With its low crime rate, high standard of living, and strong economy, Virginia is a popular state to start a business in. But if this is your first time starting a business, getting one set up can be overwhelming and complicated. With so many little details you’ll need to look after, how do you even begin?
This detailed step-by-step guide teaches how to successfully start your own business in the old dominion state. This helpful guide will teach you how to choose a business idea, pick a name, register your new business, and so much more. Everything will be broken down into bite-sized steps, so you’ll be running your new Virginia business in no time!
Step 1: Choose Your Idea
First, you will need to choose an idea for your business in Virginia. Every successful business starts with an idea. This idea is important because it acts as the foundation on which you will build your company, which is why you should come up with the idea that you are passionate about and that works in today’s market.
To come up with an idea and to test if your idea will be able to turn into a profitable business, answer the following questions:
- Do you have any skills, passions, or hobbies?
- Can these activities be turned into a profitable business?
- Can you see yourself working in the business every day?
- Do you have the skills to run the business?
- Are there any businesses like yours already?
- Is there a need for your business?
- How is your company different from others?
- How does your business solve a consumer’s problem?
Your answers to these questions should help you decide if this business idea worked. You should also ask your friends and family for help, as their insights as consumers can also point you in the right direction.
Step 2: Pick a Name
The second step to starting a business in Virginia is to choose a good name. Picking a catchy name for your business can be daunting, but by following the below methods, you be able to easily come up with a name for your company:
- Create a word dump. This is a list of words that pops into your mind when you think about your business. The trick is to not think too hard about what to write down.
- Use an online name generator. There are plenty available for free online that come up with randomized names.
- Brainstorm with friends and family.
Make sure that your chosen name is relevant to your business’s industry and that the name gives consumers an idea of what products you are offering.
The name that you choose should be unique. In fact, the state of Virginia will not allow you to register your business using a name already registered with the state. You can do a business entity search on the Virginia Secretary of State’s website to see if your desired name is still available.
You should be 100% happy with the name you choose, as changing the name after your business is set up is not only a pain but can also be harmful from a marketing standpoint.
Step 3: Write Your Business Plan
Every successful business should have a business plan. This plan will have all your research, planning, product information, how the business will be run on a daily basis, and all the relevant financial information. While Virginia does not require businesses to have business plans, they are highly recommended in the planning stage of starting a company.
Make sure your business plan is as thorough as possible because this document can also be used to apply for funding.
There are no rules about what needs to be in the business plan, but you should at least try to answer the following pressing questions:
- Why have you started the business?
- What products or services does your business offer?
- Who are your direct competitors?
- Who is your target audience?
- How do you plan on turning your target audience into paying customers?
- How much will you need to start the business?
- Will you need to get funding from elsewhere?
- How will you get funding?
- How much money will you need?
- What equipment is needed?
- What type of employees will you need?
- What are your financial goals and predictions?
If this is your first time writing a business plan, it can be intimidating to draft up this document. If you are stuck, you can always use ready-to-use templates off the internet to get you started.
Step 4: Get Funding
Starting a business can be costly as you need to pay for the paperwork, licenses, registration, equipment, premises, and supplies. If you cannot afford this upfront, you need to get money elsewhere. In Virginia, you can fund your business with a grant, loan, or investor.
While the state of Virginia does not have a lot of funding programs available for new businesses, the Virginia Small Business Financing Authority does have a couple of options. You can visit their website to learn more.
Alternatively, you can take the private route and get a loan from your local bank or your friends and family. Make sure always to read the small print and that you understand your loan terms. You can also borrow money from friends and family. However, if you go this route, ensure you get all agreements in writing. The last thing you want is for monetary matters to ruin your relationship.
Another way to get funding for your business is to have an investor fund the startup costs in exchange for shares or a portion of profits in the company.
Step 5: Choose a Business Structure
There are four different business structures that you can choose from, each with its own features and benefits.
This informal business structure is a business with only one owner. The sole owner is liable for the company as there is no separation between the owner’s and the business’s assets. This type of business structure is commonly used for low-risk businesses.
A partnership is another informal business structure similar to a sole proprietorship. Like the sole proprietorship, there is no separation between the owner’s assets and the business. The only difference between the two structures is that there is more than one owner in a partnership, all with equal shares in the company.
