Florida is home to many major corporations as well as small businesses. Startup activity is strong in Florida, with a higher-than-average percentage of its population becoming entrepreneurs. Startups have also proven to be especially fruitful in job creation, with 6.41 jobs being generated by each startup. In fact, according to a recent Seek Business Capital study , Florida ranked No. 2 as the best state to start a business. The economic conditions are thus very favorable to starting a business in Florida. But just because the business environment looks good doesn’t mean you can just dive right in. When starting a business in Florida, you have to abide by all the rules and regulations required to legally open and operate a business. Follow these steps on how to start a business in Florida:
Florida is particularly hot when it comes to new business activity. Though small businesses in Florida employ fewer people than big corporations, they still form a fundamental pillar of the economy and employment in the state. According to the U.S. Small Business Administration, there are 2.5 million small businesses in Florida, comprising 99.8 percent of all businesses in the state. At the same time, SMBs employ 3.3 million workers, equal to a little over two-fifths of all employees, in the state of Florida. Florida has many procedures, requirements and policies to follow when starting a business. However, compared to starting a business in other states, Florida’s procedures are fairly straightforward. Check out this step-by-step guide explaining how to start a business in Florida.
No matter what state you’re in, starting with a business plan is essential for every entrepreneur. Naturally, business plans vary from company to company, but your business plan should outline the basic features of your business. Some of the most common components of a business plan are:
Other key aspects of your business, such as how your company will be organized and managed, should go in your business plan. Make sure you have covered all the fundamentals you need to create your business plan .
How your business is structured affects fundamental aspects of your business, such as taxes and the relation of owners and members to the business. Thus, figuring out which of the types of business structures work best for your new company is a critical step for starting a business in Florida. According to the IRS, there are essentially six business structures:
There are other business structures and variations you can form depending on your company, such as limited partnerships, limited liability partnerships and professional corporations. An important note about LLCs is that they are regulated by state statute, so each state may have different laws and policies pertaining to forming an LLC .
When you have the desire to start a company, picking a business name is often quite difficult. But you should spend the time coming up with a solid name because legal and business problems emerge quite often from a poorly named company. Worse, trying to change the name of a company down the line after it has already existed for some time tends to be costly and hurts brand recognition. It’s important you know how to check to see if your potential business names have already been taken in Florida. Keep reading for tips on picking a good business name. A good place to start is by searching the internet for your proposed name. Do this check by using several search engines, such as Google, Bing, Yahoo and DuckDuckGo. Search for a few different possible spellings of your potential business names to see if it already exists online. This will help avoid possible business name issues early on. If you plan to do business online, this could be a good time to figure out your company’s domain name and register it. Even if you aren’t an online company, nowadays every business should have a website so no business can afford to skip this step. Another good move is to conduct a trademark search using the US Patent and Trademark Office (USPTO) website. Do a variety of searches on the USPTO site, not just a search for your exact name. For example, search misspellings, plurals, variations of spelling, similar-sounding words and other versions of your chosen name to be sure you’re sifting out existing business names. Next, search the Florida Department of State Division of Corporations’ business entity database to make sure your proposed name isn’t already taken and registered. Like when searching the USPTO site, look up variations of spelling, plurals and misspellings because the state may reject a name that is too similar. Florida, like most states, does have restrictions on how certain types of businesses can be named. Different business structures require certain business entity identifiers in its name. For example, if your company is a corporation, then it needs to include the correct corporate identifier, such as “Corporation”, “Incorporated” or an abbreviation. An LLC requires the term “limited liability company” spelled out or abbreviated. Businesses that require a professional license, such as a doctor, almost always have to name their firm a certain way. In Florida, these professional corporations must abide by the Florida Professional Service Corporations and Limited Liability Companies Law and Florida Business Corporation Act . If your business has one name yet operates under another (for example, Jane Smith is a sole proprietor, but wants her company to go by “Smith Agency”), then you need to file a Fictitious Name Registration through the Division of Corporations. A more common name for this type of registration is a DBA, “doing business as.” Here’s the Fictitious Name Registration page for Florida.
Choosing a location for your company is very much linked to the type of business you’re going to run. Deciding on a location for opening a restaurant will have different criteria than opening a logistics or manufacturing firm. When choosing your business location, definitely research local zoning regulations and business license requirements. These vary by industry and locality, so make sure you research regulations and licensing that pertain to your type of business. On a broader level, research the economy and demographics of the Florida cities that you’re interested in for your new business. Factors from the age and income of the population to unemployment rates and major employers in the area all can affect your business. Florida’s economy is generally always strong. Many major companies can be found in Florida, including Publix, Office Depot and ADT. Another cool feature is Florida’s startup environment. The startup scene in Florida has been growing over the years, notably in South Florida. Tthe South Florida Accelerator has offices on Broward College’s downtown Fort Lauderdale campus, which is proving to be a fruitful small business generator. There are additional important factors that are contingent on location. These include features like local taxes, utilities, proximity to other businesses and services, accessibility and parking, walkability, transportation, ordinances, among other things.
Every state has its own requirements for registering a business, but there are basic similarities across almost all states. In all states, it’s essential to have your business name, structure and location chosen because in the next major step — registering your business — you’ll need to include that information when you file registration forms. Here are the key requirements to register a business in Florida.
When forming an LLC in Florida, you must file articles of organization with the Florida Department of State via the Division of Corporations. The Division of Corporations website allows you to file the articles of organization online or you can print them out. You must include the name of the LLC, its purpose, how it will be managed, its address, and the name and address of the LLC’s registered agent on this form. There’s a filing fee of $100 for articles of organization plus $25 for the designation of your business’s registered agent, for a title filing fee of $125. Here you can find the Florida Limited Liability Company articles of organization form .
