Starting a business in Ohio is an excellent idea if you’re looking to run a business in a moderately tax-friendly state with a low cost of living. But if you’ve never started a business before, you may also wonder how to start a business and where to begin.
This guide will take you step-by-step through how to start a business in Ohio. By the end of the guide, you will have learned everything about starting a business in Ohio – from choosing a business idea and structure to setting up your finances and accounts and more!
Step 1: Choose Your Idea
Before you get into the nitty-gritty, you’ll need to choose a workable business idea. At this stage in the planning process, your business idea does not need to be overly thought-out.
To come up with a good business idea, try answering these questions:
- What are my passions, skills, and hobbies?
- Can they be turned into a profitable business?
- Will I enjoy running this business for the foreseeable future?
- Is there a need for my business?
- What consumer problem does my business solve?
- Are there any businesses out there already that are similar to mine?
The answers to the above questions should help you find a business idea that is also marketable. Also, don’t hesitate to reach out to friends and family for help. After all, they are consumers too, and they can also let you know their opinions and insights.
Step 2: Pick a Name
The second step in starting a business is simply picking a trading name. If you are starting a sole proprietorship or partnership, you don’t necessarily need to choose a name. But if you feel it is necessary for your business, you should start brainstorming ideas. Remember that it’s better not to change your business name once you’ve begun trading, so ensure you like your name.
The name you choose should also be unique and relevant to the industry your business is based. In the state of Ohio, you cannot register a business with a name that is already in use. To check if your desired name is still available, you can search the Ohio Secretary of State’s website. You should also check to see if your domain name is available at this stage.
If you’re struggling to come up with name ideas in the first place, here are some tips to get those gears turning:
- Use an online name generator.
- Create a list of words that pop into your mind when you think of the industry your business is in.
- Hold a brainstorming session with friends and family.
- Create polls online to get other people’s suggestions.
Step 3: Write a Business Plan
A business plan is like a blueprint for your business. A total stranger should be able to know everything about your business and how it will run after reading the business plan.
A good business plan can be an excellent way of attracting potential investors to your business.
While Ohio doesn’t state any specific rules about what needs to go into your business plan, you should at least aim to answer the following questions:
- What services are being offered?
- Why have you started the business?
- What consumer problem does your business solve?
- Who are your direct competitors?
- How will you stand out from your competitors?
- Who is your target audience?
- How do you plan on turning them into paying customers?
- What costs are involved?
- Can you find these costs yourself?
- What roles will be available in the business?
- How much will you need to make to break even?
- Are there any other relevant financial goals and predictions?
If you are struggling to write your business, there are plenty of ready-made business plan templates online that you can use.
Step 4: Get Funding
Startup costs like supplies and equipment cost money, and if you cannot afford to fund these costs yourself, you will need to get funding elsewhere. You can get funding for your business through a loan, grant, or an investor.
The Ohio Chamber of Commerce has various grant programs for different types of businesses. You can visit their website to see what grant your business might qualify for. If you do not qualify for a business grant, you can instead apply for a loan through the Ohio Department of Development or your local bank.
Alternatively, if you don’t mind selling shares in your business, you can have an investor fund the costs in exchange for shares or profits. An investor can even come in the form of friends and family. First, however, make sure you get any agreements in writing.
Step 5: Choose a Business Structure
You will need to choose a business structure that meets your particular needs. There are four business structures to choose from: sole proprietorship, partnership, LLC, and corporation. There are benefits to each one.
Sole Proprietorship
This is an informal business structure with only one owner. There is no separation of business and personal assets, so low-risk businesses typically use this business structure.
Partnership
A partnership is very similar to a sole proprietorship as it is also an informal business structure with no separation of assets. The only difference between the two business structures is that a partnership has more than one owner, all within equal shares in the business.
Limited Liability Company
A limited liability company, or an LLC, is a unique business structure as it is a hybrid between a corporation and a sole proprietorship or partnership. This structure is most commonly used by small to medium-sized businesses. An LLC combines the simplicity and flexibility of a sole proprietorship or partnership with the liability protection of a corporation.
