If you are thinking about starting a business in San Diego, you must be aware of the various requirements that are necessary before you begin. When you have a full planned business map at hand, then the whole process not just becomes easy but fast, too. You can also stay away from confronting problems that may hinder/slow down your speed. Presented here is the step-by-step guide that will help you in starting a new business in San Diego:
1. Don’t Skip the Business Plan
It is very important to have a full-fledged business plan as it helps in setting a firm framework for your business and ensuring its success. Your business plan should be immensely detailed talking about your goals, reasons they are attainable, and plans for attaining them. If you are unable to write a business plan, then it is possible that your business might get disorganized and eventually fail.
2. Figure Out a Name for Your Business
The name of your business is a very vital factor as people will remember your business through its name. Also, it is because of the business name that people will know what quality of service or product is presented by you. You must look up for a business name that people find appealing, expressive and engaging. It should be unique, marketable but at the same time, the name should also be justifiable from a legal viewpoint. But most importantly, do not forget to perform an extensive trademark search before deciding on a name for your business.
3. Decide on a Business Address
It is important to decide on a business address be it a brick-and-mortar store or online business, as you need to fill a proper address in your applications. Your home address can be used as your business address if you work from home. A majority of the applications refuse to accept a PO Box as they want a physical address. Having a proper address for your business will ordain its licensing conditions, and right from the beginning, it’s crucial to get this aspect correct. You may confront difficulties in approval if you change the address later.
4. Form Your Business Entity
You can get in contact with a business attorney in San Diego who can help you in selecting the entity that would suit your business best. There are various options available while selecting an entity for your business. This includes:
- Sole proprietorship: If only you or your spouse own the business, then this is the right arrangement as you get tax advantages and you can avoid the struggle and cost of operating it as a distinct unit.
- General Partnership: It has two or more owners having unlimited liability and profits and losses are shared by them.
- Limited partnership or LP: In LP, general partners have unlimited liability for all obligations and debts whereas the limited or “silent” associates are responsible for things they have invested in the company.
- Limited Liability Company or LLC: It provides flexibility in managing each owner or investor’s profits or losses as a percentage of their ownership in the company through its operating agreement. Also, the owners or investors have limited liability.
- Corporation: It is a California entity that is set up to be distinct from its owners. Although being the least flexible for management, corporation presents the most liability protection.
- Subchapter S.: Eligible corporations or LLC’s can choose to be treated as an S-Corp, which enables each of a business’s owners to enjoy the flow-through of profits and losses and enables them to evade double taxation.
- C corporation: An eligible company that expects to grant health benefits to its employees or to carry substantial amounts of revenue from one year to another can profit from this decision.
- Professional Corporation: This entity is structured, and run, same as a regular corporation, but, California requires doctors, lawyers, dentists, CPA’s, psychologists, psychiatrists, and other professional to form a professional corporation.
5. Obtain an Employer Identification Number (EIN)
The Employer Identification Number (EIN) is normally used by any business entity that is separate from its owner, and the sole proprietor who pays federal excise or payroll taxes must also have one by law. EIN can also be obtained by sole proprietorships who have no employees. Visit the IRS’s website in order to apply for an EIN number where it is instantly processed.
6. Get Your Business License
A business license or business tax certificate is necessary before you begin a business in California. The license application requires the names, addresses and additional contacts of the business as well as its owners. Your company structure, EIN number, the number of workers and assumed annual sales is required while applying for a license.
7. State of California Taxation
Apart from being a complex topic, taxation is subject to constant alterations, thus you are advised to be aware of present business tax information. It can be obtained from the Internal Revenue Service, the California Tax Information Center and the Office of the City Treasurer. A publication named “Striking Gold in California” is also provided by the state which presents basic information from each of California’s three taxation agencies and the Internal Revenue Service.
Once you have managed everything as per the above-mentioned steps and are set in a uniform order, you are ready to commence with your business. Make sure you plan a great opening so that customers find it hard to forget and come back again and again.