How To Start A Business In North Carolina
Have you considered starting a business in North Carolina? If so, it might be the right decision. North Carolina has a booming economy and a large population suitable for entrepreneurs and startups. Despite the ongoing pandemic, the Digital Magazine Area Development ranks NC as the 5th best state to start a business in the US.
But even in a lucrative economy like North Carolina, you must take the right steps to successfully launch your business. All it takes is one mistake to cause you legal or financial headaches.
So, how can you start a business in North Carolina?
13 Practical and Easy Ways To Start A Business In North Carolina
1. Form a business plan
If you are on this page, you probably already have a business idea. But you need more than that.
It's essential to work out a detailed plan to guide you on achieving your goals and meet your target. Similarly, Forbes explains that it's crucial to write down business plans because it increases our chances of remembering them. So, it's essential to take the first step of putting it down in black and white.
2. Research the market and business regulations
After you have all your ideas together, the next step is to make a thorough inquiry on the product or services you intend to provide. Your research should provide answers to the basic questions you should ask yourself before investing in the idea.
Some of these questions are:
Is there a demand for the product or services?
You must verify that demand exists for the service you are providing in North Carolina. It’s easier to determine whether a need exists by identifying who your target market is.
After this, you should research to see if the market exists physically or virtually. Doing this will help you decide the appropriate medium to provide your services to your target market.
Is the idea feasible?
Ensure that your plan is realistic and viable. So, consider whether you have the time, resources, expertise, and stable access to the supply of the products you intend to provide.
What are the regulations?
Before you start a business in North Carolina, research the zoning laws and other regulations governing your trade. That way, you can avoid participating and conducting your business through means perceived as illegal.
3. Decide on Branding
Both small and large businesses create a unique identity for themselves through one common means — branding. So you must brand your company for it to be identifiable and distinguishable from the others.
The name, logos, and description are what distinguishes a company. So, choose a unique business name and design a logo that represents your business. You can check for the availability of the name of your choice on the NC Secretary of State website. Likewise, provide a description that defines your company, the products, and the services you provide.
4. Define the business structure
Business structures take different forms depending on the cost, the number of proprietors, organizational size, etc. Defining the business structure prepares you for other primary decisions and steps to take in running your business.
Your business may exist in any of this structure:
- Sole proprietorship
- Partnership
- Limited Liability Company
- Corporation
If you intend to personally run a small business, then you are starting a sole proprietorship. However, certain factors such as the ability to take risks and costs propel like-minded entrepreneurs to partner and form the aptly named partnership.
Additionally, both small and large enterprises usually take the form of Limited Liability Companies and Corporations. These entities protect your individual assets and create a company that can acquire its own credit, assets, and bank accounts.
5. Source for capital
To start a business in North Carolina, you must have the money to cover the investment costs. You can get funds from personal savings, but where that is insufficient, there are other options. Aspiring entrepreneurs and business-minded people can take loans from banks or secure funding from:
- Angel Investors
- Grants
- Crowdfunding
- Venture capital firms
6. Execute the administrative procedures
Whether you are starting your business in North Carolina, Florida, New York, or any other state in the US, your company is not legal unless you go through some administrative procedures. A big first step is to register your business.
Registration of Sole proprietorships and Partnerships
Formal registration is unnecessary for sole proprietorships and partnerships unless they are operating under a business name. If your business name is different from your personal legal name, you should register your business name by filing the Certificate of Assumed Name.
Registration of Limited Liability Companies and Corporations
LLCs and corporations, for instance, must also register a unique name for their company. Additionally, registration for LLCs is incomplete if you don't file an Article of Organization with the North Carolina Secretary of State. You can file the Articles of Organization online or via mail after paying a filing fee of $125.
Likewise, if you are forming a corporation In NC, you must file the Articles of Incorporation with a filing fee of $125. It’s also essential to hire a registered agent if you are launching an LLC or corporation.
7. Choose a suitable location
Most startups need a physical location to run their business. For instance, a restaurant may need a place to accommodate locals and visitors who want to dine indoors. Similarly, a barber will need a salon to accommodate customers who need a haircut. While it's essential to pick a convenient location, also consider the affordability of the cost of rent and utilities.
8. Apply for Licenses and permit
Most businesses need licenses and permits to operate in the state of North Carolina. For instance, if you are opening a coffee shop or beauty salon, you will need a health permit and an annual inspection by the Environmental Health Officers. You may also need environmental licenses or occupational licenses.
9. Apply for the EIN
LLCs, Corporations are recognized as separate entities from their members. They need a Federal Employer Identification Number to operate as artificial persons for the execution of activities such as taxation.
Likewise, sole proprietors and companies who wish to open a bank account in the business name will need the EIN to qualify for the procedure. What’s more, proprietors who are hiring employees need the EIN.
You can apply for the EIN online on the IRS website for free.
10. Prepare for taxes
Businesses pay a variety of taxes depending on their purpose, location, and sales methods. For the most part, you should prepare to pay:
- Sales and use taxes
- State income taxes
- Federal taxes
You can learn the taxes specific to your company and obtain more information from the North Carolina Department of Revenue and IRS.
11. Set up reliable accounting channels
Separating your business finances from your personal savings is essential for easier accounting and tax filing. Besides, it protects your personal assets in the event of a lawsuit against the business.
This starts by opening a business bank account and obtaining a business credit card. To ensure accurate bookkeeping, any funds going into or out of your business must go through these accounts.
On top of this, look for the right accounting software. With tools like QuickBooks or Xero, you can make managing your finances easier since these programs do all the heavy lifting. Best of all, they can integrate with your point of sale system to make tracking transactions a breeze.
12. Protect your business
With insurance, you can protect your business against future risks and limit liabilities. Insurance covers the costs in the event of liabilities for damages, litigation, loss, etc. Small to large businesses can enroll for general liability, insurance, worker's compensation liability insurance, or professional liability insurance.
Visit the North Carolina Department of Insurance to learn more about your options.
13. Practice e-commerce marketing strategies
In the contemporary digital world, businesses generate sales through e-commerce. Statistica reveals an upward trend in the sales percentage accrued from e-commerce platforms in the US. The percentage of sales has increased from 6 percent in 2013 to 9 percent in 2017. The prediction is that in 2021, the total sale percentage will amount to 14 percent.
You can enter the digital world easily with platforms like Shopify and BigCommerce. Additionally, you can employ social media such as the Facebook Business Suite to run ads, manage your business, and control sales on Instagram and Facebook.
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