Well-known for being business-friendly, Connecticut is one of the best states to start a business. However, you may be overwhelmed by the sheer work it takes to turn an idea into a business. The good news is that starting a business in Connecticut does not have to be complicated. Below is a step-by-step guide to getting your business up and running in no time.

Step 1: Choose Your Idea

Behind every successful business is a business idea. This idea is the foundation of your business; therefore, it is a good idea to give it plenty of thought.

Ask yourself the following questions to determine if you can turn your idea into a successful business:

  • What are your passions or hobbies?
  • Can these activities be turned into a profitable business?
  • Can you see yourself working every day in the business?
  • Does your business idea fill any gaps in the marketplace?
  • Is there a need for your business?
  • Is there any direct competition, and if so, what makes your business stand out?

Step 2: Pick a Name

Picking a name is crucial in starting a business. Your chosen name is the first thing customers and clients will hear. Their first impressions of your business will be based on the name. Therefore, you want to pick a name that is easy to pronounce and spell, is relevant to your business, and is memorable.

There are also state regulations that need to be taken into account when naming your business. For example, you cannot use a name already registered with the state. You can search on the Connecticut Business Name Search to check if your desired name is still available.

Step 3: Write Your Business Plan

Once you have decided on a business idea and a name, write up your business plan. A business plan includes every aspect of your business, from what products you’re going to sell to what your financial goals are. You can also use this business plan to present your business to potential investors.

There is no official guideline on what a business plan should look like, but a good business plan should at least answer the following questions:

  • Why have you started the business?
  • What problem is your business solving?
  • Who is your competition?
  • How can you plan on standing out from the competition?
  • Who is your target audience?
  • How do you plan on marketing your business?
  • What are your financial goals?
  • How much will you need to break even?
  • What are the startup costs?

Creating a business plan does not have to be complicated. In fact, there are plenty of resources online that you can use to help you write one. You can even download ready-made business plan templates.

Step 4: Get Funding

To start a business, you need money. And unless you can fund yourself using personal savings and your current income, you will need to acquire some funding. Three main ways to do this are getting a grant, a loan, or an investor.


Grants are one of the most sought-after methods of getting funds for a business because you do not have to pay this money back. The Connecticut Department of Economics and Community Development has several grant programs available that you can look through. You can also check if any grants are available in your local community. Grants come with strict requirements to decide who is eligible and come with a whole lot of competition.


If you are not eligible for a grant or cannot obtain one, you can apply for a loan instead. The Connecticut Department of Economics and Community Development has a regional loans program for businesses. Alternatively, you can obtain a loan from your bank, friends, or family.

Remember that you should always get a loan in writing – even if you’re borrowing money from your close family members. You want to avoid any potential money-related conflict down the road that may ruin your relationship.


You can attract investors by using your business plan. You could ask friends and family to invest in your business as well. More likely than not, investors may also want more say in the business. If you bring an investor into your business, make sure you read all of the fine print.

The State of Connecticut has a Business Opportunity Investment Act that governs the sales and opportunities of businesses. You can read more on this act and if it may benefit your business.

Step 5: Choose a Business Structure

Different business structures have different benefits. It is just a case of choosing a structure that fits your business. There are four main types of business structures: sole proprietorship, partnership, limited liability company, and C or S corporation.

Sole Proprietorship

A sole proprietorship is the simplest business structure. This type of business only has one owner, and the company is not a separate legal entity, meaning the sole owner is responsible for any liability. This structure is favored by low-risk businesses like ones that started as hobbies.


A partnership business structure is similar to a sole proprietorship as it is also an informal structure, and there is no separation between the business and the owner. The only difference is that a partnership has more than one owner who owns equal parts of the business.

Limited Liability Company

A limited liability company, or LLC, is one of the most commonly used formal business structures for small businesses. This is because forming an LLC offers the liability protection of a corporation with the simplicity and flexibility of a sole proprietorship or partnership. Essentially, you get the best of both worlds with an LLC.

C or S Corporation

Forming a corporation tends to be favored by larger companies with multiple shareholders. This is a formal business structure that offers liability protection. In addition, corporations are taxed as separate entities and often have tax benefits and discounts for multiple shareholder companies.

