Many people aspire to escape the mundane 9-5 and aim for something bigger and better. For some, this means starting a business. Rhode Island is the smallest state in the USA, but don’t let that stop you from following your entrepreneurial dreams! If you are looking at starting a business in Rhode Island, you may wonder what you need to get started. To help you in the process, this guide will go over every step required to start a business in Rhode Island. This guide will cover everything from choosing an idea to marketing your business once it’s formed.
Step 1: Choose Your Idea
The first step in starting your business in Rhode Island is choosing your business idea. This idea will form the foundation of your business. At this stage in the planning process, your idea does not have to be completely planned out.
Answer the following questions to start thinking of a business idea and to determine whether or not it would work:
- What are my favorite hobbies, skills, and passions?
- 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?
- Do I have the skills to run a business?
- What consumer problem does my solve?
- Are there any businesses similar to mine already out there?
You can also employ the help of your friends and family. They should be able to give you ideas of their own and let you know whether or not they believe your idea will work.
Step 2: Pick a Name
Picking a name for your business is an integral part of starting a business. The name should be easy enough for people to read and pronounce. The name of your business should also be relevant to your industry and give consumers an idea of what products you are offering. So, you must ensure that your business name is catchy and unique.
In Rhode Island, you cannot register your business if it has a name that is already in use. To check if the name you want to use is still available, you can do a search on the Rhode Island Business Portal.
If you are struggling to think up a name for your business, try out the following methods:
- Use a free online name generator. These create randomized names and can be a great starting point.
- 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
This next step involves a lot more work on your part. It is not a legal requirement in Rhode Island to write a business plan, but it is a very good idea. A business plan will include all your research, planning, product information, the daily operations of the business, and all the financial information.
Your business plan should be as thorough as possible as you can use it to attract an investor.
While there are no set guidelines about what needs to be included in your business plan, you should at least aim to answer the following questions:
- What services will your business offer?
- Why have you started the business?
- Who is your target audience?
- How do you plan on turning your target audience into paying customers?
- What are your marketing techniques?
- What are the startup costs involved?
- Do you have the money, or will you need funding?
- How much do you need to earn to break even?
- Are there any other financial details that are important to the business?
- What skills are necessary to run the business?
- What roles will be available in the industry, and how do you plan on filling them?
Writing a business plan can be confusing and overwhelming if you have never done it before. Luckily, there are plenty of templates that you can find with a quick Google search.
Step 4: Get Funding
When starting your new Rhode Island business, you will need money for startup costs like supplies, equipment, and branding. If you do not have the money for this upfront, you will need funding elsewhere. This can be done through a grant, loan, or an investor.
In Rhode Island, there are a couple of different grant programs that small businesses to apply for. You can learn more about these programs on the State of Rhode Island website. If your company does not qualify for a grant, you can try to apply for a loan from registered providers like your local bank.
If neither of these options works for you, you can opt to find an investor. Use your business plan to attract investors to your business and show them why and how your business will be successful.
Step 5: Choose a Business Structure
There are several different types of businesses in Rhode Island. Each different business structure may be beneficial to different types of business owners.
Sole Proprietorship
A sole proprietorship is one of the informal business structures. In a sole proprietorship, there is no separation of assets between the business and the owner, meaning that the owner is liable for the company. This structure is typically used by low-risk businesses with one owner. Sole proprietorships usually start as hobbies or freelancers.
Partnership
A partnership is very similar to a sole proprietorship as it is also an informal business structure with no separation of assets. The difference between these two structures is that the partnership is used for businesses with more than one owner, all with equal shares in the business.
Limited Liability Company
The business structure known as a limited liability company, or an LLC, is most commonly used for small to medium-sized businesses. This is because LLCs have the advantage of being a combination of two different structures. An LLC has the ease and flexibility of a sole proprietorship or partnership with the added liability protection of a corporation.
