Things You Need to Know Before Starting a Business in California

Since the coronavirus pandemic struck the world, the economy has vastly been affected– leaving most people unemployed. However, despite the massive spike, most Americans opt to work and earn more– shifting the business climate uncertainty into creating new ideas to begin their own businesses, especially through online transactions. Online businesses have to be headquartered in a specific state, California for example, and go through bureaucratic steps to run legally. With this recent boom of online start-up businesses, there are a few things you need to consider if you also plan to start one.

1. Choose a name for your business and buy a domain

Once you have decided to start a business, the first thing you need to do is to choose a business name that best describes the service or product you will offer and claim your domain. Having your domain name that matches your brand is a good move, which allows you to steer customers on your page for as long as it contains high-volume SEO keywords in it.

2. Create a Business Plan

Now that you have the initial idea of your business, creating a business plan will help you list and map out all the necessary steps before you hit the ground running. The business plan creates a clear direction for your business. It includes the executive summary, company overview, market analysis, and financial projections. By doing this, you will have a roadmap on the progress and development of your business.

3. Register the business with California

As a starting business in California, you will need to register your business entity with the California Secretary of State. Choose whether your online business will be a corporation, partnership, limited liability company, or limited liability partnership.

Depending on which of these business entities you choose, the entity registration process will cost you a fee of $20 to $150. The process of registering your business entity on a state level will mean your business name is registered on a state level, too. So, once you’ve completed this step, you’ll have officially laid claim to your business’s name in California.

4. Secure all necessary licenses and registrations

In order to obtain all the necessary licenses to legally operate your online business, make sure to check in on the federal, state, and local requirements specific to your industry, entity type, and city. You may visit the CalGold website– hosted by the California Governor’s Office of Business and Economic Development to get catalogs of the appropriate agencies you'll need to contact.

5. File the appropriate taxes

Part of starting your business in California is paying taxes on that business. A number of agencies and programs responsible for administering taxes on a state or federal level are readily available to help you navigate the required tax payment for your business such as the Franchise Tax Board, the California Tax Service Center and the California Department of Tax and Fee Administration.

6. Explore funding options

After filing all the paperworks, start getting your finances in order by thinking about your financial plan and projection. Calculate your startup costs to figure out if you’ll be able to start your online business without external financing. If you can’t fund your startup out-of-pocket, there are plenty of small business loan options in California. If you’re hesitant to take on debt, VCs, friends and family loans, and crowdfunding campaigns are also solid startup funding options.

Today’s popularity of online business continues to grow and inspire others to be an entrepreneur. While being critical to the success of your startup online business is your primary objective, never miss out the importance of all the required legal documents to ensure the security of your business.

Written by Karisma Primero

Karisma Primero is currently a Digital Marketing Intern of PS Media Enterprise, and a 3rd year Broadcasting student at the Polytechnic University of the Philippines - Manila.