Step 6: Register Your Business

You will need to register your business with the State of Connecticut to remain compliant, manage your taxes, and receive the relevant permits to run your business.

Sole Proprietorship

Because this is not a formal business structure, there is no legal paperwork that needs to be submitted to the state to register the sole proprietorship. The only thing required to start your business legally is to file your trade name with your local country clerk.


The general partnership business structure does not need to be registered with the state as it is not a separate business entity from the owners. However, you must register your partnership’s business name with the local clerk and obtain a state tax ID number. Additionally, it is recommended that all owners sign a partnership agreement; if they don’t, they will be subject to Connecticut’s default partnership agreement rules.

Limited Liability Company

An LLC is easy to register in Connecticut. However, you will need to complete and submit the Certificate of Formation with the Secretary of State, either online or by mail. You must also pay the non-refundable fee of $120.

If successful, you will receive a Certificate of Formation, meaning that your business has been registered with the state.

C or S Corporation

To register a C or S-type corporation, you must complete and submit a Certificate of Incorporation to the Secretary of State. The certificate will state which type of corporation you are registering, and you will be asked to pay the $50 filing fee.

Step 7: Set Up Your Finances & Accounting

For a business to run smoothly, it is essential to set up your finances and accounting before you even begin conducting business. Setting up your finances means opening a business bank account, getting a company credit card, and setting up customer payment methods.

You will need to install a good payroll system to manage their salaries and pay employee taxes if you have employees. Hiring an accountant to manage your bookkeeping and taxes is highly recommended. Even if you can do everything yourself, it will take a huge load off your shoulders. And a professional accountant can help you avoid any potential costly tax mistakes.

Step 8: Get Business Insurance

Business insurance is a must-have if you own a business. While there are plenty of different policies to choose from, you should at least invest in a general liability insurance policy. This broad policy covers your day-to-day needs in running a business, including injury or property damage.

Other types of business insurance you can get:

  • Professional liability insurance
  • Workers compensation insurance
  • Commercial auto insurance
  • Commercial property insurance
  • Business owners insurance

Speak to an insurance broker to get a more detailed breakdown of what insurance you may need for your business.

Step 9: Obtain Any Permits & Licenses Needed

In Connecticut, all businesses, excluding a sole proprietorship, must apply for a business license before conducting business.

In addition, you may need to obtain a seller’s permit if you sell any taxable goods and services. To apply for this license, you must create an account with the Department of Revenue Services portal and follow the instructions on the website. The cost for this license is $100.

Depending on what industry your business falls under, there may be additional licenses you will need. You can see what you may need by visiting the Connecticut Department of Consumer Protection.

Step 10: Build a Website

Having a website as a business owner is a definite must, and nowadays, building one yourself is a pretty straightforward process. There are plenty of web-building websites online that offer free or subscription-based services, where they provide ready-made templates for you to customize.

When building a website, ensure that your business name is clear and visible, all fonts are simple and not difficult to read, your images are high-resolution, and the interface is not cluttered. A good way of turning viewers into customers is to include calls to action. A cleverly worded button here and there and adding a “Contact Us” page can do wonders do your sales and interaction with potential customers and clients.

Step 11: Hire Employees (If Any)

As your business grows or if there are too many responsibilities for you alone to take care of, hiring employees is a must. Aside from checking that they have the right qualifications and are the right fit for your company, you need to comply with state regulations.

In Connecticut, all new hires must be reported to the Connecticut Department of Labor within 20 days from their hire date.

Step 12: Market Your Business

Once you have started your business, you will need to market your business. Marketing your business is the best way to build brand recognition and generate leads. This is done by consistent and repetitive marketing.

Marketing your business can be done on any budget. Here are some of the best ways to market your business successfully:

  • Advertise on your website
  • Create a Google Business Profile and advertise on Google
  • Use social media like Facebook, Instagram, or TikTok
  • Create monthly newsletters
  • Use pay-per-click adverts
  • Attend local business expos and markets
  • Print out fliers
  • Advertise on your local radio and television
  • Run promotions and even hold small competitions on social media

The possibilities are endless when marketing your business.

Scroll to Top