Starting a business does not need to be a stressful and complicated process. Even if you have never started a business before, with the proper knowledge, this process can be simplified enough for even novices to understand and follow without any issues.
This guide will cover everything you need to know about starting a business in Maryland. Covering everything from choosing the business idea to marketing the business, this guide is your one-stop shop for successfully starting a business in Maryland from scratch!
Step 1: Choose Your Idea
Every business starts with an idea. Choosing your business idea can be difficult as you need to find something that inspires you and works in what can be a saturated market. At this stage of starting your business, your chosen idea doesn’t need to be overly thought out. But it is important to be creative here to land a business idea that will work and be successful.
Answering the following questions will help you come up with a good business idea:
- What are my hobbies, skills, and passions?
- Can these skills and hobbies be turned into a profitable business?
- Do I see myself enjoying running the business?
- Is there a place for my business in the marketplace?
- How will my business differ from the existing ones?
- What consumer problems does my business solve?
The answers to your questions should get the brain juices flowing and help you land on an idea.
Step 2: Pick a Name
Picking a name can be daunting, but it is also essential to starting your business. The name you choose is super important, as many potential customers will form their first impressions of your business based on the name.
The name you choose should be unique and somewhat relevant to the industry your business is in. The name should also be accessible for people to read and understand.
Keep in mind that in Maryland, you cannot use a name already used by another business. To check if your desired name is still available, you run a search on the Maryland Secretary of State website.
If you are struggling to come up with a name for the business, you can try out the following methods:
- Ask friends on Facebook for their opinions.
- Use an online name generator.
- Create a word dump, a creative exercise where you list the first words that pop into your head when you think about your business.
- Hold a brainstorming session with friends and family.
Step 3: Write Your Business Plan
The next step in forming your business is to write your business plan. A business plan acts like a guide to your business. It includes everything from the research stages to financial details and even how you plan to run the business day-to-day.
A well-written business plan can also be a great marketing tool, as this is a great way to attract potential investors.
Here are some things that you should include in your business plan:
- Your product or services.
- Explain why you have started the business.
- Explain what consumer problem the business solves.
- Explain what makes your business different from those already in the market.
- Describe who your target market is and describe your marketing and sales strategies.
- Calculate how much money you will need to start the business.
- Calculate how much money you will need to make to break even.
- Outline the different roles in the business and what skills you will need to fill them.
Step 4: Get Funding
You can’t start a business with no capital. If you can’t afford to fund your business yourself, you will need to acquire funding elsewhere. This can be done through grants, loans, and investors.
The most desirable way of getting funds is through a grant, as this money does not need to be paid back. However, these are more difficult to get as they have strict requirements. You can find a list of grants available for businesses in Maryland on the Department of Labor website.
You can apply for a loan if you are not eligible for a grant. Unlike a grant, a loan must be paid back, often with interest. The Maryland Department of Commerce has several different funding programs for businesses in the state. Check out their website to see if there is anything that may help your business. Alternatively, you can go the private route and ask for a loan from your bank.
Pitch your business idea to your friends, family, and acquaintances. Some may be interested in investing in your business for a return down the road. Make sure you get any agreement in writing.
Step 5: Choose a Business Structure
There are four different types of business structures to choose from:
A sole proprietorship is an informal business structure with no separation between the owner’s personal assets and the business’s. Low-risk businesses most commonly use this structure. It is a popular choice because it is incredibly easy to set up.
A partnership is also an informal business structure and is very similar to a sole proprietorship in that there is no separation between business and personal assets. The only difference between the two business structures is that a partnership has more than one owner, all with equal shares in the business.
Limited Liability Company
A limited liability company, or LLC, is an excellent option for small business owners looking for some liability protection without being a full corporation. The best way to describe an LLC is that it is a hybrid business structure. An LLC offers the simplicity and ease of a sole proprietorship or partnership with the liability protection of a corporation.
