You’ve been knocking on entrepreneurship’s door for a while, and now, you’ve finally made the decision — you’re going to start your business in the Buckeye State. Propel your business forward with the same keen eye that Ohio native Annie Oakley used for her sharpshooting by following these 13 steps to Ohio entrepreneurship.
13 Steps to Starting an Ohio Business
Starting a business takes knowledge about your business and the state you’re establishing in. Ohio’s done a great job creating brochures, web pages, and guidelines for starting businesses in the state; pair that with your business strategy, and you’ve got yourself a great start.
1. Research Ohio’s Laws and Regulations
First, let’s get into Ohio-specifics.
- When you organize your business, you’ll be going to the Ohio Secretary of State website.
- The Ohio sales tax rate is currently 5.75%.
- Businesses that make over $150,000 in annual income have to pay Commercial Activity Tax (CAT).
- The Ohio Department of Development is a fantastic resource for anyone who needs business guidance, including special content for minority- and women-owned small business owners.
2. Source and Secure Funding
There are two main ways you can fund your business: through self-funding or through borrowed money. If you’re looking to wait a few years to start your business, you can find a high-yield savings account to put money away in each week or month to pay for startup costs. Then, when you’re ready to open your business, you’ll have a solid cushion to start! If you need a bigger sum of money, you could also borrow money either from a national bank, local credit union, or through public or private lenders like the Small Business Administration (SBA), a nonprofit, or an individual investor.
3. Develop a Business Plan
The Ohio Small Business Development Center collaborated with the SBA to create a bespoke template for Ohio business owners (though any resident could use it). Scroll to page 12 for a business plan guide to fill in your current plan.
4. Identify Your Target Market
Being customer-centric is one of the best ways to ensure your business thrives. It’s the difference between creating something that you love and something that others will spend money on. Start with a few of these ideas:
- Establish the problem you’re solving — Every business solves a problem. Some seem obvious, like a tire repair store, while others seem complex, like a bagel shop. How in the world can a bagel be solving a problem? Well, think about the working mom, who wants a filling enough breakfast to get the whole family fed before school and work. That’s where your bagel shop, a fast breakfast solution with a special deal on purchasing a family-sized dozen, can shine.
- Gather customer data— if you offering a service to customers currently, find out why they’re using your business solution to help, and if you don’t yet have customers, find your potential competitors, and research their customers.
- Find a customer’s “why” behind their purchase— this ties into the problem they’re looking to solve, but can go a bit deeper. Find out why your customer needs this solution, even deeper than needing a quick breakfast. What gets them up in the morning, and how does your product help them stay happy throughout the day?
For a full breakdown, check out BluLeadz Target Market Analysis Worksheet.
5. Plan Your Projected Costs and Pricing Structure
A business’s startup costs are sometimes dependent on the business type itself, and we’re not talking LLC or C-corp (just yet).
If you’re a service-based business, like a freelance graphic designer, dog walker, or website developer, you may be able to start your business with just a few purchases, like the Adobe Suite, a few dog leashes, or web development software. Not all service-based businesses have a small start-up fee— like a full-service car wash— but could start with minimal materials to keep costs low until you start growing (like a bucket, soap, and some rags!).
If you’re a product-based business, like an Etsy clothing seller, a food truck, or a woodworker, you’ll probably need a larger upfront fee. E-commerce entrepreneurs need to consider their proximity to frequent locations where they purchase materials, like JOANN or Lowes, and where they ship their products, like FedEx or UPS, and the cost of gas it takes to travel there.
For both business use cases, you can choose several pricing structures: a one-time fee will cover the purchase of a product or service and a subscription fee will cover an ongoing retainer or number of deliverables per month.
6. Plan Your Store Location (or Your At-Home Business Location)
If you’re a storefront owner, consider foot traffic, nearby shops, and patron frequency when finding a physical location. If you’re working from home, think about the proximity you’ll have to necessary outlets like suppliers or shipping carriers.
7. Operation Strategy
This might sound too fancy too soon, but you can start an operational strategy without hiring anyone. Carving out an operations plan now will clarify your business’s needs and connect them to your managerial values, so new hires become crystal clear on your goals when they onboard.
