Ranked as the 2nd best state to start a business in the USA, North Carolina is a great state to follow your entrepreneurial dreams. The state offers one of the lowest corporate tax rates and has a very business-friendly atmosphere. But if you’ve never started a business, you may wonder where to begin. Starting a company doesn’t have to be as complicated as it looks.
This detailed guide will teach you how to start your North Carolina business from scratch. Learn how to choose a name, get funding, register your business, and even how to market your business.
Step 1: Choose Your Idea
The first step in starting your business in North Carolina is to choose the idea on which your business will be based. At this stage in the planning process, your idea is just a rough draft, so don’t be too concerned about fleshing out your idea. The purpose of this step is to find a direction.
Answer these questions to help you come up with an idea and to see if it is workable and marketable:
- What are my favorite hobbies, interests, passions, and skills?
- Can any of these hobbies, skills, and passions be turned into a profitable business?
- Is there a need for my business?
- Will I enjoy running the business every day?
- What consumer problem does my solve?
- What skills will I need?
- Are there any businesses similar to mine already out there?
- How will my business differ from the rest?
The answers to these questions should help you know whether your idea will work. If not, think of another idea and answer the questions again. You can also employ the help of your friends and family to bounce ideas off of them.
Step 2: Pick a Name
This second step will also get your creative gears turning. Picking a name may be simple in theory, but expect to toss and turn over different business names until you pick “the one.” You must be happy with your chosen name, as changing your business name partway through trading is generally not a good business decision.
When choosing a name for the business, it should be 100% unique and not used by another business. The North Carolina Secretary of State website has an online search feature for you to check if your desired name is still available.
Your chosen name must also be easy for people to read and pronounce. In addition, it should be unique but still relevant to the industry your business is based. Lastly, your name should be somewhat relevant to the services you offer.
Struggling to come up with a name? Try out these easy methods below:
- Use an online name generator. These names are randomized and free.
- Hold a brainstorming session with friends and family.
- Create a poll on your social media like Facebook or Instagram.
Step 3: Write Your Business Plan
Now that you have established the basics of your business, you’ll need to flesh out your business idea. Think of the business plan as the map to your business. It will have all the planning and research, information about your products, and all relevant financial details.
You aren’t required to write up a business plan in North Carolina. However, the business plan is an important document that can be used to market your business to potential investors and keep you organized, which is why you want the plan to be as thorough as possible.
While there are no rules about what should be included in the plan, you should at least aim to answer the following questions:
- What services will your business offer?
- Who is your target audience?
- What marketing techniques will you use to turn your target audience into paying customers?
- What are the startup costs involved?
- Do you have the funds, or will you need funding from elsewhere?
- How much money will you need to earn before you break even?
- What are your profit projections for the next three years?
- Are there any other financial details that are important to the business? What are they?
- What skills will be needed in the business?
- What roles will be available in the business, and how do you plan on filling them?
Don’t worry if this step feels overwhelming. There are plenty of business plan templates online that can help you write yours.
Step 4: Get Funding
To start a business, you will need money upfront for the equipment, stocks, and other startup expenses. If you do not have the start-up money, you will need to get funding through different means. The best way to get funding for a new business in North Carolina is from a grant, loan, or an investor.
North Carolina has several different grant programs for businesses within the state. You can find more information about these on the North Carolina Department of Revenue website and the North Carolina Department of Commerce website.
While grants are the preferred method of funding as you do not have to pay the money back, they often come with entry requirements. If you do not meet these requirements, you can apply for a loan at your local bank or look on government websites to see when any loan programs are announced. You can also ask for loans from your friends and family, but make sure to get any agreements in writing.
Your third option is to have someone invest in your business in exchange for shares. This is a great option if you plan to partner with someone in the business.
Step 5: Choose a Business Structure
Choosing the proper business structure is vital. Each structure has different benefits that appeal to different kinds of entrepreneurs.
Sole Proprietorship
A sole proprietorship is an informal business structure that many small business owners use. In this business structure, there is no separation of assets between the business and the owner. This means the sole owner is liable for the business. This structure is typically used for low-risk companies.
Partnership
Much like the sole proprietorship, this structure is not formal, and there is no separation between personal and business assets. The only difference is that a partnership is used for businesses with more than one owner who all have equal shares in the business.
