annual reports, no state licenses, and special permits; however, it is taxed as an individual. This means that the profits and losses are added to your personal income tax return (Form 1040).
Two or more people register partnerships with at least one person acting as the managing partner. The partnership doesn’t pay any taxes; instead, all of its profits are considered income for each member.
LLCs require an annual report and state license but do not require any special permits; however like partnerships, they are also taxed individually.
Corporations are similar to partnerships where they do not pay any taxes themselves but all of their profits will be taxed as income for its shareholders. All corporations also require a corporation ID number from the secretary of state before applying for a federal identification number from the IRS.
Here are the taxes that apply in Florida :
- Federal business tax: Federal business taxes are collected by the IRS and include income tax, estimated taxes, self-employment taxes, employment taxes, and excise tax. You can review all these necessary requirements (for example; income tax is a requirement for all businesses except partnerships) as well as notable exceptions on the IRS website or visit your local office to receive more information.
- State business tax: Florida’s Department of Revenue collects taxes in the state, which include sales and use tax, unemployment (formerly known as reemployment) tax, corporate income tax, and any other taxes. You need to register on their website to collect or remit these taxes if you live in Florida.
- Local business tax: A local county tax collector collects taxes from you if you own a business in that area. Here’s the list of every state’s counties so that you can contact yours for more information on what to do next.
- City business tax: When operating your business in a city, you may have to pay taxes. The municipal directory will help with this process and then contact the appropriate officials for more information.
Get the right permits and licenses
While you plan out how to start a business in Florida, be sure to look into the licenses you need. There are two licensing agencies for “skilled trades”: The Department of Business and Professional Regulation (DBPR) and The Department of Agriculture and Consumer Services (DACS).
DBPR provides licensees for various professional services including architects, barbers, geologists, and home inspectors – basically any professionals that provide services to the public are required by law to have one.
Just because your profession falls under this category doesn’t mean it automatically needs a license-it depending on what specific tasks are involved with what exactly you do.
For example, A geologist working as an educator or researcher without affecting public health does not require a permit, but if they perform professional geological work they would need one.
You can search for a business in the list of all businesses in DBPR and how to contact the Department of Business Professional Regulation for easy access.
The DACS is a government agency that licenses private investigators, pawnshops, beekeepers, and telemarketers. You can find the full list of services they license here!
There are many licensing agencies, but the biggest one is online. However, businesses in “health professions” (including tattoo artists) and those providing other services like daycare or financial services need to contact others.
Pick a location
Let’s be honest: This is probably something you did right away, even before thinking about the detailed steps of how to start a business in Florida. Maybe you are interested in running a business from your home office, or maybe you’ve envisioned opening up a store on the main street in your hometown for years. But when taking taxes and customer base into consideration, it may need to look elsewhere with things like county or city taxes.
From Tallahassee to Miami, take time and consider the pros and cons of each location wisely because ‘location’ has become the mantra of the real estate age where they say “location” is everything!
A business location determines the type of licensing you will need for your brick-and-mortar establishment or if you’re starting a home-based business. Your growth potential is also determined by where your company’s located and how it operates.
Open a business bank account
Whether you’re operating an LLC for your home business or aiming to create Florida’s next great Fortune 500 company, you should probably have a separate bank account for your business. There are three important reasons why:
- Wanting to keep personal and business expenses separate is crucial when filing taxes or undergoing an audit. It will also help to protect your personal assets from the effect of business fallacies.
- If the company is incorporated (which most businesses are), they require their own bank account to avoid issues with mailboxes being full of irrelevant information. For this, a business bank account is necessary so as to avoid the confusion between personal and business mail.
- Business accounts usually come with more benefits like longer billing cycles and higher credit limits, making things easier on both the owner and employee.
Business owners, who know that it is easier to open a business bank account online, will find this option beneficial for faster processing. If you’re worried about security, all paperwork filed over secure and encrypted connections means there is nothing to worry about with this form of opening a new business account.
The best small business credit cards make it easy to conduct purchase transactions and earn perks while covering your daily costs. You can use them without getting confused between personal expenses and the ones you incur for work.
The modern era has introduced many different ways to open a business. You can start your own business in Florida or Alaska these days without following certain rules that apply to past entrepreneurs. If you need money to start up, there are many options like crowdfunding and loans from the Small Business Administration (SBA).
The SBA offers loans with flexible terms and borrowers get an infusion of capital while also earning valuable equity through its programs. Credit card financing might also be perfect if your startup needs relatively small amounts or short-term loan programs that provide borrowers with cash fast, but charge higher interest rates than other methods like personal loans do.
Choosing the right funding option for your small business can be difficult. Florida’s Small Business Development Center is a great place to start! They provide free financial advising and can help you decide which funding options are best for you. Keep in mind, all loans will not be available to new businesses owners, but the SBDC can still help guide you through this process.
If you don’t want to make the commitment of a business loan, consider getting a business credit card with an introductory interest rate. A 0% APR can act as an interest-free loan while you’re just starting out until your introductory period ends. Ensure to pay back what you owe before that time is up!
Also read: How to start a business without money
Manage your finances
Keeping records is crucial for any business. You have to know where you stand financially at all times. This includes keeping track of any expenses, income, and debt payments you make monthly, quarterly, or annually.
By keeping your financial records organized, it will be easier to understand the current state of your business’s finances and how it is performing compared to previous months or years.
You can also use these records to create reports on your expenses and where they will help you make key decisions about how best to manage your finances for this year or next year.
Stay on top of managing your money by balancing the cash coming against the cost of doing business each month. For example, if you have $5,000 coming in but $6,000 worth of expenses per month, something needs to change!
That could mean not taking on as much work which could lead to a downturn in revenue but it could also mean negotiating better rates with vendors so that you aren’t paying more than necessary for supplies and services.
Keeping a balance between income and expenses will help ensure that you don’t spend more than what comes in and that you can afford what needs to get done each month!
Florida offers a variety of business opportunities with some of the best weather in the country.
With the right help and support, starting a business in Florida is relatively less difficult than in other places. It’s easy to register and set up an account and you’ll find lots of local resources to help you get started.
Florida has a number of resources for new entrepreneurs. If you’re considering starting your own business, or are an established entrepreneur wanting to relocate to Florida, bookmark this guide and come back whenever you have questions.