It can be hard to start your own business in Maryland. You will need enough money, time, personal support, and professional help to make your dreams of being an entrepreneur come true. Starting a business in Maryland is an excellent choice for entrepreneurs because the state is ranked 7th in the country for how well new companies do in their first year. This step-by-step guide is here to help you get your Maryland startup up and running.
Step One: Have a Business Idea
Choosing what kind of business to start is the first step toward business ownership. Find an idea that aligns with your hobbies, objectives, and talents. This can significantly increase your chances of success and help you stay motivated when things become challenging.
Step Two: Write a Business Plan
You must write a business plan before applying for Maryland startup funding. This will not only help you flesh out your idea to see how it will work but also help you figure out if your business has enough potential and financial sense to move forward.
When it comes to a business plan, there is no one-size-fits-all answer. The important thing is that you make a plan with these things in it:
- A complete description of the business, including what it does and who its main customers will be.
- You should learn enough about the target market to know if your business idea has enough potential to move forward. If no one else offers something like yours, you should figure out why. If too many people are offering the same thing, you should figure out if there’s room for you.
- It’s essential to go through the steps to see if your business plan will help you make money.
Step Three: Name Your Business
If someone else has an active business registration with the name you want to use, your business name must be unique in Maryland. To check if the name you desire has been registered, the Maryland Innovation Center suggests using the Maryland Secretary of State website. If not, you can register your business under that name.
Step Four: Find the Perfect Location
Do you know where you will put your business? Whether you’re opening a storefront or starting a business from home, the site of your business affects what licenses and permits you’ll need and how big your business can grow. Studying the most popular places in Maryland can help you get more customers and foot traffic.
Step Five: Pick Your Business Entity
When you start your business, you can choose from different business entities. Each has its own pros and cons that might make it the right choice for you.
- Limited Liability Company: An LLC is a popular choice for small companies because it protects you legally from the business’s liability and gives you many tax benefits. Learn more about how an LLC works.
- Corporation: Many big businesses choose to be a corporation because it is easy to get money for the business, and they can sell shares of the company. This won’t be a good choice for many small businesses. You can choose either an S-corp or a C-corp when making a company.
- Partnership or Sole Proprietorship: This is a type of business where the owner or owners choose not to keep the business funds separate from their personal finances. In Maryland, to start running a business as a sole owner, you don’t even have to file any paperwork with the state. Find out more about why you might be better off with a sole proprietorship.
Step Six: Register Your Business
You must register your business with the State of Maryland before you can officially do business there. This step is also important for you because it can keep your personal assets safe from the business’s actions or debts. You can start the process with the help of the Maryland Business Express and the Maryland Center for Entrepreneurship.
Step Seven: Apply for Your EIN
If hiring people is part of your business plan, you must get a job identification number from the IRS. This number is the government tax number for your business. It works a lot like your own Social Security number. You can also use the Maryland Business Express page to apply for a state tax ID number.
Step Eight: Obtain the Proper Licenses and Permits
Depending on the type of business you run, you may need a license or permit to do business in Maryland. The state government runs a OneStop Portal website that helps people get licenses and permits. It is called the center hub for all Maryland licenses, forms, certificates, permits, applications, and registrations. If you’re not sure if your business needs a special license to work in Maryland, you’ll quickly learn to value the OneStop Portal, which has a list of every kind of license the state gives out. If your business sells goods to customers, you must receive sales tax from them and send it to the state.
Step Nine: Get Business Insurance
Most businesses do a lot of business with customers and suppliers, and there is always a chance of confusion, misunderstandings, or mistakes. In rare cases, this could cause someone to sue you for it. Your business can be protected by general liability insurance. Many other kinds of business insurance cover things like your work vehicles, your real estate, or natural disasters. Your financing business may also ask for certain types of insurance.
With the help of a Howard County Innovation Center, you can reap the rewards of starting your own business in Maryland. Most of the businesses in the state are small and owned by one person or a small group of people. Many of them register their business as a limited liability company because it gives them risk protection and tax benefits in a way that no other business structure does. You can start your business in a few minutes, and then you can get the official paperwork within a few days.