How do I start a small business in Florida
If you have a startup idea and want to form a business then destination matters! The physical location of any business is a determining factor when it comes to having access to skilled labor, business laws, tax regulations, and other startup resources. Looking at all these factors, entrepreneurs more often than not prefer to start a small business in Florida. This guide has been created to provide information regarding how you can form a small business in Florida and the requirements: preparing a business plan, choosing a business name, the applicable taxes, and small business licenses in Florida among others, are all addressed in this article.
Small Businesses in Florida
Florida is home to 2.7 million small businesses and they are considered to be the backbone of the state’s strong, consistent, and growing economy. There are several top industries that are contributing to the trillion dollar Florida economy like tourism, the $135 billion international trade, the $8.8 billion agriculture industry, aerospace and aviation, and financial services, etc. Some of the fastest-growing small businesses in Florida are flourishing in industries like information and technology as the internet landscape is going through a massive paradigm shift. As an entrepreneur you can start a small business in Florida in any of these high-powered industries. The state offers plenty of advantages and opportunities irrespective of the industry you launch your business in.
Why start a small business in Florida?
Florida is the headquarters of several companies that have featured in the prestigious Fortune magazine’s 2020 list or the 2020 Fortune 500 list like the Publix Super Markets and World Fuel Services among others. The state is favored by entrepreneurs and startups and some of the fastest-growing small businesses in Florida include Jushi Holdings, Path Light Pro, AmeriLife, Healthmap Solutions, Activus Connect, Resilience Inc., US Global, and Motorsport Games, etc. The rise in the number of small businesses and startups is due to the numerous benefits and small business opportunities in Florida. Let us look at some of the top reasons for starting a new business in this state.
- Good tax climate – Florida is preferred by many as it has a low tax burden as compared to some of the other economically strong states. The state does not have any personal income tax and the corporate tax is one of the lowest in the nation.
- Availability of Capital – If you are planning to start a small business in Florida then you may require initial capital and the state has plenty of options for funding. For example you can apply for small business grants, loan programs, microfinance guarantee programs, and venture capital for seed stage businesses and startups.
- Business Incentive Programs – One of the key factors that have been providing the necessary boost to some of the fastest-growing small businesses in Florida is the wide variety of incentive programs. These business incentive programs offer everything from corporate income tax incentive programs to high impact performance incentives (HIPI).
Small business opportunities in Florida
Florida is considered as the fourth largest economy in the nation and has been growing significantly due to the contribution of small businesses primarily. There are a wide variety of small business opportunities in Florida through infrastructure, incentive programs, a robust economy, pro-business laws, a favorable tax climate and many more. Some of the astounding small business facts and opportunities include:
- Florida is responsible for almost 29% of total U.S. trade with the Caribbean’s and Latin American countries and this has been made possible because the state has a strong trade infrastructure and pro-business laws.
- Some of the fastest-growing small businesses in Florida are based in Miami, which is considered as one of the leading centers for international banking in the nation.
- Florida is situated at a point, which makes it a transportation hub that is well connected to the rest of the country, South American countries, and the rest of the world.
- Due to the small business opportunities in Florida; it is home to more than 25,000 high-tech companies.
- One of the much needed resources of every new business is a skilled workforce and the state has the 4th largest labor force in the United States.
- Florida offers affordable cost of living as compared to some of the top economic hubs in the nation.
Steps to Start a Small Business in Florida
Entrepreneurs find Florida a favorable state for conducting their business due to the many advantages it has. There is an immense potential for small business opportunities in Florida especially foreign trade zones (FTZ) and opportunity zones. In order to leverage these advantages and opportunities, you will need to first apply for registration and small business licenses in Florida. The question is how do you establish your startup in the state? Here’s a walk through the important aspects of the new business formation process.
