Table of Contents
- Steps to Start a New Business in Florida
With a population of over 19 million people, Florida has the 2nd highest density of startups in the US. Several new business entrepreneurs choose Florida to start their business, with Miami being a firm favorite. So, if you are planning to start your business in Florida, here is a detailed step-by-step guide of the start-up process.
First and foremost, when you’re planning to start a business, you must first decide what business you want to start. Choose an idea that suits your skills, interests and personal goals. This will help to keep you motivated and greatly improve your chances of starting and running a successful business.
Typically, starting a business in Florida formally involves 3 steps:
When starting a business and choosing the type of business entity, your business will fall into one of the following categories:
- For-Profit Corporation: This is a company which is owned by a group of individuals having limited liability and pays corporate income tax.
- LLC or Limited Liability Company: This is similar to a corporation; however, the income of an LLC is reported on the individual tax returns of the member and doesn’t pay corporate income tax.
- Non-Profit Corporation: Has a non-profit structure that is exempted from tax and is common for charities, churches, NGOs, etc.
You can also have another type of company i.e. a partnership. And, there are many forms of partnerships:
- General partnership
- Limited liability partnership
- Foreign limited partnership
- Florida limited partnership
Most of the forms required for registering your business can be found online and they can be completed and submitted online too. These forms usually cover all the basic and statutory requirements. When filing, you need to provide the basic information regarding your business, the names of the business owners and you need to pay a filing fee.
Typically, the filing fees for:
- A profit or non-profit corporation is $35, 2 optional fees for a certificate of status or certified copy is $8.75 and registered agent designation costs $35.
- An LLC is $100, an optional certificate of status costs $5, an optional certified copy costs $30 and registered agent designation costs $25.
- The registration fee for partnerships is more expensive and you can see the complete fee schedule here.
This is an optional step. However, if you want to do business with a company that has another name other than the official one, then you may want to invest in registering the DBA or “Doing Business As” or a fictitious name. You can check the names that have been taken already, you can select a name and register the name officially by paying $50. You cannot reserve the names as they are usually awarded on the basis of first-come-first-serve basis and if you have a name that you love, then it’s a good idea to register it before somebody else does.
When you own a business, you need to pay the taxes too. You will have to pay local, city, state and federal taxes.
- Local Taxes: This is collected by the local tax collectors in the county. You need to pay tax to operate your business within the county and you can check the list of all the counties in the state.
- City Taxes: This is not collected by all cities; however, some cities may require that you pay taxes to operate within the city limits. You can check your city directory for more details.
- State Taxes: These are collected by the Department of Revenue of Florida, which include sales and use tax, corporate income tax, reemployment tax, etc.
- Federal Taxes: These are collected by the IRS and include estimated taxes, income tax, excise tax, employment tax and self-employment tax.
Before you start a business in Florida, you must determine the specific licenses needed. DBPR (Department of Business and Professional Regulation) and DACS (Department of Agriculture and Consumer Services) are the two biggest licensing agencies that do the licensing for skilled trades.
Usually, the DBPR gives licenses for several professional services such as restaurants, barbers, architects, home inspectors, geologists, food vendors, vets, etc. On the other hand, DACS gives licenses for pawn shops, telemarketers, private investigators, beekeepers, etc. For businesses in the healthcare area including pharmacists, nurses, tattoo artists, etc., daycare and financial services must get their licensing by other agencies.
Opening a bank account for your new business, whether it is an LLC for your home-based business or you’re planning to create the next Fortune 500 company in Florida. The business bank account should be separate from your personal bank account.
The main reasons why you should maintain a separate bank account for your personal expenses and business expenses are:
- In order to prevent any confusion during the audit or tax time.
- You need a separate bank account for your business if it is incorporated.
- Usually, a business bank account comes with specific business-related perks such as higher credit limits, longer billing cycles, etc.
Selecting a location for your business is probably one of the first things you would have done. You may decide to either decide to run your business from your home or you may have always dreamed of having a swanky office in the central business district of your city. However, you must decide the location of your business based on factors such as where you are most likely to get your target audience or things like city or county taxes, etc. Choose a city and location wisely after considering all the pluses and minuses of each location in terms of your business.
Irrespective of wherever you are starting a business, whether it is New York or California or Florida, you need extra capital to start off. And, there are many ways in which you can get extra capital for your business. Today, an entrepreneur can find money to start his/her business via short term loans, crowdfunding, credit cards, SBA loans, etc.
The SBDC (Small Business Development Center) of Florida is an excellent place where new entrepreneurs can get free financial advice. The SBDC can also help entrepreneurs to decide the funding options which are the best for their specific situation and business. However, you must remember that not all types of business loans will be ideal or available to you as an owner of a new business. Nevertheless, the SBDC can help in guiding you in deciding the best loan for you.
If you feel that the commitment of a business loan is too much for you, you could consider a business credit card, which has an introductory APR rate of 0%. This can act as a loan that is interest-free which can be a huge plus, especially when you’re just setting up your business. However, this will work best only if you pay back the amount before the end of the introductory period.
It is always a good idea to get business insurance. This helps to manage the risks and you can focus on growing your business. The types of insurance that you must consider for your business are:
- General liability insurance
- Professional liability insurance
- Workers’ compensation insurance
It is a good idea for all small businesses to get general liability insurance. If your business is an accounting or consulting firm, then you should also get professional liability insurance. Businesses in Florida having 1 or more employees, including the LLC members and officers, need to have a workers’ compensation insurance policy.
Once you have covered all the above steps, your business is ready and waiting for you to start rolling. There are many reasons why Florida is a great place to start your new business. The filing fees in Florida are fairly low, most of the processes i.e. registration, etc. can be done completely online and there are plenty of local resources that can be of assistance to get your business started.
So, if you are a seasoned business person looking for a tax-friendly and sunny location to set up a new business or you are a resident of Florida and are planning to set up your own business in your home state, then our guide is sure to give you direction on how you can go about setting up your new business in Florida.