Until now, your business dream is still just that. The first concrete step on your path to business ownership is the paperwork that makes it official. This will include several important decisions, including how you will structure the business, what it will be called and where it will be based.
Getting this initial paperwork filed opens the doors to so many other exciting aspects of business ownership. Among other things, you will be able to secure an Employer Identification Number (EIN) and any permits or licenses needed to operate. In that sense, this is an important milestone, even if officially declaring yourself “in business” doesn’t seem particularly important to anyone but you.
In the Sunshine State, you must complete several steps before you are officially considered to be a functioning business.
01 / Choose a structure
You have four options: sole proprietorship, partnership, corporation or limited liability. Your decision will be significantly impacted by the type of business you own and the number of employees you plan to hire. See dba Florida™ for guidelines and detailed descriptions of each structure.
02 / name Your Business
Your business needs a name. You can get creative or stick with a more obvious choice — your own name, for example. The latter option might be fine for a professional services firm, but you will want something catchy or memorable if you are going to own a restaurant, retail site or some other specialty business.
Here are a few guidelines to keep in mind:
- Keep it concise: fewer than 10 letters
- Make it flexible: adaptable to new products and/or locations
- Be original: not already in use (search trademarkia.com or uspto.gov to be sure)
If you are going to conduct business under a name other than your own, you must file a Fictious Name registration application with the Florida Department of State, Division of Corporations. See dbaFloridaTM (page 46) for more information.
03 / Find a location
One of your most important decisions is figuring out where you will put your business. As you get started, keep your options open and avoid falling in love with a particular neighborhood or commercial property until you have thoroughly vetted the location. Signing a multi-year lease is a huge commitment that could lead to regrets down the road. Before signing on the dotted line, ask yourself a few key questions:
- Is the area zoned for your type of business?
- Is it safe?
- Are you near a quality labor pool?
- Are surrounding businesses complementary or competitive?
- Can you afford the monthly rent?
- Do you even need a dedicated location? Could you work from home instead?
04 / Obtain an Employer Identification Number (EIN)
To pay your federal, state and local taxes, you need a federal employer ID number. Your Social Security number is all you need if you are operating as a sole proprietor with no employees. Otherwise, visit irs.gov/businesses to obtain a free Employer Identification Number (EIN).
05 / Open a Business Bank Account
After you get your Employer Identification Number, open a business bank account as soon as you are ready to collect or spend money for your business. There are several options to consider, including checking, savings, credit card and merchant services accounts. A business account offers several advantages over your own personal bank account, including some personal liability protection by keeping your business and personal funds separate. Allowing customers to pay your business (instead of you) makes you appear more professional. A business account may also give you access to a line of credit for emergencies or equipment.
06 / Secure necessary permits, licenses or registrations
If you aren’t a sole proprietor with no employees, it is also likely that you will need one or more of the following to legally open and operate a business:
- Zoning Permit
You will need this before you can obtain a business tax receipt. Apply at either the city or county zoning department, depending on your location. Some jurisdictions require both. - Business Tax Receipt
(aka Occupational License)
Cities and counties typically issue separate business tax receipts. However, you may need both if your business is within city limits. Contact your municipal and county government offices for clarification. - Report New Hires
If you are hiring any employees, you are required to report them to the Florida Department of Revenue within 20 days of their start date. This rule also applies to independent contractors, if you pay them $600 or more during a calendar year. The revenue department offers several reporting options, including through its website. - State and Professional Business Licenses
More than 300 job categories/professions are required to get a license from either the Florida Department of Business and Professional Regulation or the Florida Department of Agriculture and Consumer Services. Health-related professions/businesses are licensed and regulated by the Florida Department of Health. Costs vary and applicants must meet established criteria. - Health Permits and Licenses
Public lodging and public food service businesses are required to have these, which are available from the Florida Division of Hotels and Restaurants. For licenses related to retail food stores, food processing plants and food storage/distribution businesses, visit the Florida Department of Agriculture and Consumer Services’ website: fdacs.gov. - Beverage Licenses
Businesses that sell alcoholic beverages need a beverage license through the Florida Department of Business and Professional Regulation. Fees vary based on the type of beverages sold or served. Retailers and wholesalers of beer, wine or liquor must pay federal occupational taxes and obtain a control number from the U.S. Department of the Treasury. - Retail Establishment Licenses
If you are involved in financing the retail sale of goods or services sold by installment contract or revolving charge accounts, you must be licensed by the Florida Office of Financial Regulation. Also subject to licensing: collection agencies, consumer finance companies, mortgage brokers, securities dealers, investment advisors and mortgage business schools. - Environmental Permits
Any business that is an actual or potential polluting source, must have these permits. One-time construction permits and renewable operating permits are also required. Permits are also required for dredge and fill, stormwater construction, water treatment and sewage treatment activities. Apply through the Florida Department of Environmental Protection.
For more detailed information about permits and licenses pertaining to your specific business, visit myflorida.com/dbpr and sunbiz.org.