Steps to start a business in Washington
The state of Washington is home to several industries including several high-growth industrial sectors. If you are planning to start a business in Washington then steady business growth and economic stability are two professional highlights for you to look forward to. However, forming a new business is never an easy process, and there are several factors you must consider before you take the first steps. Let’s take a look at some of the key factors that can help strengthen your business, and guarantee your ability to achieve your desired objectives.
1. Prepare a Washington Business Plan
Every business has specific objectives, a target market, and products or services that are different from any other business in the same industry. For that reason, the business plans for two businesses are hardly ever identical, even though some of the components or elements of the plan might be similar. This plan is also known as a corporate plan and focuses on key components for operating a successful business. If you are planning to incorporate in Washington, then your plan should take into consideration an efficient marketing launch, pivotal financial details, diverse marketing strategies, and adverse competition.
Providing a business projection of at least 5 years advanced time is one of the principal reasons for creating an impeccable business plan. The purpose of an operational plan is to provide an outline of the path that a company needs to follow which is beneficial to them in achieving growth, expansion, and income. If you plan to register a business in Washington then your company operation plan should include the following components:
- Executive summary
- Company description
- Products and services
- Market analysis
- Competitive analysis
- Financial features and requirements
- Management and Organization
- Branding and marketing
- Logistics and operations
- Financial Projection
2. Attend Entrepreneurial Training or Development Programs in Washington
Creating a new business or start-up from scratch can be an arduous task. For this reason, entrepreneurs or small business owners can benefit from entrepreneurial training or development programs. These particular programs help in strengthening the specific skill sets needed for first-time business owners through a variety of business development training. If you intend to start a business in Washington then you would benefit from checking out some of the top programs available such as the “StartUp Washington” program by the Washington State Department of Commerce.
“StartUp Washington” can help you learn how to navigate through the several aspects of creating and managing a new business including, ways to increase profitability, calculated use of your building capacity, and strategies for stimulating growth. Choosing to incorporate a business in Washington comes with many opportunities to participate in various events, conferences, summits, and workshops on various business topics including setting up successful startups.
3. Choose an Appropriate Structure for your Washington Business
Bear in mind that there are several decisions you must consider before you register a business in Washington. Choosing the most suitable entity structure for your company to be identified as one of the most pivotal decisions you as an owner can make. It is important to note that each type of structure has its own advantages and limitations including tax treatment.
Whether you choose to form an LLC, incorporate in Washington, or go with a sole proprietorship; each structure will cater to specific business objectives or goals, both in the short and long-term planning. Therefore, it is extremely important to conduct research and take the time to decide on the most appropriate structure for your company. The type of business entities you can choose in Washington are:
One of the most reputed Washington registered agents like IncParadise can help you start a new business in the state.
4. Naming Your Washington Business
The two most fundamental elements of any branding strategy are the business name and the logo. Business names create powerful visualization and have the ability to provide customers with an idea about the brand, product, or services. A company name also imparts significant value especially if you want to start a business in Washington and create a franchise soon after. When finalizing a business name, there are several aspects to consider including state naming requirements and guidelines. Let’s look at the naming guidelines and process according to the Washington Secretary of State:
- The business name in the state of Washington will vary according to the entity structure especially when it comes to the use of words and abbreviations. If you were to incorporate in Washington then the name should contain words like “corporation” or “incorporated” or abbreviations like “Inc.” or “Corp.”.
- The Washington business laws also state that a business name should be unique and distinguishable from any other business name in the state. This is made possible by conducting a name availability search. This process will help you to determine distinctiveness as well as the availability of the said name to be reserved.
- You will need to reserve your company name before you register a business in Washington. The reservation fee and forms are the same for all types of entities and you have the option to expedite the process by paying an additional fee. The name reservation application must be submitted to the office of the Secretary of State, Corporation Division.
5. Choose The Best Location for Your Washington Business
When you start a business in Washington one of the most significant focal points is the location of your company. Location plays an integral role in the success or failure of any business. When envisioning the location of your business, consider several key elements like the availability of an educated workforce, access to the state infrastructure, who your competition will be, your target customer base, and the overall market conditions.
Let’s look at an example to better understand this point. Seattle is considered to be one of the top tech hubs in the Pacific Northwest, as well as the nation. So if you were to start a business in the tech industry then Seattle would most likely be your first choice. There are several top cities where you can incorporate your business in Washington, or form a new business and these include:
Here are some of the chief elements to focus on when choosing the right location to register your business in Washington:
- Transportation and logistics are vital details as they enable the movement of products or goods. If your company is in the manufacturing or retail industry then emphasis on these features are crucial. You can also choose specific industrial hubs in the state as they offer a robust transportation infrastructure as well as several business incentives and tax credits. Such hubs include opportunity zones that may offer various advantages when incorporating businesses in Washington.
- The availability of educated and professional talent is also vital concerning the success or growth of any business. Sometimes locating your business in a city with a maximum number of universities and other skill-developing institutions can be quite beneficial.