If you’re feeling stuck, start writing out SMART goals, which stand for Specific, Measurable, Achievable, Relevant, and Time-Bound goals.
8. Marketing Strategy
Your marketing strategy widely depends on how much capital you have to invest. Thanks to social media, you can start marketing your business for free with just an Instagram account and a Facebook page. Post in Facebook groups where your target market is hanging out, and in entrepreneurial groups for gaining extra insight and asking questions, while you’re at it. Once you get the budget for a website, start writing blog posts to get your name out to build virtual rapport with search engines or create a YouTube channel, and once you get even bigger, you can invest in things like billboards or Facebook ads if you need.
9. Decide on Your Business Structure
An unincorporated business entity that is run by a single owner. The business owner of a sole proprietorship, however, is not protected from being held liable for personal damages if legal action were to ensue.
Also an unincorporated business structure, but created by more than 1 business owner. The liabilities are also connected to each business owner (or member), not to their business.
Limited Liability Company (LLC)
An incorporated business structure for business owners that has liability protection with flexibility in management and taxation.
A structure where two or more entrepreneurs go into business together, but are only held liable for the amount of money they invested.
An incorporated business that’s either an S-corp that has fewer than 100 shareholders or a C-corp, which is for larger organizations and owned by stockholders.
10. Register Your Business Name and Obtain an Ohio Tax ID Number
To keep it unique, your business name can’t be the same as any other business name in Ohio. Don’t worry— you’ll be able to check this when filing your Articles of Organization with the Ohio Secretary of State. After successfully establishing your business, you’ll be prompted to register for your tax ID number or Employer Identification Number (EID). This is a free service to Ohioans to establish their business as legitimate.
By the way, if you’re a sole proprietor or an LLC, you can use either your social security number or your tax ID number on your tax returns— it’s up to you.
11. Obtain Other Coverage, Licenses, and Permits and Purchase Insurance
Now that you have your general business responsibilities ironed out, it’s time to focus on your business in particular, figuring out what coverages, licenses, permits, and insurance you need to legally operate.
For example, if you’re a restaurant, consider the many licenses and certificates you need to receive. Including but not limited to a Certificate of Occupancy, a Food Handler’s License, a Seller’s Permit, a Liquor License Permit, a Catering Business License, a Food Facility Health Permit, and an Employee Health Permit.
Then, think of Ohio-specific licenses you might need, like an Ohio Vendor’s License for retailers, or an Ohio Sales Tax Exemption Certificate to avoid paying sales tax to resold merchandise.
12. Open a Business Bank Account
You’ve got your business officially established in Ohio; now, before everything gets muddy, create a business bank account to separate your business purchases from your personal purchases. We have a whole article on the best banks for small businesses, which includes our very own doola business bank account.
13. Start Marketing Your Business
In step 8, you developed your marketing strategy— now, let’s keep it going! As you build, create a website for a digital one-stop shop for your services. Add on a blog to start building leads from SEO strategies, and continue posting on your social media accounts to engage with and grow your audience even more.
Your Ohio Business + doola = Entrepreneurial Success
You’ve just about started your Ohio-based business, now it’s time to grow. doola’s bookkeeping services are a simple way to get financials off your plate so you can focus on what you love about your business.
How much does it cost to start a business in Ohio?
The current cost of registering your business in Ohio is just $99! Factor in additional costs like startup fees, licenses, and permits.
Is Ohio a good state for business?
Yes, Ohio has some great programs to help you kick off your business, like the Ohio Department of Development website, which helps support both growing and established business owners of all types.
Do you need a business license to start a business in Ohio?
If you’re registering an incorporated business, like an LLC, or Corporation, then you need to register your business (which is sometimes called getting a business license). Consider the other licenses you’ll need to practice in your particular field, like a barbering license, food handler’s license, or liquor license.
What are the requirements to start a business in Ohio?
Register your business with the Ohio Secretary of State. From there, determine what business licenses you need to legally run your business. Once you’ve acquired them, you’re well on your way to starting your business legally in Ohio.
Is it easy to start a business in Ohio?
Starting your business in Ohio can be complicated, even if you think you’ve followed all the guidelines. For maximum simplicity, work with a business formation company like doola to walk you through the process and ensure you don’t miss anything when filing.