Are you ready to start a small business? Do you live in Florida (or are you planning on relocating there)? Good news: you’ve come to the perfect article.
If you had to start a business anywhere, Florida is a great place to do it. Aside from the beaches, sunshine, and fun attractions, Florida also had the highest number of new business applications in the US between January 2021 to January 2022, according to the US Census Bureau. Plus, Florida doesn’t levy state income taxes and has the sixth lowest tax burden in the US.
Read on for detailed steps on how to start a business in Florida, including how to plan, structure, and get your business off the ground.
Interested in how to start a business in Florida? Follow these steps
In this section, we’ll guide you through how to create and register your business in Florida, as well as financial and practical considerations so you can set yourself up for success.
- Plan your business
- Determine the structure of your business
- Register your business with the Department of State
- Register for an employer identification number with the IRS
- Register your business with the Florida Department of Revenue
- Apply for a licence or permit for your business
- Get funding for your business
- Insure your business
- Set up banking and accounting for your business
1) Plan your business
If you’re reading this article, then you probably already have an awesome business idea brewing. Or maybe you have a strong entrepreneurial spirit and just need to get those creative juices flowing. Either way, starting off with a solid idea for a business is your first step to success.
Choose your business idea
The first (and probably the most important) step to starting a business in Florida is picking your business idea. Choose something that aligns with your interests, goals, or skills. Running a business takes a lot of work and dedication, so you’ll want to choose a business idea you’re actually passionate about (it’s not just about the money 😉)!
- Food trucks and restaurants
- Landscaping or gardening
- Real estate
- Senior care
- Nail salon
- Grocery store
- Cleaning services
- Tours and tourism
- Hotels and motels
- Auto repair shop
Make sure you think logically and strategically about your business idea, too: Do you have knowledge about your chosen industry? Do you have the money, resources, and time to invest into your idea (or a solid plan on how to get these things)? Is your idea lucrative?
Name your business
While it’s important to choose a name that’s catchy and on-brand, there are also legal rules you need to follow specific to Florida.
Generally speaking, your business name shouldn’t allude to any illegal activities or involvement with state or federal government agencies, and it should not be the same as any existing businesses in the state. The rules vary depending on your business structure, so we recommend doing more research on whichever one you choose to go with (but more on that later).
Once you have an understanding of the legal requirements, it’s time for the fun part: brainstorming names! Here’s a checklist of things to consider when coming up with your business name:
- Is it unique?
- Is it memorable?
- Is it simple?
- Does it look good in print and sound good out loud?
- Is it specific?
- Is it on-brand?
- Does it appeal to your customers?
If the creative juices aren’t flowing, try setting a timer for 5-15 minutes and writing down whatever comes to mind. You don’t need to choose the perfect name right away; this is just a no-pressure way to flex your creative muscles.
Create a business plan
A business plan is a 15-20 page document that provides a roadmap for your business. It’s not only useful for you to keep track of your goals and vision, but necessary for attracting investors. Crafting a well-written business plan is key to getting your business off the ground (...no pressure or anything 😉).
There are seven main components to a business plan that you should start thinking about:
- Cover page: This is the first page of your business plan and includes company name, logo, address, and any other information that may define your business.
- Executive summary: This is your “elevator pitch”—a summary of the rest of your business plan to convince your audience to keep reading.
- Market opportunity: This is where you’ll talk about who your target customers are, and explain why your product or service will be in high demand.
- Marketing and sales strategy: Go into detail about how you plan to raise awareness of your business.
- Operations plan: Describe what is physically needed to run your business, including its location, office, and/or equipment.
- Team strategy: Here, you’ll talk about the structure of your organization: the owner(s), management team, board of directors, and/or employees, and what they’ll do.
- Financial projections: Describe how you plan to get funding and how lucrative you project your business will be within its first months and years.
We could talk about business plans all day, but since we’ve got more ground to cover, you can check out our article on How to Write a Business Plan when you’re ready.
2) Determine the structure of your business
Now, let’s circle back to business structure. There are four main business structures in Florida that we’ll go over: sole proprietorship, limited liability company, corporation, and non-profit. The business structure you choose will depend on your business idea and industry, since they each have unique benefits and drawbacks.