1. Prepare your business plan
If you are planning to start a small business in Florida then one of the important decisions to make is creating a business plan. The importance of a business plan lies in the fact that it will help you to recognize your market and target audience while identifying challenges and competition. It will answer your requirements pertaining to startup costs, the type of small business licenses in Florida, and also clarify small business objectives and strategy. A business plan varies according to the location of a business, the primary business activity, the target audience and the market. The important components of any small business startup plan are:
- Executive summary
- Company description
- Market and industry analysis
- Product or Services Description
- Marketing and sales
- Management and organization
- SWOT analysis
- Financial projections
2. Choose a name for your business
It is important to think and create a business name as in the near future it will convey the position, values, and tone of your startup or brand. You need to consider certain aspects when thinking of a proper business name like:
- What is the business offering – products or services
- The industry
- The type of audience being targeted
- Offline or online business
Once you have thought of a name, you will need to reserve it with the Division of Corporations by paying a name reservation fee. You can start a small business in Florida only after you have reserved your name. The steps to follow when choosing a name include:
- Choose a name
- Ensure your chosen name is in compliance with Florida statutes
- Check for business name availability
- If it is available then reserve it for a 120-day period
3. Choose a location
There are several small business opportunities in Florida but the right location will ensure you are able to access these opportunities and use them for long-term benefits of the business. The location that you choose for your startup is extremely important as it drives all-round growth and performance. A location also plays an important role in attracting a skilled workforce. There are several reasons why choosing the right business location is important and they are:
- Attracting and retention of talent
- Initial Cost of starting a new business
- Cost of commercial space
- Proximity to local businesses
- Proximity to competitors
- Access to transportation and logistics
- Accessibility to customers and employees
- Demographics and target audience
- Taxes and regulations
The top locations for fastest-growing small businesses in Florida include Orlando, Jacksonville, Tampa, Florida City, Naples, Tallahassee, Sarasota, and Orange City.
4. Choose a business structure
A business structure is the key towards successful operations of any business. Each type of structure has its own pros and cons. For example, you don’t have to register a sole proprietorship with the state but you have to do so for an LLC. If you want to start a small business in Florida then you can choose a structure from any of the following:
- Limited Liability Company
- For-Profit Corporation
- Sole Proprietorship
- General Partnership
- Limited Partnership
- Not for profit Corporation
- Foreign Unincorporated Associations
- Limited Liability Partnership
- Limited Liability Limited Partnership
Some of the fastest-growing small businesses in Florida have chosen their business structures on the basis of limited liability and tax advantages.
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5. Apply for an EIN
If you are planning to start a small business in Florida then one of the foremost requirements is to apply for and obtain an Employer Identification Number (EIN). This is a unique tax ID number that is also known as the Federal Employer Identification Number (FEIN) and is issued to businesses by the Internal Revenue Service (IRS). The EIN is not applicable to all entities and helps in the filing of tax returns in the state of Florida.
6. Know about taxes
One of the primary reasons why entrepreneurs choose to start small businesses in Florida is because it is a tax-friendly state. The state does not impose any personal income taxes but small businesses will be subjected to some form of taxes depending on the type of business and business activity. The different types of taxes in Florida are:
- Corporate Tax
- Sales Tax
- Sales and Use Tax
- Insurance Taxes
- Communications Services Tax
- Discretionary Sales Surtax
- Reemployment Tax
- Documentary Stamp Tax
- Gross Receipts Tax
- Corporate Income and Emergency Excise Tax
Whether you are a new business or one of the fastest-growing small businesses in Florida; the tax rate would be different for each category of taxes. For example, the corporate income tax is 3.535% while the sales tax is 6%.
7. Get the necessary business licenses/permits
Once you have registered your startup, the next step is to apply for a small business licenses in Florida as without the necessary licenses or permits; you will not be able to operate in the state. Licenses and permits in the state are categorized under the following:
- General Business License: This type of license is also known as the business tax receipt and is primarily issued by the city or county your business is based in. It is issued for specific business activities and hence might not be applicable for all types of businesses. If you start a small business in Florida that is planning to sell goods or services then you will be required to obtain a business tax receipt. So, e.g., if your business is situated in Palm Beach County, Florida then you will have to file an Application for Local Business Tax Receipt with the office of the Palm Beach County Tax Collector.
License/permits for specific industries or professions: If you are in a profession or start a small business in Florida in an industry regulated by the state then you will be required to apply for licenses or permits with different state authorities or regulatory bodies. The state agencies or departments responsible for issuance of small business licenses in Florida are:
- Department of Business and Professional Regulations
- Department of Agriculture
- Department of Health
- Florida Bar
Due to the different categories of small business licenses in Florida, it can become quite difficult to identify the types of licenses required for your business entity. This is where our business license report service can be beneficial as it not only helps in identifying the licenses specific to your business but also provides you with comprehensive information and details pertaining to corresponding licensing fees and documents required for acquiring such a license
8. Hire good talents
One of the most important aspects of starting a new business is the process of hiring good talent. Every company needs employees for specific tasks like accounting, marketing or sales, public relations, distribution, and retail among others. Amongst other small business opportunities in Florida, the state provides a deep talent pool and this is one of the key drivers of the economy and business climate. Here are some tips to help you find them.
