Starting your own business is an exciting venture with its fair share of challenges and benefits. At the start of your journey, you have the unique opportunity to set up your business the right way. You can create a strong foundation on which your business can grow and flourish. If you fail to do so, you might face complications later that can distract from your original mission.
The good news is that setting up your business in Ohio doesn’t have to be difficult. In fact, you can get your business started in just 9 easy steps. Read on for the exact actions you need to take to begin this new chapter of your life.
9 Steps to Start a Business in Ohio
1. Create a Business Plan
A business plan is a place for you to lay out all of your ideas and processes for your business. You can adjust it as time goes on, but it should act as a guide to make all of your decisions easier. Plus, you’ll use your business plan to get funding if you need to apply for a loan.
Your business plan should include:
- Business name
- Executive summary
- Company overview
- Description of services and pricing
- Target market
- Competitive analysis
- Startup costs
- Earning projections
- Marketing strategy
- Employee requirements (if any)
2. Decide on a Business Structure
Your business structure will determine how you register your company and file taxes. It can impact your day-to-day operations as well as what level of risk you take on personally, so it’s important to choose the right structure from the start. However, you can update it later down the line if you change your mind.
A sole proprietorship is the easiest to form. You don’t have to register a sole proprietorship in Ohio as long as you don’t have any employees. It’s riskier than the other types of businesses, though, as it does not separate your business assets and liabilities from your personal ones.
A partnership is a simple structure for two or more people to start a business together. You’ll choose from an LP (limited partnership) or LLP (limited liability partnership). Partnerships are a good choice if you want to test your business idea before turning it into a more formally structured business.
The final options are an LLC (limited liability company) and a corporation. With an LLC, you protect your personal assets from liability in the case of a lawsuit. With a corporation, you get the most protection from personal liability, but it’s also more expensive and complicated to form.
3. Register Your Business
Ohio requires that you file a series of paperwork to start your business. First, you’ll need to register with the Ohio Secretary of State, either online or over the phone. You can also schedule an appointment for more hands-on help.
Next, register your business with the Ohio Department of Taxation. You can choose to register online or by paper application. During the process, you’ll collect information on filing requirements and due dates. You might also opt for the Ohio Small Business Tax Training Program, which will help prepare you to meet Ohio’s tax requirements.
In addition, you might want to obtain a federal EIN (Employer Identification Number). Not every business needs an EIN. Generally speaking, you need an EIN if you’re registered as a corporation or partnership, or if you have employees. You can apply for an EIN online with the IRS (Internal Revenue Service).
If you’re a sole proprietor with no employees, you can use your social security number to register with Ohio rather than an EIN. However, some banks require an EIN if you want to open a business bank account, so it could be a good idea to get one now.
4. Get Funding
The costs to register your business are relatively low, especially if you chose to start as a sole proprietorship. However, you’ll likely need funding to cover the cost of inventory, website domains, payment terminals, and more.
First, put together an estimate of your business costs. You might have already done this for your business plan. If not, determine what funds you’ll need for products, supplies, website building, brick-and-mortar building rent (if applicable), employees, and any other costs. This will allow you to choose the best funding option for your needs.
You have a few options to choose from. You might take on all the costs yourself and pay for your business with your income from your current job or personal savings. You could also approach your friends and family to ask for support in financing your business. Make it official by writing out a professional repayment plan.
You may also apply for small business grants, which are usually issued by the government or other organizations. You don’t have to pay them back, but you’ll need to meet a set of standards to qualify. The last option is to apply for a small business loan with a lending institution, which you will need to pay back along with interest.
5. Get Licenses and Permits
There are local, state, and federal regulations on business that you’ll need to comply with. That means you’ll need to get licenses and permits to operate legally, depending on what type of business you own. For example, if you own a bakery, you will need to get health permits to legally sell food that is safe for consumption.
You can check out the U.S. Small Business Administration guide for federal requirements. In Ohio, you can use the state’s website for licenses and permits, which lays out each type of business and its specific requirements. Lastly, reach out to your county clerk to check for locally required licenses and permits. In most cases, you can apply online.
6. Open a Business Bank Account and Credit Card
It’s a good idea to have a separate bank account and credit card for your business, as it allows you to keep the business separate from your personal assets. This can protect you from losing your car, home, or other valuable items if your business is ever sued. Plus, it makes bookkeeping and filing your taxes much easier.
The process is very similar to opening personal financial accounts. Most banks allow you to open a business bank account online, though you can also meet with an advisor in person for more personalized guidance.
Likewise, you can open a business credit card with your chosen creditor online. You’ll need your business name, business structure, EIN or Social Security number, and business revenue estimates.
With both a bank account and a credit card, be sure to shop around for the best deal. A good business bank account will have a high annual percentage yield (APY) and no fees. Many credit card companies offer bonuses for signing up, as well as points and rewards for making purchases. Do your research so you can choose the best option for your business.
7. Get Insurance
Getting Ohio business insurance can help you avoid risks in the event that someone sues your business. If you’re a sole proprietor with no employees, you aren't required to have insurance, but it could still be useful. There are a few types of business insurance you can get: general liability, workers’ compensation, and professional liability.
A general liability policy typically covers the cost of your legal defense and any losses in the event of a lawsuit. That includes property damage, personal liabilities, bodily injury, medical payments, and advertising liabilities.
If you have one or more employees, you will need to get workers’ compensation insurance, per Ohio law. Most businesses could benefit from a general liability policy. The cost of your policy and how much it covers will depend on your business, but you can choose minimal coverage to lower your monthly bill.
8. Create a Website
Whether you’re selling online or in person, having a website is a critical part of any business today. It builds credibility and authority with your customers. Plus, it gives you a chance to show off what you do. If you want to sell online, it’s also a place where you’ll share product descriptions and make sales.
Luckily, there are plenty of website builders that make it easy to create a professional-looking website in just a couple of hours. Squarespace, Wix, and WordPress are a few of the most popular, but do your research to find out which works best for you.
You can expect to pay a monthly fee for hosting the website, plus a yearly fee for owning your domain name. You may also choose to pay someone else to design the website or write your website copy, which will cost more but require less of your time.
9. Set Up Your Payment System
At this point, your business is entirely set up - the last (and most important) thing you need to do is give your customers a way to pay you. It’s critical that you choose a payment system that gives you a full payment infrastructure, like Pay.com. That means you get a merchant account, payment gateway, and payment processing service.
Each payment system is different and has different steps for setup. Some require that you have coding experience, while others don't. Pay.com gives you both options – choose an easy no-code setup or, if you're an advanced user, you can use your coding knowledge to integrate the API into your website. Either way, you can get set up in just a few clicks.
Even if you’re not selling online, you can use Pay.com to accept payments from customers. We give you the option to send Pay Links to your customers directly, or take credit card details over the phone and enter them manually.
Plus, you can use the Pay Dashboard to manage everything in one place. You can track the status of your payments, send payment requests, update customer details, review reports, and more – all on one user-friendly platform.
The Bottom Line: Starting a Business in Ohio
Starting your business in Ohio might seem complex, but it doesn’t have to be. In just 9 simple steps, you’ll be completely set up and ready to work toward your mission. However, it’s important that you don’t rush the set-up process. Doing the above tasks properly now ensures that you can grow your business without issue in the future.
One of the most important steps you’ll take is setting up your payment system. After all, that’s how you’ll earn profits and serve your customers! That’s why Pay.com makes the process so convenient. Whether it’s your first time selling online or in-person, Pay.com makes accepting payments quick and easy. Click here to find out how you can get started.