C or S Corporation
A corporation is a formal business structure used by large companies with multiple shareholders. A corporation is an entirely separate entity from the business owners. This tax structure also normally comes with some tax benefits.
Step 6: Register the Business
Once you have chosen the correct business structure, you may be legally required to register your business with the state.
Sole Proprietorship
This business structure does not need to be registered with the state of Rhode Island. However, if you do not want to trade under your name, you will need to file for your trade name, also known as a Doing Business As (DBA), with the Business Portal. To do this, you must create a user profile on the portal first.
Partnership
This business structure does not need to be registered with the state of Rhode Island either, but you will need to register your trade name (DBA) on the Business Portal, if applicable.
In addition, it is recommended that all the owners sign a partnership agreement in case of conflict. However, this agreement does not need to be submitted to the state.
Limited Liability Company
To register your LLC in Rhode Island, you must fill out the Articles of Organization (Form 400) and submit them on the Business Portal to the Secretary of State. The fee for filing these documents is $150.
Corporation
To register a corporation in Rhode Island, sign and submit the Articles of Incorporation on the business portal. The fee to do this is $230 if the shares are equal to 75 million or lower.
Step 7: Set Up Your Finances & Accounting
Before you officially open your business, you should set up your finances. You will need to apply for a bank account for the business, a credit card, and a payment method for your customers to use. In addition, if you have employees, consider installing payroll software to automate payments.
To help you with all of this, you should hire an accountant. An accountant can look after the business books and taxes and help you avoid overpaying taxes too.
Step 8: Get Business Insurance
As a first-time business owner, you should ensure that your business is covered for damage, theft, and injury, which is why you need to have a general liability insurance policy. This insurance policy will protect you from disaster and everything you need for daily operations.
You should also consider other types of insurance policies, such as:
- Professional liability insurance
- Commercial property insurance
- Workers compensation insurance
- Commercial auto insurance
- Limited liability company insurance
Chat with your local insurance broker for professional advice on what is best suited for your particular needs and your business.
Step 9: Obtain Any Permits or Licenses Needed
Not every Rhode Island business needs a license before operating. However, depending on the nature of your business and the location, you may need to obtain some permits or licenses in order to remain compliant with the state. The licenses you require will also differ according to your local laws, so check with your local county clerk to ensure you’ve got everything you need before you begin trading.
If you want to collect sales tax, you must apply for a Permit to Make Sales at Retail from the Division of Taxation.
Step 10: Build a Website
Whether your business is big or small, you will need to have a website for the company. Having a website is an excellent way of engaging with customers and advertising your products. You can build your website using ready-made templates or pay someone to build one for you.
If building your website yourself, you should make sure that you do the following:
- Check that your desired domain name is still available.
- Ensure that your business name is clear and easy to find.
- Ensure all fonts are neat and are a good size that is easy to read.
- Avoid cluttering the website with images, graphics, videos, and GIFs, as this can slow the loading times of your webpage.
- Make sure all images are your own or are copyright-free.
- Make sure that your webpage is compatible with mobile browsers.
- Include a good call to action or contact us button.
Step 11: Hire Employees (If Any)
If you plan to hire employees for the business, you will need to put up a job post on job search websites. When you hear back from candidates, narrow them down to your top choices and invite them for interviews. And finally, offer the job to your preferred candidate!
You will need to report all new hires to the Rhode Island New Hire Registry. This needs to be done within 14 days of the hire date. There is no fee to report new hires.
Step 12: Market Your Business
The final step in starting a business in Rhode Island is to market your business. Marketing your business can be done on any budget as long as you remain consistent and ensure that your content is relevant.
Here are some good ways to market your business:
- Advertise and engage with people on your business website.
- Create interest and 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 conventions.
- Hold competitions.
- Advertise on your local radio or television stations.
- Attend local networking events.
- Create flyers.
If you do want to do the marketing yourself, you can always hire a marketing firm or marketing expert to take care of this aspect of the business for you. That way, you can focus on other parts of the business to ensure the company grows!