How to Start a Business in Ohio
Ohio is the seventh-largest economy in the United States, generating $698 billion in GDP in 2019. In that same year, 130,621 new businesses were created in the state. With these figures in mind, it is no surprise that entrepreneurs see Ohio as an excellent market full of opportunity.
Are you looking to build your empire in the Buckeye State? Keep reading to see how to start a business in Ohio!
10 steps to starting a business in Ohio
1. Reflect on your goals and business ideas
A business starts with a good idea. While your new venture doesn’t have to be revolutionary, you want to start something that solves a problem or satisfies demand in your market. Take some time to brainstorm ideas that will make life easier for your prospective customers. Write down everything that comes to mind, even if it seems unachievable.
Next, think about your personality and goals. Do you want to grow a multimillion-dollar business, or would you be happy owning a local pub? Will you invest all your time into this venture, or will it be a part-time business?
Answering these questions will help you narrow down ideas and find a business idea that aligns with your lifestyle. You may also want to read over the Ohio government’s small business startup guide.
2. Create a business plan
Any entrepreneur should take a measured approach when starting a business. Even if you are opening a one-person lemonade stand, forming a business plan provides immense benefit. This document helps you refine your idea, study your market, and launch your business in the most effective way possible.
A typical business plan includes:
- Summary: This section includes your mission statement, leadership biographies, and lists your main goals.
- Analysis: Here, you’ll study your market to gauge consumer demand. Likewise, you’ll run a competitor analysis to learn what other companies do right and if there is room for your business.
- Products: List your products and services, including where you will obtain your items from and how much this will cost.
- Strategy: State how you plan to sell your products, detailing your strategy, pricing model, and staffing needs.
- Financials: Here, you will project your future earnings and detail how you plan to repay your debt.
3. Form legal business and register with the Ohio Secretary of State
Any time you create a business, it automatically creates a sole proprietorship. This business entity falls under your personal control, so you will claim it on your annual tax return.
However, a sole proprietorship is not the business model if you will hire employees, sell anything that could expose you to liability, or take on a large amount of debt.
To prospect yourself and personal assets, considering forming one of these separate business entities:
- Limited liability company
- Partnership
- Corporation
Learn more about business structures with this Small Business Administration guide.
Next, visit the Ohio Secretary of State website to register your business. Here, you can find all the forms you need to get started as well as the fee schedule for filing paperwork.
4. Obtain your Employer Identification Number (EIN)
Next, you’ll need to contact the Internal Revenue Service to register for an Employer Identification Number. This EIN will be used to file taxes, pay employees, and process other legal matters. It works similarly to your personal social security number.
You may also want to look into the Ohio Small Business Tax Training Program to help you understand Ohio’s tax requirements.
5. Open a Bank Account
A bank account is mandatory for any business, but you cannot use your personal checking account. Not only do you not want to commingle personal and business funds, but you also want to make reporting as easy as possible. If you use your personal account for business matters, you’ll find yourself spending more time on accounting and tax filing.
Instead, open a business account at your bank or credit union. These accounts are often free or have a low cost, and some even offer incentives like cash bonuses upon signing up.
Once established, you can use this account to pay employees, write professional checks, and issue official invoices.
6. Obtain the proper licenses and permits
All businesses will need to acquire some licenses to sell goods or services. Retailers might need a Sales and Use Tax Exemption Certificate, and bars will certainly require a liquor license.
Use these resources to see what permits your business needs:
7. Insure your business
Insurance is mandatory for almost any business. Even if you do not legally need it, obtaining insurance is a wise move. You never know what accidents will occur that could cause serious financial hardship.
Some typical business insurance policies include:
- General Liability Insurance
- Workers Compensation Insurance
- Professional Liability Insurance
Any business should have a general liability policy to protect against lawsuits. If you employ anyone besides yourself, Ohio requires you to carry workers compensation insurance.
8. Choose a location
Thanks to the growing e-commerce industry, many new businesses do not need a physical location. All you need is a computer and an idea to create the next best thing.
However, you will still need a digital location, most often in the form of a website. Using platforms like BigCommerce and Shopify are excellent ways to build an online presence and connect with the world. These services offer search engine optimization plugins and stay up to date with cybersecurity trends.
If you are following a more traditional business model, you will need a physical location. The ideal location will align with your business structure, making it easy to get off the ground.
As you search for this commercial space, make sure to consider these factors:
- Location: Often the most important factor for most people, location will make or break your business. Look for a space that is easily accessible by your target market, but remember that you will pay more for prime real estate.
- Cost: Rent will be one of your largest expenses, but you will want to minimize it as much as possible. Choose a location that keeps your rent to revenue ratio under 20 percent.
- Size: Does the space allow for growth if your business is a massive success? Choosing a location that is too small will force you to move if you grow, interrupting your business and affecting your finances.
- Compatibility: While you do not want to open right next to a competitor, your store or restaurant should be near similar businesses. That’s why many stores only exist in shopping malls; they would not survive as standalone buildings.
9. Invest in supplies and equipment
Once the red tape is out of the way, you can buy equipment, stock your shelves with products, and decorate your business. Since you want to start off on the right foot, double-check that you have everything you need and be sure your equipment works well.
During this process, you will need to choose what hardware and software suite will power your business. For most retail and hospitality businesses, this means choosing your point of sale system.
These devices function as modern cash registers, but that is not all. On top of collecting payments and finalizing transactions, a POS can simplify the overall operations of your business.
For example, Epos Now systems can:
- Monitor inventory in real-time and re-order items automatically
- Track employee hours and calculate payroll
- Integrate with e-commerce platforms like BigCommerce and Shopify
- Export data to QuickBooks and other accounting programs
- Connect to the cloud, giving you 24/7 remote access
If you’re looking for a reliable point of sale, contact Epos Now to learn more.
10. Start marketing
Once your business is ready to open, you’ll need to create a marketing strategy to spread the word. Even if you are a small salon in a tiny town, you can benefit from a marketing campaign.
Before you start advertising, you want to review your business plan to locate your target audience. Most of your campaign’s budget should go toward these people; otherwise, you will likely waste money by addressing the wrong audience.
Some excellent advertising tactics include:
- Sending direct mail flyers to nearby homes
- Running social media ads targeting your ideal customers
- Placing advertisements in local newspapers
- Hanging flyers in local coffee shops or other gathering places
- Hosting a grand opening event with free items or other incentives
Need a POS for your new business? Call Epos Now to learn more about our solutions.
