With a booming population and many popular tourist destinations, Florida can be a great location for starting a small business. After all, it’s the fourth largest economy in the country and it leads the nation in number of new businesses started, according to the Florida Chamber of Commerce.
Florida is also an incredibly business-friendly state, with the nation’s 3rd highest workforce and tax policies that favor business growth. But as with any business, you need to obtain the necessary business licenses and permits from state agencies, navigate regulations and tax requirements, and follow laws around worker compensation and business structure.
Learning how to start a business in Florida comes with its fair share of unique considerations, so here’s our guide on how to start a business in the sunshine state!
6 steps for starting a business in Florida:
Every business starts with a dream, but how do you transform your bright idea into a working, thriving business? To set your small business in Florida up for success, consider these important steps:
Step 1: Clarify your business idea.
Before you get the ball rolling, it’s important to have direction. Know what your business will be and who your business will serve so that you’ll have answers prepared at every turn when starting a small business. The ideal business concept should align with your passions, address a market need, and have the potential to be profitable.
For instance, if you have a passion for books but lack writing skills, a writing business may not be for you. Instead, you might consider opening a bookstore in a location where there is a demand. If you’re uncertain about the type of small business to start, think about your interests, skills, and passions. Reflect on what you enjoy doing, what you’re good at, and what you’re passionate about.
The responses to these questions can guide your business focus and help refine an existing business idea.
Step 2: Conduct market research.
Market research is a critical step for starting any business. You need insights into the viability and potential profitability of your business idea, and research can help you succeed when you launch and beyond.
Market research comprises two types of data: primary and secondary. Primary data is gathered directly from consumers through methods such as focus groups, surveys, and interviews. Secondary data, on the other hand, is collected from external sources like government census data, research reports, and studies conducted by other businesses in your industry.
Market research may seem time-consuming and potentially expensive, but your effort will pay off. Research can validate your business idea in terms of market demand and profitability. It can also help you understand your potential customers better, making it easier to market and sell to them.
Lastly, it should guide your marketing strategies by understanding your customers’ preferences and whether they are more inclined to be influenced by social media, traditional media, billboards, email, or other marketing channels.
When you’re considering starting a business in Florida, you want to make sure your market research applies to your audience. If you have an eye on a specific city, narrow your focus on that location. If you’re looking at the state, compare and contrast research results across the state.
With a strong research base, your future decisions will be that much easier to make.
Step 3: Write a business plan.
After validating your business idea through market research, the next step is to consolidate your findings into a business plan.
A business plan is a comprehensive document that outlines your business strategy, future objectives, and the roadmap to achieve these goals. Contrary to popular belief, a business plan is not just for those looking for funding; it can benefit all businesses by helping to refine the business idea, identify potential challenges, and offer a clear understanding of how you will acquire customers and become profitable.
A robust business plan includes several key sections:
- An executive summary that encapsulates the entire plan.
- A company description that answers key questions about your business.
- A market analysis section that leverages your market research.
- A section on mission, goals, and objectives.
- A description of your products or services.
- A marketing plan detailing your unique value proposition and promotional strategies.
- A financial plan that includes a proposed budget, projected financial statements for five years, and outlines any funding requests.
When you create a business plan to start a business in Florida, be sure to note how your market research has reflected your chosen location and audience.
Step 4: Finance your business.
With a plan in hand, it’s time to think about execution. And making your small business a reality means finding a way to finance it.
The initial investment can range from a few thousand to a few hundred thousand dollars, with the average cost for a small business to start and operate for the first year being around $40,000.
But don’t let the projected start-up costs deter you! There are many funding options available to small businesses. Self-funding or bootstrapping, which involves using personal funds, is one route. However, this method can carry significant financial risk if your needs are high.
Consider applying for small business loans or lines of credit, but remember you’ll often need your business plan and personal financial statements when applying. Although competitive, small business grants provide funding that doesn’t need to be repaid, so you can get farther with less.
And be sure to look into Small Business Administration (SBA) loan programs, which offer lower interest rates and longer terms compared to conventional loans.
