The United States is the land of opportunity for many. Many migrate to this country in hopes of starting a profitable business.
In order to set yourself up for success, it’s important to register your business properly and understand the market that you’ll be competing in. In this article, we’ll outline the types of business entities and the necessary steps to establish your company. Using this information, you can build the foundations that will help you achieve the dreams that brought you to this country.
How to Start a Business in the U.S.
Starting a business requires planning and strategic decisions-making that will lead to the foundation for a successful enterprise. To help you choose the best type of business for you, the Small Business Administration (SBA) recommends:
- Researching the market and analyzing the competition.
- Creating a business plan.
- Calculating the cost of launching the business.
- Deciding how to finance your enterprise.
This information will allow you to make more thoughtful decisions around the type of business you’ll be successful with. It’ll also help you decide the most appropriate way to register your business.
Before starting the registration process, SBA guidelines recommend that you:
- Pick your business location
- Choose a business structure
- Create a business name
The Company’s Physical Address
Your business’ location is more than just a storefront. It’s an important piece of information that determines the taxes you’ll pay, the regulations that you must follow, and the zoning laws that can affect your business.
It’s important to understand state and local taxes, as well as the fiscal incentives that are available to small businesses in your area. If you need help choosing your location, don’t hesitate to get professional advice. Lawyers and tax experts can help you gather the necessary information to make better decisions about your business’ future.
The Company’s Business Entity
There are many types of business entities in the United States. The structure you choose will affect your tax return, the type of loans that you can obtain, and your responsibilities as a business owner.
The most common types of entities include:
- Sole proprietorship. You have full control over the company. By the same token, you’re responsible for the company’s legal and financial obligations.
- Partnerships. When two or more people launch a business together, they can form a Limited Partnership (LP) or a Limited Liability Partnership (LLP).
- Limited Liability Company. Known as an LLC, this type of entity creates an independent commercial structure that’s separate from your personal property and legal personality. Your LLC’s gains and losses are considered personal income and reflect as such on your tax return.
- Corporations. C and S corporations have their own income and tax returns. The difference between both entities is the way that the federal government taxes the shareholders’ gains.
- B Corporation. Benefit Corporations are for-profit entities that include a positive impact on society, workers, and the community. Some states require additional annual reports for B Corporations to maintain this legal status.
- Nonprofit corporations. With corporate laws that are similar to those of traditional corporations, nonprofits are dedicated to philanthropic, educational, religious, literary, or scientific work. Nonprofits don’t pay federal or state taxes on their gains.
How to Register a Business With the Government
Once you know the type of business you’ll launch and how to structure it, you can start the official registration process. The steps for each process depend on the type of business you’re starting. Below is a brief guide for each type of entity.
Most small businesses only need to register the company name to formally go into business. Remember that your company’s name is also your brand’s foundation. Registering your name is important for brand recognition and legal compliance.
Depending on your legal structure and your business’ location, the SBA outlines four ways to register your business name:
- Entity name: Provides state-level protection by identifying your company and preventing others from going into business using the same name.
- Trademark: Offers federal-level protection by preventing other companies in the same or similar industry from using your business name.
- Doing Business As (DBA): If you’re a sole proprietor, you may need a DBA to run your business. Although a DBA doesn’t offer legal protection, it allows you to open business bank accounts and is required for obtaining a federal tax ID number, also known as Employer ID Number (EIN).
Keep in mind: Once you’ve established your business name, you might want to get your website domain name. Although your website doesn’t have to be the same as your business name, business owners often make them similar to help customers find their business online.
Most businesses don’t require federal registration, but they do need to have their own EIN. You can apply for an EIN with the IRS using your social security or tax ID number.
Partnerships, corporations, and nonprofits must register with the state when:
- They have a physical address in any particular state.
- They meet frequently with clients in that state.
- They receive a significant amount of income from that state.
- They have employees who work in that state.
The registration process varies by state. In most cases, you’ll need to register with the Secretary of State or the Business Bureau. Some institutions accept online applications, while others only accept hard copies of paperwork.
The following table is a summary of the documents required to register your business at a state level:
Type of Business Entity
Articles of incorporation
Certificate of limited partnership
Limited partnership agreement
Limited Liability Partnership
Certificate of limited liability partnership
Limited liability partnership agreement
Corporation (of any type)
Articles of incorporation
Bylaws or resolutions
LLPs, corporations, and nonprofits need a registered agent who represents the business before the state in order to complete their registration.