An S or C-type corporation is the most formal business structure available. This business structure is commonly used by large companies that have multiple shareholders. Large companies favor this business structure because it is a separate entity from the owners, and there are some great tax benefits.
Step 6: Register The Business
To remain compliant with the state of Maryland, you are required to register your business with the state.
All businesses in Maryland need to register their business with the Maryland Business Express, including sole proprietorships. If you wish to trade under an assumed name, you will have to register this name as well.
Registering your partnership is the same process as a sole proprietorship. You must register the business and your assumed name (optional) with the Maryland Business Express.
Limited Liability Company
To register your corporation, you must complete and submit the Articles of Incorporation to the Maryland Business Express. The fee for filing this online is $120.
Step 7: Set Up Your Finances & Accounting
Setting up your finances and accounts is quite simple. You can open a bank account for the business, apply for credit cards, and set up a payment method for customers. Finally, you will need to set up payroll software if you have employees.
Hiring an accountant to run your business’s accounts can help ensure everything runs smoothly, especially if this is the first time you are running a business. You will be incredibly grateful for the help when tax season rolls around.
Step 8: Get Business Insurance
Every business needs at least a general liability insurance policy to cover the day-to-day running of a business. Maryland does not require this, but it is an absolute must if you don’t want to risk losing everything. General liability insurance is a broad insurance policy that covers everything from damage to injury on your business’s premises.
Here are some other insurance policies you may want to consider:
- Business Owners Insurance
- Workers Compensation Insurance
- Commercial Auto Insurance
- Commercial Property Insurance
- Limited Liability Company Insurance
Chat with your local insurance broker for professional advice on what insurance best suits your needs.
Step 9: Obtain any Permits or Licenses Needed
All businesses in Maryland are required by law to apply for a state business license. Luckily, the state has made it easy for business owners to do so. To apply, you must create an account and register on the Maryland Onestop Portal.
Depending on the nature of your business and your local county, you may need to apply for other permits and licenses. You can find more information about other licenses and permits you may need on this portal as well.
Step 10: Build a Website
Having a website as a business owner is highly recommended. Building a website nowadays is very simple, with a wide variety of web-building websites available for free or subscription-based. Alternatively, you could pay someone to build one for you.
A business website is a great way to market your business, engage with customers, and provide a platform for an eCommerce store, like Shopify or BigCommerce, should you want one in the future.
Here are some things to keep in mind when building a website:
- Make sure your web domain name is still available. There are many search engines you can use to do this.
- Make sure your business name is easy to read.
- Ensure that your font is neat, clear, and not too difficult to read.
- Don’t fill your web pages with unnecessary images, graphics, and GIFs, which can slow loading times and annoy browsers.
- Make sure the website is compatible with smartphones.
- Include an “About Us” section.
- Include links to your other social media accounts.
- Be sure to include all your contact details.
Step 11: Hire Employees (If Any)
If you are struggling to run the business alone, it is a good idea to hire employees to help you. On top of choosing candidates that meet your expectations, the state legally requires that you report any new hires to the Maryland State Directory of New Hires Website/Portal within 20 days from the hire date.
To do this, you must create an account on the portal and complete the forms. There is no fee for reporting new hires to the state.
Step 12: Market Your Business
The last step in starting a business in Maryland is to market the business. The one thing to remember when marketing your business on any budget is to remain consistent. This is the best way to build brand recognition and increase sales.
Here are some excellent and easy ways to market your business:
- Advertise on your website and engage with customers.
- Create events and relevant content on social media like Facebook, Instagram, and TikTok.
- Attend local expos and markets.
- Create a Google Business Account and advertise on Google.
- Attend local networking events.
- Make use of pay-per-click advertising.
- Run promos and giveaways on social media. This is a great way to increase followers.
- Hand out business flyers.
- Advertise on your local radio and tv station
If you’re not getting the traction you expect, consider hiring a marketing expert to handle all marketing needs for you.