Step 5: Conduct a Florida business entity search.
Your business name is often the first impression you share with the world. But before you pick the one that draws the most crowds, you’ll need to conduct a business entity search. That’s how you’ll learn if a business with the same name already exists. Make sure you choose a business name that complies with state regulations to ensure legal protection and public transparency.
Next, consider using a trade name, which is like a short pseudonym for your business. For example, you might incorporate your business under the name XYZ Designs, Inc., but your trade name is just XYZ Designs. To put your best foot forward, you want your business to be named something short and memorable—and a trade name lets you do that.
Step 6: Register your business.
You’ve got a name—now your business is taking shape. Choose a business structure that accurately captures your preferred tax obligations, daily operations, personal risk, and legal obligations. Here’s a list of common business structures to jumpstart your search:
- Sole Proprietorship: A sole proprietorship merges the identity of the owner and the business. This makes the owner personally liable for business debts, so be cautious.
- Partnerships: Suitable for businesses with multiple owners, these require a partnership agreement and offer limited liability for the debts of the LLP.
- LLCs: Owned by one or more entities, these limit personal liability for business debts and are relatively easy to establish.
- Cooperatives: Cooperatives operate to benefit their users and span various industries such as healthcare, retail, restaurants, and agriculture.
- Corporations: Common in larger companies due to their legal and tax complexities, but these can also be utilized by small businesses.
- S Corporations: These function like a corporation, but the flow-through of income and losses is sent through to shareholders to help you avoid double taxation on corporate income.
Learning how to start a LLC business in Florida can be useful, since many small business owners in Florida favor S corporations and LLCs. That’s because they are exempt from state income taxes!
Do your research into each type of business so that you register the best fit for your small business. Consider in particular the taxes you may pay and the legal risks you wish to avoid.
Regardless of structure, businesses in Florida are required to collect sales tax if applicable, with the sales tax rate and oversight of sales and use taxes managed by the Florida Department of Revenue.
Just remember to talk with a lawyer or accountant to ensure the chosen business structure is the best fit for your business.
How to incorporate in Florida.
Business registration and licensing requirements can vary across states, and Florida involves several unique steps. You might need to apply for a trade name and file Articles of Incorporation with the state, depending on your business structure.
Here are the main steps for incorporating a business in Florida:
- Check business license requirements. Knowing how to get a business license in Florida comes down to verifying all registration and licensing requirements with the Florida Division of Corporations. Connect with relevant local government bodies and industry associations for more specific information and guidance. Businesses, including corporations, must also file and pay Florida’s corporate income tax.
- Register your business with the Florida Division of Corporations by completing the required paperwork and settling any fees associated with your business category.
- Get an Employer Identification Number (EIN) from the IRS. This number is essential for federal tax purposes and is typically required to open a business bank account. You’ll also need to register your business with the Florida Department of Revenue to obtain any necessary tax IDs.
- Obtain relevant licenses and permits. Depending on your business sector, you may need to get specific licenses and permits from both state and local governments. For instance, businesses involved in the sale of food, alcohol, or tobacco must acquire particular licenses from the Florida Department of Business and Professional Regulation. Businesses, including sole proprietorships, must also register for sales tax in Florida.
- Secure the appropriate insurance. Florida law mandates the purchase of workers’ compensation insurance if you intend to hire employees. You should also consider other types of insurance, such as general liability insurance. If you’re uncertain about your insurance needs, we advise you to consult with a legal expert.
How Homebase can help you start a small business in Florida.
Every business needs the right tools at its disposal to be successful. When starting a new business, it’s a smart investment to find software that can accommodate your business growth both today and in the future.
That’s why Homebase offers a comprehensive set of tools designed to support your business at every stage. As your team expands, enjoy the convenience of effortless scheduling and time tracking. When it’s time to pay your team, Homebase handles payroll seamlessly. And you can always stay connected with your remote workforce through efficient team communication.
Homebase provides everything a new small business needs, eliminating the need to switch platforms as your business scales up.
Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.
