Virtually every business will need at least one type of license or permit to legally operate in the state of California. Unfortunately, knowing exactly what license you may need to operate in your region and in your specific industry can be a headache. Depending on the type of business you operate, you may need to obtain local, county, state, or federal business licenses. Fortunately, California makes it a little easier through the CalGold website, a tool that allows you to search by city or county and type of business to see what permits you will need and which regulatory agencies administer them.
When starting a business in California, the first thing you'll need to do (after thinking about your business idea) is to choose a name for your business and decide on the structure of your business. Once you have decided on the name and structure of your company, the next step in starting a company in California is to write a business plan. Just like drawing up plans before building a home, a business plan creates the solid foundation on which you'll build and grow your business. Starting a business in California also means paying taxes for that business.
There are several agencies responsible for administering taxes at the state and federal levels, as well as state agencies and programs that help you navigate the small business taxes you must pay, such as the Franchise Tax Board, the California Tax Services Center, and the Department of Taxation of California and Rate Management. While the Secretary of State handles many business-related forms and filings, business licenses and permits are not at the helm of the department. To get the necessary licenses or permits you'll need when starting a business in California, the CalGold website, hosted by the California Governor's Office of Economic and Business Development, is your go-to resource. While this site itself does not issue permits or licenses, it lists the appropriate agencies you will need to contact.
First, select your city or county and type of business. With your business legally ready to open its doors, there is still a question of whether you are financially prepared. Starting a business in California isn't cheap, especially depending on the type of business you want to open. Whether you're looking for a startup loan, equipment financing, or a business line of credit, exploring your financing options can help you determine exactly what's possible when starting a business in California.
There's a lot to continue to do after taking the first steps above; after all, these are just the steps you should take if you're starting a business in California. You'll also want to look for small business insurance, hire employees, create a marketing plan to spread the word about your new business, find a location if you're going to need a physical store or office, and more. If you realize that you need some extra money to start your business, there are several financing options you can explore, even as a startup. SCORE is made up of active, retired entrepreneurs who volunteer their time to support start-ups.
If you are a sole proprietor and do business under your own name, you can simply use your name as the name of the business entity. Companies that are structured as LLCs or corporations in California can pay taxes at both the state and federal levels. The California Governor's Office of Economic and Business Development has a handy search tool that can help you find what licenses and permits may be needed for your operation. Regardless of the structure of your business, you may need to obtain a business license, permits, or both to operate in the State of California.
Most small businesses won't need to obtain federal licenses or permits, but depending on the size or activities your business performs, you may need to obtain a federal license. You usually pay a fee to get a local business license in California, but some cities exempt very small businesses from paying fees. However, depending on the structure of your company and the number of permits and licenses your company requires, it could cost several hundred dollars or more to get started. That means you don't need to have a license from the State of California just to run your business in the state.
The California Business Investment Services unit offers customized site selection services for businesses, real estate executives, and site selection consultants. For help deciding the location of your business, contact the California Business Investment Services unit of the Governor's Office of Economic Development (Go-Biz). You will need to keep business and personal finance separate by opening a business bank and credit accounts. Basically, try to make the operational aspect of the company as automated and efficient as possible so that you can focus on growing your business.