C or S Corporation
This is the most formal type of business structure available and is favored by large corporations with multiple shareholders. Corporations are entirely separate entities from business owners, and this business structure offers many tax benefits.
Step 6: Register the Business
Depending on your business structure, you may be required to register it with the state of Ohio before you can begin trading.
Sole Proprietorship
Because this is not a formal business structure, you do not need to register it with the state. However, if you want to do business under a different name than your personal one, you must file an assumed or trade name with the Secretary of State.
Partnership
A partnership also does not need to be registered unless you wish to file an assumed name with the state. You can do this on the Secretary of State’s website.
Limited Liability Company
To register an LLC with the state of Ohio, you must complete and file the Articles of Organization to the Ohio Secretary of State. The fee to register online is $99.
Corporation
To register your new corporation, you must complete and submit the Articles of Incorporation and submit them online to the Secretary of State. This will cost $99.
Step 7: Set Up Your Finances & Accounting
It is recommended to set up your finances before you begin trading. To set up your finances and accounting, you should open a business bank account, apply for a business credit card, and set up a payment method for customers. If you have employees, you should have payroll software to stay on top of their salaries and employee taxes.
Accounting can get complicated as your business grows, so consider hiring an accountant. You can either put one on your payroll or use a third-party service. You will be incredibly thankful for the help when tax season rolls around since accountants can help avoid overpaying taxes.
Step 8: Get Business Insurance
Running a business without insurance is risky as you never know when a costly accident or disaster may occur. Therefore, a general liability insurance policy is highly recommended as this covers all damage and injury on your property and provides cover for the day-to-day running of your business.
On top of general liability insurance, there are many other policies you can choose from, including:
- 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 policy best suits your needs.
Step 9: Obtain Any Permits or Licenses Needed
To legally operate your business, you may be required to obtain permits or licenses, depending on the nature of your business and where it is based. Find a list of the necessary permits and licenses on the Ohio Department of Taxation website. You may also need to apply for additional permits according to your city or county. So, check with your local clerk to see what else you may need before you begin trading.
On top of a business license, you may also need a sales tax permit. This can be obtained from the Ohio Business Gateway.
Step 10: Build a Website
Every business nowadays needs a business website, and building one has never been simpler. You can use a free ready-made website or a subscription-based website service. If you want to sell directly from your website, platforms like WooCommerce or Shopify are great choices. All the content on your website should be relevant, informative, and up-to-date.
When building your website, here are some things you need to do:
- Check if your desired domain name is still available. There are multiple domain searches online to use.
- Ensure your business name is visible and stands out on the web page.
- Ensure that all the font used is a decent size and is easy to read.
- Avoid cluttering your web page with multiple images and animations, as this can drastically slow loading times, especially on a mobile phone.
- Ensure that your website is mobile-compatible.
- Include an “About Us” section.
- Provide all contact information.
- Provide easy-to-find links to your other social media accounts.
If you are not as tech-savvy or would prefer to focus your energy on other aspects of the business, use some of the startup funds to hire someone to build your website for you.
Step 11: Hire Employees (If Any)
If you are planning on hiring employees for your business, you should advertise on your local paper or job post websites online. Once you find the perfect candidate, offer them the job. You must report any and all new hires to the Ohio New Hire Reporting Center. This needs to be done within 20 days from the hire date. There is no fee to report new hires.
Step 12: Market Your Business
The final step in starting a business in Ohio is to market it. Nowadays, there are many different ways to market your business on any budget. Whatever medium you use, the one thing to keep in mind when marketing is to ensure your content is relevant and you remain consistent.
Here are some ways to market your business:
- Advertise on your business website and engage with customers.
- Make use of free social media like Facebook and Instagram.
- Create a Google Business Profile and advertise on Google.
- Create flyers to hand out.
- Write a weekly newsletter.
- Advertise on your local radio station.
- Attend local markets and business expos.
- Attend any local networking events.
Alternatively, you can hire a marketing expert to take care of this side of the business for you, while you focus on other aspects.