Limited Liability Company
A limited liability company, or an LLC, is one of the most commonly chosen business structures for small to medium-sized businesses. Small businesses choose the LLC structure because it has the ease and simplicity of a sole proprietorship or partnership with the liability protection of a corporation.
C or S Corporation
The last business structure is a corporation. This is the most formal type of business structure commonly chosen by large companies with multiple shareholders. The corporation is an entirely separate entity from the business owners and is offered some tax benefits from the IRS.
Step 6: Register Your Business
Once you have chosen a business structure, you may be required by law to register it with the state of North Carolina before you can begin trading.
Sole Proprietorship
Because this is an informal business structure, you do not need to register a sole proprietorship with the state if you are trading under your legal name. However, if you wish to trade under a different name, you must file an assumed name with the Secretary of State.
Partnership
This structure does not need to be registered unless you wish to use an assumed name. To do this, you must file the assumed name with the Secretary of State. You can also draft and sign a partnership agreement, although this does not need to be submitted to the state.
Limited Liability Company
To register your LLC in North Carolina, you must complete the Articles of Organization and submit them to the North Carolina Secretary of State. In addition, you will need to create an account with them first to proceed with the application. The fee to register your business is $125.
Corporation
To register your corporation in North Carolina, complete and submit the Articles of Incorporation to the Secretary of State. The fee to register your corporation is $125.
Step 7: Set Up Financing & Accounting
You will want to set up financing and accounting before you open your business for trading. To set up your finances, you will need to open a bank account for the business and apply for a company credit card. You will also need to set up a payment method for your customers or clients to use. Finally, you will need payroll software to manage and pay employee and employer taxes if you have employees.
Consider hiring an accountant to help you set everything up and get everything running smoothly. You will be thankful for the help when tax season rolls around.
Step 8: Get Business Insurance
Business insurance is not a requirement by the state of North Carolina. But you never know when disaster may strike, so it is good to be prepared. Having a general liability insurance policy is a good way of doing this. This broad policy covers all your everyday needs to run a business.
There are many other types of business insurance policies to choose from, not limited to:
- Business Owners Insurance
- Workers Compensation Insurance
- Commercial Auto Insurance
- Limited Liability Company Insurance
- Commercial Property Insurance
- Professional Liability Insurance
If you’re overwhelmed by the choices and unsure where to start, consult a business attorney or broker.
Step 9: Obtain Any Permits or Licenses Needed
North Carolina does not have a general business license for all businesses. Instead, there are multiple licenses for different sectors and industries. To ensure you get the correct business license, visit the North Carolina Secretary of State website. You should also check your local city and county regulations to see what other permits or licenses you may need to operate legally.
You will also be required to apply for a tax ID. This will have automatically been done during business registration. But if you have a sole proprietorship or partnership, you should apply with the North Carolina Department of Revenue.
Step 10: Build a Website
Every business nowadays needs a good website; luckily, building one is easy. You can find plenty of website templates with a quick Google search.
When building your website, keep the following in mind:
- Check that your desired domain name is still available.
- Ensure your business name is clear and easy to find on the webpage.
- Ensure all font is neat and easy to read.
- Avoid cluttering the website with images, graphics, videos, and GIFs. This can slow down the webpage loading times.
- Make sure that your webpage is compatible with mobile browsers.
- Include a thought-out “call to action” like a “Contact Us” or “Shop Now” button.
- Link your other social media accounts.
Step 11: Hire Employees (If Any)
If you need to hire employees, upload a job post on job search websites and interview your favorite candidates. And offer the job to your preferred candidate, according to their experience and even their personality.
You are required by law to report any new hires to the North Carolina New Hire Directory. This needs to be done within 20 days of the hire date.
Step 12: Market Your Business
The final step in starting your business in North Carolina is to market your business. Marketing has really grown over the past few years, and now there are so many different ways to market – to suit every budget and need. When marketing your business, always ensure that your content is relevant.
Here are various ways to market your business:
- Advertise and engage with people on your business website.
- Advertise for free on social media like Facebook, Instagram, and even TikTok.
- Create a Google Business Profile and advertise on Google.
- Attend local events and business expos.
- Hold competitions and giveaways.
- Give out freebies or samples.
- Attend local networking events.
If you’d prefer to focus your energy on other aspects of the business, you can always hire a marketing expert to take care of all of this for you.