- It is important to check the city or county zoning ordinances where you plan to oversee your business. These regulations provide information and rules concerning commercial spaces, city or county licensing and permits, building codes, and land use.
6. Register Your Business with The Washington Secretary of State
Starting a business in Washington requires particular state-governed processes and requirements which must be met. You will have to complete and submit documentation determined by the type of entity structure you wish to form. The governing laws, processes, forms, and fees may vary according to the entity structure. The new business registration documents have to be filed with the office of the Washington Secretary of State, Corporation and Charities Division. Let’s look at an example to understand this.
Example: If you want to form a C Corporation then you will have to submit the Articles of Incorporation of a Profit Corporation with the Washington Secretary of State pursuant to WA Rev Code § 23B.02.020 (2016). The processing fee for the incorporation documents will be $180 and the process can be expedited by paying an additional fee of $50. Similarly, if you want to register a business in Washington as an LLC then you will be required to file a Certificate of Formation along with a filing fee of $180 pursuant to WA Rev Code § 25.15.071 (2016).
The most important part of the filing process is the preparation of the Articles of Incorporation or Certificate of Formation, which may seem like a complex process as you are required to provide a wide variety of information. This is where a reputable Washington registered agent service like IncParadise can assist you. Whether you want to form an LLC or a corporation, we can help you to register your company with the state.
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7. Get Your EIN
Once you register a business in Washington, you will be required to fulfill certain Federal and state requirements. One of the most important requirements is that of business taxes. Consequently, you will need to apply for and obtain an Employer Identification Number (EIN) to file a business tax return. The EIN is a unique tax ID number issued by the Internal Revenue Service (IRS) and not all forms of businesses require it.
8. Open a Business Bank Account for Washington Business
Whether you are planning to incorporate in Washington or start a small sole proprietorship firm, it is extremely important to establish certain business practices in the initial phases itself. Since, managing finances is a crucial aspect of any new business; it is always recommended to open a business bank account. This account unlike your personal account will focus entirely on business-related expenditures and earnings. Although it is a legal requirement for certain forms of entities like a business corporation, there are several benefits of a checking account that any entity structure can enjoy. You can open a business bank account before or after you register a business in Washington. Some of the benefits are:
- Your company bank account will help with tracking business income, thus reflecting overall business growth.
- It will make it easier to track your business expenses and will enable client or vendor payments
- It will help in streamlining company financial records as well as tax information
- Having a business account increases credibility
- Help in providing clear records of audits
- Plays a key role in establishing business credit
9. Obtain Necessary Washington Business License and Permits
There are several state requirements that every new business needs to meet in order to run smoothly. One of the most important requirements is obtaining a Washington business license, which will enable the business to be operational in the state. Even if you register with the state, you will not be able to conduct your business without licenses or permits. You may need single or multiple licenses and it will vary on the type of business activity and the location. Let’s take a look at Washington state business licensing requirements.
- Business License Tax Certificates – This is a form of general license or Washington business license that is issued by the Department of Revenue. You can apply for this by using a Business License Application (BLA) after you register a business in Washington. The Business License Tax Certificates can also be issued by the local authorities or License and Tax Administration agencies in cities and counties.
- County Specific Licenses – A Washington business license or permit can also be issued by a county depending on the business activity, and the county where the said business is located. There are several types of activity or even industry-specific licenses and permits issued by counties.
Example: If you start a business in Washington as a permanent food establishment then the permits required may vary from one county to another. If your establishment is located in King County then you will need to file an application for a permanent food establishment along with a Plan Review Application.
It is important to note that some businesses may even need occupational licenses or regulated industry licenses depending on the business activity or profession. The Washington business licensing regulations and requirements can be fairly complex, and this is where IncParadise can help you. We offer a “Business License Research Report” service, which is a detailed report containing a list of filing instructions, supporting document requirements, and fees for all business licenses and permits in this state.
10. Register for Taxes
Once you register a business in Washington, there are several types of state or business annual maintenance requirements that you must also fulfill. These requirements can vary from one state to another, although the most particularly common is taxes. The business structure you choose may determine the type of taxes applicable to your business.
Washington is considered to have one of the best business tax climates in the nation and the most common tax applicable is the Business & Occupation Tax. The state also has sales & use tax as well as property tax. After you incorporate in Washington you will need to file taxes with the Department of Revenue (DOR). Therefore, you will need to set up a SAW User ID (SecureAccess Washington account).
11. Annual and Ongoing Requirements
Once you register a business in Washington, you will be required to fulfill specific annual state requirements. Meeting these requirements will allow the business to enjoy active status. The type and nature of annual requirements can vary from one state to another. For example, if you obtain a Washington business license then you will need to renew it each year. Similarly, you will also be required to file annual tax returns for your businesses such as corporate tax and sales or use tax.
One of the most important annual requirements when starting a business in Washington is the annual report. There are a variety of entities that are required to file this report including Limited Liability Companies, Profit Corporations, and Limited Partnerships among others. The report has to be filed with the Washington Secretary of State, Corporations & Charities Division along with a filing fee of $60.