Sole proprietorship in Florida
A sole proprietorship is when you run your own business by yourself; you and your business are one entity. Sole proprietorship is a popular option for at-home businesses, home healthcare businesses, landscaping, catering, and house cleaning.
- Simplest structure
- Easy and inexpensive to set up
- Most common type of business in the US
- Good idea if you’re the only one running your business
- You (the owner) get total control over your business
- No corporate business taxes
- Bookkeeping is typically easier
- Less paperwork
- Small business deductions
- There’s no legal separation between you and your business, so you’ll personally have to deal with any debt or legal trouble your business may face
- May be more difficult to get funding, since lenders unfortunately see sole proprietorships as risky, and investors often prefer to receive equity in exchange for their money (which isn’t really a thing with sole proprietorships, since you’re the only owner)
- Selling your business in the future is more difficult because of tax implications and possibly the sale of debts
Corporation in Florida
A corporation is a separate legal entity owned by shareholders and is the most formal of all the structures.
- You are totally separate from your business
- Good idea if you plan on growing your business into a bigger company
- Limits the liability of owners and shareholders
- May seem more appealing to investors, making it easier to raise funding
- More secure
- Tax benefits make it easier to retain employees
- Forming a corporation is expensive and more work
- Lots of paperwork
- More regulations and complexity
- No small business deductions
Limited liability company (LLC) in Florida
LLCs are the best of both worlds: you get the liability protection of a corporation, with the tax benefits of a sole proprietorship. If you have more than one member the ownership is shared, so each member has the right to vote and share in the profits. LLCs are a popular choice for businesses in the law or accounting fields, but all sorts of different businesses, both small and large, opt to form LLCs in Florida.
- You can have as little as one employee, or as many as you want
- Pass-through taxation (any tax that is due is paid at the individual level)
- Less formalities
- Can have subsidiaries without any restrictions
- LLCs are more expensive to form compared to sole proprietors
- Unlike a corporation, it is harder to transfer ownership
- Limited minimal case law protection
Nonprofit in Florida
Nonprofits are organizations used solely for a social benefit of some sort rather than to raise a profit. Unlike the other business structures, nonprofits are funded by donations, not investors.
- Tax exemptions, including corporate income tax
- Opportunity for grants
- Limited liability
- Employees/volunteers passionate about your cause
- Unless your business is registered, debts and liabilities fall on you
- Legal costs
- May be harder to find funding
- Less privacy: your financial statements are visible to the public and may be scrutinized
3) Register your business in Florida with the Department of State (DOS)
Decided on your business structure? Now things are getting real: It’s time to register your business with Florida’s Department of State (DOS) by submitting the articles of incorporation if you’re a corporation or non-profit. You will need the following information:
Once you nail down your business name, you’ll need to register it with the DOS. Remember your business name can’t be the same as another business. The DOS website will say “INACTIVE” or “INACT” if the name is available to use.
This is where your business will be located. Make sure to include your mailing address too if it’s different from your business address.
Haven’t decided where you want your business to be located? Some things to take into consideration are how lucrative the area is and whether you’ll need any permits to set up shop there.
A registered agent is a person or a business who will receive legal documents on behalf of your business. They are required in Florida. If you are over 18 and have a Florida address, you could be your own registered agent if you really wanted to. Most small business owners prefer to get a professional registered agent for the security and expertise, even though it can cost between $50-300 per year.
What does your business do (real estate, fitness, etc.)? Be as specific as possible.
If you have a corporation, your effective date is the day the Division of Corporations received and filed your articles of incorporation.
This part also only applies to corporations. Your number of stock shares is dependent on the number of people who own your corporation.
If you’re filing your articles of incorporation (for corporations and nonprofits), you’ll need to submit a payment.
4) Register for an employer identification number (EIN) with the IRS
An employer identification number (EIN) is a unique number assigned by the Internal Revenue Service (IRS) that identifies your business. It comes with some perks: it’s easier to open a business banking account, get loans, establish credit, hire employees, and apply for business licenses. Registering for an EIN usually isn’t necessary unless you elect to be taxed a corporation or have multiple owners or employees, but it will make your life easier.