A registered agent receives legal and tax documents on behalf of the company. These documents include renewal reminders, annual reports, legal notices, or any other official correspondence between the company and the state. Your registered agent could be a lawyer, an officer, or an employee of the business.
Fees to Pay
Registration fees vary depending on the state and type of business entity. They’re often less than $300.
Every local government has its own registration requirements. In most cases, you don’t need to register your company at the city or county level. You may need certain licenses and permits depending on your industry and business type.
10 Successful Business Ideas in the United States
There are many types of companies and markets in the United States. The following are businesses have been the most successful in recent years:
The popularity of vegan food has increased due to its nutritional value and health benefits. If you want to launch a vegan food business, here are a few benefits:
- Lower-cost ingredients.
- Sustainable and eco-friendly business.
- Providing meal options to the vegan community.
The disadvantages can be:
- High competition.
- Difficulty finding suppliers.
- The profit margins tend to be low.
Barber Shops and Hair Salons
Barber shops and hair salons are recession-proof businesses. They’re very popular and offer the following benefits:
- They attract diverse clientele.
- You can set your own hours and enjoy a flexible schedule.
- There’s a high earning potential.
These are some of the possible disadvantages:
- You might need expensive equipment.
- It can be repetitive.
- It might be difficult to scale the business.
The Internet makes it easy to sell all types of products online. With a fast connection, good merchandise, and a good social media, you can enjoy the following benefits of having an online store:
- Freedom to choose your own working schedule.
- No need to pay rent at a physical storefront.
- Your profits can grow quickly.
Some of the cons of this type of business are:
- There’s little in-person interactions with the customers.
- You’ll need to account for shipping costs of your merchandise.
- You may have to invest in online ads or other type of marketing.
From grooming services to walking, pet owners always need help caring for their pets. If you’re an animal lover, these are some of the benefits of this line of work:
- Frequent contact with animals
- Lots of physical activity
- The option to work independently
Some disadvantages include:
- Lower wages
- A risk of getting bit or scratched by an animal
- You may need to get insurance for your business
Cell Phone and Mobile Device Repairs
Most people own a cell phone or mobile device. When these devices get damaged, they often need repairs. The benefits of offering cell phone repair services include:
- It’s a relatively easy skill to learn.
- It has a low initial cost.
- There’s high demand for these services.
Some disadvantages are:
- Long sales cycle.
- High level of responsibility for expensive devices.
- Your income might fluctuate from one month to the next.
Marketing and Advertising Services
Marketing and advertising are creative fields that interest a lot of people. If you want to start a business in this industry, you could enjoy the following benefits:
- High earning potential.
- The possibility of working with clients from around the world.
- The opportunity to work on a wide range of projects with different types of clients.
Some disadvantages are:
- Long hours in front of the computer.
- You’ll have to develop a particular skill set.
- It could be stressful .
If you’re passionate about health and physical activity, you might consider starting a business as a personal trainer. Some of this industry’s advantages include:
- Staying in shape while you work.
- Developing close relationships with your customers.
- Setting your own schedule.
The disadvantages of being a personal trainer can include:
- Little job security.
- Higher risk of injury than other professions.
- Limited work opportunities for older individuals.
Massage and Relaxation Services
Massage and relaxation services are quite popular. From athletes to individuals with special needs, massages can offer tremendous benefits.
These are some of the benefits of owning a massage business:
- You can provide a variety of services.
- Your schedule can be as flexible as you want it to be.
- You can work independently.
The disadvantages of this industry include:
- It requires certification.
- It’s physically demanding.
- Finding clients can be challenging.
Speaking two or more languages can offer great advantages and job opportunities. These are some of the benefits of owning a company that offers translation services:
- It can provide a stable work schedule.
- You can work with many types of clients in different industries.
- It’s fairly stress-free.
Some of the disadvantages of translation work include:
- Not always a lot of room for promotions (if working for an enterprise)
- Instability - There is no guarantee of work (if working as a freelancer)
- Spend many hours in front of the computer.
Fast Food Franchises
If you dream of owning a restaurant but prefer a turn-key business solution, consider investing in a fast food franchise. Its advantages include:
- Very high profit margins.
- Built-in marketing support.
- You don’t need to invest your own money for brand recognition.
Some of the disadvantages of franchise food chains are:
- They require a big initial investment.
- You’ll probably need different types of licenses.
- Staff retention is often a challenge.