Limited Liability Company
A limited liability company, or an LLC, is a formal business structure that is the most popular amongst small businesses. This is because an LLC combines two different business structures, offering the best of both worlds. It has the flexibility and ease of a sole proprietorship or partnership and the liability protection of a corporation.
A C or S corporation is a formal business structure used mainly by large companies with multiple shareholders. A corporation is an entirely separate entity from the owners. This business structure may also come with some tax benefits.
Step 6: Register the Business
To remain compliant with the state, you may be obligated to register your business with the state of Virginia before you can begin trading.
As this is not a formal business structure, you do not need to register your sole proprietorship. However, if you wish to trade under a different name other than your personal name, you will need to register your business name on the Clerk’s Information System (CIS).
This is also an informal business structure that does not need to be registered to start trading. Similarly to a sole proprietorship, you can apply for a trade name through the CIS, if applicable.
In addition, it is recommended that all business owners sign a partnership agreement in case of conflicts within the ownership. This agreement does not need to be submitted to the state but is instead kept with the business’s records.
Limited Liability Company
To register your corporation, file and complete the Articles of Incorporation and submit it to the SCC. There is a standard $25 filing fee, plus businesses with 1 million or fewer authorized shares will be $50 for every 25,000 shares or fraction. Companies with more than 1 million shares will need to pay $2,500.
Step 7: Set Up Finances & Accounting
Set up the business’s finances and accounting before you open the business to the public. To set up your finances, you can open a bank account for the business, apply for a company credit card, and set up a payment method for customers to use. You should install a payroll system to manage employee salaries and taxes if you have employees.
The business’s finances can get confusing as your company grows, so consider hiring an accountant. An accountant can assist you with all of the above and more!
Step 8: Get Business Insurance
An essential step in starting a business in Virginia is to insure your company. While there are plenty of different insurance policies that you can choose from, you should at least have a general liability insurance policy. This broad coverage policy is perfect for all your day-to-day needs when running a successful business.
Other insurance policies you can consider include:
- Business owner’s insurance
- Commercial auto insurance
- Commercial property insurance
- Workers compensation insurance
- Limited liability company insurance
Speak to your local insurance brokerage for professional advice and a quote.
Step 9: Obtain Any Permits or Licenses Needed
The state of Virginia does not issue a statewide general business license. Instead, the different cities and counties will have their own requirements on what licenses will be needed. You can check out Virginia’s Department of Professional and Occupational Regulations website to see what license you may need to get. Your requirements will also differ according to the type of business you have.
You will need to get a Sales Tax Certificate. This can be done by registering your business with the Virginia Department of Taxation for a seller’s permit.
Step 10: Build a Website
Owning a website for your business is a must-have in today’s internet-driven world. Your website can be used to advertise and market your business, or you can sell products directly off your website using platforms like Shopify.
Build the website yourself using ready-made templates like WordPress, or hire someone to build it for you. Either way, there are some things you need to make sure are done:
- The domain name should be unique.
- All the fonts you use should be a good size that is clear and easy to read.
- Do not clutter your webpage with unnecessary images, videos, and graphics, as this can slow down the loading times.
- Make sure all your content is relevant.
- Make sure all content is your own or that you have permission from the owner to use it.
- Include a call to action button or two.
Step 11: Hire Employees
If you are planning on hiring employees for the business, you should draft up a job post and post it on local and online job boards. When you hear back from candidates, invite your preferred candidates for interviews. Make sure to ask a mix of behavioral, situational, and skill-based questions. Offer the job to the candidate with the best qualifications to suit the job.
All employees must be reported to the Virginia New Hire Reporting Center. This needs to be done within 20 days of the hire date. There is no fee to report new hires.
Step 12: Market the Business
The final step in starting your Virginia business is to market the business. Whether you are doing the marketing yourself or you have hired someone to do it, here are some various ways to market your business:
- Use social media like Facebook and Instagram.
- Advertise on your business website.
- Make use of pay-per-click advertising.
- Create a Google Business profile.
- Advertise in your local newspaper.
- Attend markets and expos.
- Run competitions and giveaways.
- Attend local networking events.
- Host an opening launch or event.
Have any more questions? Let us know!