Steps to Start Home Based Business in North Carolina
It’s time to take your business idea to the next level. However, it’s extremely important to be certain that you’ve identified all of your business related requirements. The following steps are tremendously important for launching and operating your home-based company successfully. Let’s look at some of the key areas to focus on.
1. Prepare your home-based business plan
If you’re interested in learning how to start a home business in North Carolina, then the first step would be to create a good business plan. A strategic plan can vary depending on the industry sector you are planning to focus on. The importance of a plan lies in the fact that it will create a path that your company can follow. Some of the key components to include in your business plan are:
- High-level overview or Executive summary of the company
- Company Description
- Industry sector
- Target audience
- Products or Services
- Existing competition
- Revenue generation model
- Marketing and Sales Strategy
- Startup Expenses
- Funding for the business
2. Check zoning laws and regulations for your home-based business
It is important to check zoning laws and regulations before you start a home-based business in North Carolina. Each city or county has its own zoning ordinances and these rules define how a residential or commercial property situated in a specific geographic zone, can be used. Accordingly, you will also have to apply for home business licenses in North Carolina. Zoning laws can have an impact on the location of your business as they have been designed to protect public health and safety. Let’s look at an example to understand how this works.
Example: If you are planning to start your home business in Raleigh then zoning is governed by the Planning and Development Department. Home businesses are allowed in Raleigh according to zoning ordinances but you will be required to apply and obtain a permit to operate such a business. You will need to define whether the said business falls under Home Occupation or Live-Work. Most home-based business ideas in NC fall under the Live-Work category for which you will need to apply for a Live-Work Permit Application pursuant to Unified Development Ordinance (UDO) Section 6.7.3.E. If you are planning construction to the residential dwelling for business purposes then you will need to apply for a Residential Permit Application.
3. Choose a business structure and register your business
If you are wondering how to start a home business in North Carolina, it involves many processes like the new business registration or incorporation process. Although, the most important step is to choose the right legal structure as this will determine the registration process, as well as several other facets such as management, tax rate, documentation requirements, liability protection, and fundraising capabilities. The registration process forms and fees vary depending on the chosen structure.
If you form a limited liability company in North Carolina then you will have to file “Articles of Organization” along with a $125 filing fee. Similarly, if you form a limited partnership then you will be required to file a “Certificate of Domestic Limited Partnership” along with a $50 filing fee. If you want to start a home-based business in North Carolina and need assistance, IncParadise can help you with the process of registering your new business in the state.
Register your home-based business in North Carolina!
4. Check if you need to obtain an EIN
If you plan to start a home-based business in North Carolina or choose self-employment while working from home then at some point, you may need to apply for an employer identification number (EIN). This is a unique 9-digit number also known as the Federal Employer Identification Number (FEIN), and is assigned to businesses by the Internal Revenue Service (IRS). The requirement for an EIN is determined by the legal structure and other factors like hiring employees or if you have a Keogh plan.
5. Register for taxes
If you are planning to operate your business from home or your residence then you may be required to register for taxes. The type of taxes you have to file will depend on certain factors like:
- The type of business structure you chose to register such as a corporation, LLC, or partnership.
- Home occupation or business activity like selling of products or services.
You can check the Tax Resource Categories as mentioned by the North Carolina Department of Revenue to identify the type of taxes you may be required to file. Your business may be subjected to one or more types of taxes.
6. Get insured
Now more than ever, entrepreneurs are running their businesses from their residences due to easier accessibility to the Internet and technology. So, if you want to start a home-based business in North Carolina, you will need to maintain insurance for your business. The standard homeowners’ insurance that most people may have will not include protection that is specific to your business property such as technology, equipment, and software among others. Hence, choosing the right home-based business insurance will help with safeguarding your interests.
When learning how to start a home business in North Carolina, business insurance is a major detail that cannot be overlooked. Most policies primarily focus on two areas which include liability and property coverage. Here are some important tips:
- You can add an endorsement to your existing homeowner’s insurance policy like doubling the standard policy limits.
- You can also add an endorsement that is specific to your business needs.
- You can opt for a standalone business insurance policy with better coverage limits.
- You can choose a policy that provides business liability coverage, property coverage, electronic data processing equipment coverage, and loss of income coverage among others.
7. Obtain necessary licenses and permits
Once you’ve registered your home-based business ideas in NC, the next step is to submit your application to obtain the appropriate business licenses. A business license or permit allows you to operate your home-based startup in the state without any hiccups. Home business licenses in North Carolina can be categorized under the following:
- Sales Tax License – This type of license is mandatory for a home business that sells products directly or indirectly to its consumers. A few great examples would include an e-commerce website or software developer and seller.
- Occupational or Professional License – If you’ve started a home business that focuses on a specific occupation or profession then you will have to apply for these types of home business licenses in North Carolina. A few examples of such occupations would include an architect, attorney, boarding kennel operator, and Certified Public Accountant (CPA) among others.
- County Licenses – Licenses and permits will be issued by the city or the county when you start a home-based business in North Carolina. You will need to check with the county where your company is located for the appropriate municipal licenses.
Once you’ve obtained the necessary home business licenses in North Carolina, it is important to remember that they have to be renewed annually or on the date specified by the issuing authority. You can also check our specialized “Business License Research Report” service as it will provide you with the necessary information pertaining to the North Carolina licensing requirements including the license fees and the documents that need to be filed.
8. Market your business
Marketing is integral to the growth of any business including home-based business ideas in NC. Marketing your home-based business doesn’t have to be an expensive affair. The internet along with smart marketing strategies will provide just the right amount of exposure and help save money. Here are some methods, tools, and strategies that can be quite useful:
- Email weekly newsletters.
- Use word of mouth.
- Start a company website.
- Start a company blog.
- Use banners and posters on social media platforms.
- Use digital advertising like PPC (Pay-Per-Click).
- Create listings in major online directories like Yelp.
- Partner with another company to promote your business.
- Offer complementary products or services.