Once again, when incorporating a business in Florida, you go to the Division of Corporations at the Florida Department of State. In order to incorporate a business, you’ll file articles of incorporation with the Division of Corporations, which can be done solely online or through printing out the forms. On the articles of incorporation, you’ll put down the name of the business, its address, purpose, the number of shares of stock, initial officers or directors, name and address of your designated registered agent, and the name and address of the incorporator. Here are links to the for-profit and non-profit articles of incorporation forms for starting a business in Florida:
As in most states, when forming an LLC, corporation or limited partnership in Florida, you are required by law to designate a registered agent. Your registered agent manages the service of process for the company. A basic example, of service of process is if your LLC or corporation is sued. When this occurs, your registered agent will receive the legal paperwork on your company’s behalf. A big difference between Florida and other states is that you can designate an owner or employee in your company as your “in-house” registered agent. In other states, such as when starting a business in California , your registered agent must be an individual outside of your company. In Florida, you can either have an in-house registered agent or you can designate an outside agent.
In Florida, as in every state, depending on the structure of your business, you may need to get a federal Employer Identification Number (EIN) from the IRS. Technically, it’s not always required, but getting an EIN is always smart. Obtaining an EIN is required if your company will have employees. If you do not, then an EIN might not be required. An EIN, though, is great for other aspects of running a business, especially in small business banking. Banks often require an EIN to open an account in the business’s name and it’s common for companies you do business with need your EIN to process payments. Getting an EIN is required for corporations and LLCs with employees. Single-member LLCs and sole proprietorships don’t need to get EINs. You can get an EIN by completing an online application on the IRS website . The filing is free, and once everything submitted is validated, you will receive your EIN immediately upon completion.
Florida does not levy a personal income tax. No personal income tax naturally is a boon for employees, but it can also affect business owners. If your company has a business structure that is a pass-through entity — which includes a sole proprietorship, partnership, LLC or S corporation — you report business income and losses on your personal return. Since Florida does not have a personal income tax, owners of those types of businesses and their companies are not subject to state income tax. However, there are times when LLCs are considered corporations for tax purposes. In that case, your LLC would pay the Florida corporate income tax, but this only occurs if you elect to be considered a corporation. If you’re incorporating a business in Florida, specifically a C corporation, then you will pay income tax. In Florida, the base taxable rate is 5.5 percent of net income, after doing all necessary adjustments, additions and subtractions. Below you’ll find links to the Florida Department of Revenue and corporate income tax form:
If you have a corporation in Florida, you’ll also file a federal corporate income tax return. Here you can find Form 1120 – US Corporation Income Tax Return . For sole proprietors, partners and LLC members, you’ll use the standard Form 1040 – US Individual Income Tax Return . All businesses in Florida will have to deal with Florida sales tax. The standard Florida sales and use tax rate is 6 percent, with the exception of 4 percent on amusement machine receipts, 5.7 percent on leases or licenses of commercial property and 6.95 percent on electricity.
There’s no blank state-wide requirement to have a business license. However, many industries in Florida do require business or professional licenses to operate. You can find licensing information at the Florida Department of State’s Division of Library and Information Services. Here are some useful pages for licenses and permits:
Florida is home to several major regional banks, all of which work with small businesses and owners. Some top regional banks headquartered or with offices in Florida include:
In addition, the big national banks are available for business banking as well, such as Wells Fargo and Chase.
Opening financial accounts, both bank accounts and credit accounts, for your business is a smart move. Even if you’re a sole proprietor, there is plenty of good reason to open business-designated financial accounts. Doing so keeps your personal money and accounts separate from your business funds, which is smart accounting practice. With a separate business checking account, all your company’s income, expenses, credit card and loan payments, and more are all in one, designated place. You might only think about a business checking account but opening a business savings account can be advantageous as well. A great way to use your business savings account is to save for taxes. This short-term business savings account should be hands-off except for paying business taxes. In the long-term, you should use your business savings account to accumulate funds for purchases down the line, such as for new equipment and expansion.
The reasoning behind getting a business credit card is similar to getting a business bank account. You’ll absolutely want to keep credit card purchases made for your business separate from personal purchases. Keeping your personal finances separate from that of your business is even more important with credit cards than with bank accounts. Business credit cards are a very important tool if used wisely. If you’re responsible with your own personal credit card behavior and history, make sure it translates when using a business credit card. A business credit card can be used to build your business credit , a crucial aspect of your company that can either help it grow or undermine it. Having good business credit allows you to gain access to a wider variety of funding options when your company needs it down the line.
Without funding, your business will never get off the ground. Many entrepreneurs turn to friends and family for loans to fund their startup. Another increasingly popular method is through crowdfunding through platforms. The traditional route for funding a small business without partners, friends or family contributing money, is through a Small Business Administration (SBA) loan. SBA loans are ideal for funding, however, they are notoriously difficult to get with very stringent requirements, SBA loans also present startups with the Catch-22 in that they require the company to have two to three years in business to be eligible. Fortunately, getting an SBA loan is not the only way to fund your new business. Even if your business doesn’t exist and have revenue, with good credit history, you can fund your small business through alternative funding options specialized for startups .
This guide covers the most essential steps you need to get in place to start a business in Florida. However, you’ll likely have some more steps and procedures to do, like getting business insurance for instance. Plus, you can always tinker with your company’s organization or make other changes in the future. A key aspect of running a business that’s often overlooked in the beginning are recurring costs or renewals. Be sure to stay on top of ongoing, recurring or annual costs, and certifications, licenses or permits that may need to get renewed. As a potential business owner, you will be dealing with tons of issues as you embark on your journey of becoming an entrepreneur . With this checklist, however, you will be well underway to starting to a business in Florida.