- Be flexible and utilize freelancers and contractors wherever necessary
- Since company culture is extremely important for small businesses, recruitment based on a candidate’s culture fit always helps
- Offer attractive compensation to the right candidates along with added benefits
- Offer growth opportunities within the company as this is a crucial aspect for attracting talent
- Streamline your overall hiring process
- Use your existing network of contacts for candidate referrals
9. Secure funding for your business
Florida has a strong startup environment and if you are thinking of starting a new business in the state then there are two types of costs to focus on:
- Startup Costs
- Operating Costs
These costs are important and different from each other as startup costs are one-time costs while operating costs are continuing in nature and can vary from one year to the next. How does one manage excess expenditure especially when it comes to handling operating costs? This is where small business opportunities in Florida can provide the much required assistance through a variety of funding programs. Some of the ways you can secure funding in the state are:
- Bootstrapping or using any amount of personal funds you can manage
- Consider your friends and family if you are looking at minimal expenses
- Explore other funding sources like micro-loan organizations and crowd-funding sites
- Look at venture capitalists (VC) and angel capital associations
- Apply for small business grants in Florida
10. Prepare for the worst
You can start a small business in Florida with ease but it is important to be psychologically prepared for the worst as natural and man-made disasters can strike anytime. Surprisingly, according to readwrite.com, 74% of small businesses don’t have any post disaster recovery plan while 84% of startups don’t have any insurance against natural disasters or events. Florida has been bearing the brunt of hurricanes, thunderstorms, wildfires, floods, tropical storms, and tornadoes for several decades and this can be disruptive for small businesses and especially home-based businesses. Hence, it is important to stay prepared and this can be done through the following:
- Make risk assessment of natural disasters or financial crisis in advance
- Ensure you have a backup of all your computer or business data
- Ensure a COOP or Continuity of Operations Plan is in place
- Pick up an insurance plan that provides coverage necessary to help your business become operational post crisis.
11. Brand your business
Branding is integral towards creating an identity of a small business. The process of creating an identity through branding involves several important elements like the name of the company, logo, and graphic design, which can identify the company, brand or product from others. When you start a small business in Florida, the company name and logo can be used in a variety of branding and marketing collaterals like company website, business cards, letterhead, envelopes, printed brochures, social media graphics, Direct Mail, Tradeshow Displays, Packaging, and catalogs among others. The most important thing about branding your business is that all elements collectively help in supporting the sales and marketing efforts of your company and takes you one step closer to becoming one of the fastest-growing small businesses in Florida.
12. Market your business
Branding and marketing are interrelated as branding exercises provide the support for implementation of marketing strategies required. Along with a strong branding strategy, you need to work on a marketing plan before you start a small business in Florida. There are several mediums or platforms through which you can market your business. Some of the fastest-growing small businesses in Florida have successfully used the following ways to market their business.
- Word of mouth
- Company Website
- Company Blog
- Social media and email marketing
- Digital advertising like PPC (Pay-Per-Click)
- Free coupons or free products or service for first time client
- Create listings in major online directories like Yelp
- Run contests for discounted of free product or service
13. Plan to expand your business
There are several small business opportunities in Florida that will not only help you to operate your business successfully but also provide a definite path towards business expansion. It is important though to create an expansion plan in advance especially when you are creating your business plan. A good expansion plan needs to focus on:
- Targeting new customer base and markets
- Reinvent your business to take advantage of various online opportunities
- Think of expanding using new sales as well as delivery channels
- One of the fastest ways to expansion and growth is by acquiring other businesses
- Add to your existing product or service list based on customer or market need
- Form a strategic partnership with the right businesses or companies
- Some of the fastest-growing small businesses in Florida have created a franchise model
Ready to Start Your Small Business in Florida
There are plenty of small business opportunities in Florida if you are thinking of starting a new business in the state. You will need to register your business and obtain small business licenses in Florida to become operational. IncParadise has a team of experts who can guide you through the process of starting your small business in Florida.
We have also helped thousands of companies to start their own businesses in Florida. IncParadise understands that different businesses have different requirements and hence offers many additional services like obtain EIN, filing annual reports, and foreign qualification among others.