5) Register your business with the Florida Department of Revenue (DOR)
Now it’s time to set up your business to pay taxes (...yay!). The Florida Department of Revenue (DOR) is responsible for taxes and providing services to individuals and businesses. You’ll need to register with the FDOR for sales and use tax (Florida state business taxes) and corporate income tax.
Sales and use tax
Sales and use tax needs to be paid for sales, admission, storage, or rent, with a few exceptions. If you used a taxable good or service for your business, but sales tax wasn’t paid at the time of purchase, then you owe use tax. The DOR collects your sales and use tax at the end of each reporting period.
Corporate income tax
Corporations (or any business structures that opt to be treated as corporations) will need to file Florida’s corporate income tax. Make sure to look into any tax incentives you might qualify for.
If you own a sole proprietorship, you’ll also need to register with the DOR if you’ll be paying sales tax or have any employees.
6) Apply for a license or permit for your business in Florida
You may need to get a license, permit, or registration for your business, depending on the type of work you’re doing. There are three agencies that issue business licenses in Florida.
- Florida’s Department of Business & Professional Regulation is responsible for industries like barbers, construction, real estate, hotels, landscaping, and restaurants.
- The Florida Department of Agriculture and Consumer Services issues licenses for the agricultural, oil and gas, and food handling industries.
- Florida Department of Health covers health practitioners, like body piercers, social workers, nurses, nutritionists, and more.
7) Get funding for your business
Now it’s time to think about how you’ll get the funding to bring your dream to life.
Here are some funding options for your small business:
- Your own savings
- Small Business Administration (SBA) loans
- Small business grants in Florida
- Credit cards
- Short-term loans
- Help from family and friends
Once you do find funding, remember to use your money wisely and stick to your budget! Florida Small Business Development Corporation offers free financial consulting so you can see what funding options work for you.
8) Insure your business
The amount (and type) of insurance you get will depend on your business type. For example, if you have more than four employees, you are legally obligated to get Workers’ Compensation Insurance. If you’re an accountant, lawyer, or doctor operating a small business, then Professional Liability Insurance, which protects you from claims by clients (such as negligence or malpractice), is a good idea.
We suggest General Liability Insurance for all business types; it covers your small business, regardless of type, from things like property damage and injury.
9) Set up banking and accounting for your business
There are so many perks to setting up a business bank account. Not only does it make keeping your personal transactions separate from your business transactions painless, it makes accounting and tax filing much easier too. Business bank accounts are only legally required if your business is incorporated, but we highly recommend it for everyone since it helps immensely to have your personal and professional finances separate come tax time!
Wave provides easy-to-use and accessible accounting software for small businesses that helps you track your expenses and cash flow and always stay tax ready. We recommend taking care of your accounting in one place, like Wave, to stay organized, especially when you’re starting out. Don’t get into the habit of keeping receipts in shoeboxes and stressing out over spreadsheets (yikes)!
Moving ahead with starting a business
So, now that you have your business idea down, and you know what to expect when it comes to the legal and financial considerations of starting a business in Florida… What’s next?
If hiring employees is something that’s right for you, you’ll want to start building your team. Make sure you register for employee taxes with the IRS and report all new hires to the State of Florida. A payroll software is also the best option to pay your team and make bookkeeping easier (psst, Wave Payroll is super easy for beginners and teaches you as you go, and works with the rest of our accounting products).
You’ll also need to sell your business (...but not literally!) to let people know how awesome you are through your marketing strategy. Refer to any notes you took when deciding on your brand name. Before you start building out your marketing plan, you’ll want to determine how you want to brand yourself: What are your values as a business, and why should customers trust you? What is your visual identity (like your business logo and colors)? A website and social media are musts when advertising your business, but you might also want to consider press releases or other creative methods.
Now that you’re armed with all the information you need about starting a business in Florida, what are you waiting for? Save this article for later, and get planning! We’ll be cheering you on from the sidelines. 🥳
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.