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How to Start a Small Business in Maryland With No Money in 12 Steps

Do you want to invest or start a small business in Maryland? If YES, here is a detailed guide on how to start a profitable business in Maryland with no money. The Bureau of Economic Analysis estimates that Maryland’s gross state product in 2016 was $382.4 billion. According to the U.S. Census Bureau, Maryland households are currently the wealthiest in the country, with a 2013 median household income of $72,483 which puts it ahead of New Jersey and Connecticut, which are second and third respectively.

This is indeed one of the reasons why an investor should consider investing in Maryland. Please note that a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry.

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A local car wash that employs 10 people is an example of a small business. So also, a manufacturing company that employees less than 500 people is an example of a small business. To Start a Business in Maryland, follow these steps:

12 Steps to Starting a Small Business in Maryland With No Money

Step 1: Choose a Workable Business idea or Niche

No serious entrepreneur registers a business without first settling for a workable business idea. The fact that businesses are known to thrive if the right things are done, does not mean every business will thrive in Maryland. In essence, the first step that you are expected to take if you serious about starting a business is to come up with a workable business idea.

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For example, if you are not too sure whether a Marijuana dispensary business is legal in Maryland, why choose such business idea? So, the rule of thumb is that you must ensure that your business idea falls in line with what is acceptable in Maryland and one that you can easily secure the necessary permits and licenses.

When it comes to starting a business, the most ideal thing you need to do is to ensure that you select a business that you are passionate about. The truth is that if you choose a trendy business that you are not passionate about, you can easily lose the zeal and the steam to push the business on especially during challenges.

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Step 2: Conduct Your feasibility studies and Market Survey

Irrespective of the town or city in Maryland that you decide to start a business, the one important step that you are expected to take is to conduct thorough feasibility studies and market survey.

With the result from your feasibility studies and market survey, you will be able to make informed decision, especially as it relates to the type of business to settle for, the location for your office, factory or store, the demographic composition of those who would need your services or product, the likely competitions that you will be confronted with, how to source for raw materials or goods and loads of other factors that can either make or mar your business.

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Step 3: Choose a Catchy Name for Your Business

After coming up with a workable business idea and of course having conducted your market survey and feasibility studies, the next step to take is to choose a catchy name for your business. The truth is that when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.

Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business. Please note that for LLCs and corporations, you need to check that your name is distinguishable from the names of other business entities already on file with the Maryland Department of Assessments and Taxation (DAT).

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Names can be checked for availability by searching the Maryland DAT business entity database. There also are certain name requirements for LLCs and corporations (like including a word such as “LLC” for LLCs or “Company” for corporations).

Sole proprietorships and partnerships in Maryland must file an Application for Trade Name with the Maryland DAT if they use a business name that is different from the surnames of the business owner (for a sole proprietorship) or individual partners (for a partnership). Trade names expire after five years and should be renewed within six months of expiration.

If you plan on doing business online, you may want to register your business name as a domain name. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use.

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Step 4: Write a Workable Business Plan

No matter the type of business or size of business you intend starting in Maryland, it is a wise decision to first write a good business plan, complete with pro-forma financial statements. The truth is that in order to successfully run a business, you need to have a workable business plan in place.

A Business plan is the blue print that is needed to successfully run a business; with a workable business plan in place, you will reduce the trial and error approach of doing business. You will be able to manage your business with purpose and perhaps precision; you will know what to do per time and how to handle challenges, growth and expansion.

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So if you want to start your own business in Maryland, you are required to write a detailed business plan that can pass reality test when subjected to it; you should work with the facts, figures and other indices. The whole idea of writing a business plan is not just for the sake of having a business document in place. Your business plan should outline strategies on how you intend to manage your business.

The rule of thumb in writing a business plan is to try as much as possible to be realistic and never to over project when putting figures on income and profits et al. As a matter of fact, it is safer to underestimate when writing a business plan so that you won’t be so disappointed when reality sets in.

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These are the key areas that should be covered in your business plan;

Executive summary and Company’s description

You are expected to write about the concept of your business, description of your company, your company’s vision statement, mission statement, where your company will be located and also if you intend selling out franchise or opening outlets in different cities.

Other key components that should not be missing in your brewery business plan are product offering, SWOT analysis, competitive analysis, marketing and sales analysis / strategies, target market, market goals, pricing, costing and financial projection, publicity and advertising strategy, expansion and growth strategies, budget and startup capital generation et al.

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Step 5: Choose a Legal Entity for Your Business

If you choose to start your business in Maryland, choose a business entity. Decide whether you wish to operate as a sole proprietorship, partnership, Limited Liability Company or corporation.

Please note that there also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. If your business will operate under a business name that is different from your given name, you must register that name. This is called filing a D/B/A (Doing Business As) and the fee varies slightly, according to your location.

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Step 6: Register Your Business Name

Once you are able to carry out all the steps listed above, then you have to go straight ahead to register your business name. Of course, you would have done the necessary business name search that will ensure that you are not settling for a name that is already in their data base.

If you don’t want someone to register your business name, then you should be fast about registering the business name. Registering your Maryland company as a legal business entity, such as an LLC or a Corporation, has two major advantages and they are Increased credibility and Protection from personal liability in the event your business is sued.

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For most small businesses, registering an LLC is a great option. In comparison to other business entities, LLCs are easier to set up and manage and they have favorable tax treatment. You can set up an LLC in Maryland for as little as $70.

Please note that in Maryland, if you choose not to register your company as a business entity, you will be held personally responsible for the debts and liabilities of your business. In addition, unregistered business owners may need to file a Trade Name, also known as a “DBA.” Find out if your business is required to file a DBA.

Step 7: Source for New Business Financing

When it comes to sourcing for loan for a small business in the united states, Small Business Administration (SBA) is your Go-to Place. Getting first-hand information on how SBA loans work in the United States of America might be all an aspiring entrepreneur needs to finance his or her business.

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In the United States, Small Business Administration (SBA) is a major source of financing for entrepreneurs especially those that operate small businesses. Small Business Administration has several loan programs that have made available the needed funding for thousands of small enterprises who were unable to secure loans from lending institutions on their own.

It is on record that a number of Fortune 500 companies in the United States benefited from SBA loans when they were just starting out. Big corporations such as FedEx (Federal Express), Apple and Intel among others leveraged on loans gotten from SBA. The only reason why you should ignore this step is if you already have the required startup capital needed to kick start your business.

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Step 8: Apply and Obtain the Needed Business License and Permits

The nature of the business you want to run will determine whether you need to obtain any state licenses or permits to operate your business.

Tax Registration

If you will be selling goods in Maryland, you must register for a sales and use tax license with the Comptroller of Maryland. If you will have employees in Maryland, you must register with the Comptroller of Maryland for employer withholding. For both kinds of registration, you can use the online combined registration.


If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so.

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Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.

Regulatory licenses and permits

These cover areas such as: health and safety, the environment, building and construction; and specific industries or services.

For regulatory licenses and permits issued by the state, register through Maryland Business Express. For information about local licenses and permits, check the websites for any cities or counties where you will do business.

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Professional and occupational licenses

These cover people who work in various fields. You can find a list of state-issued professional and occupational licenses at the Division of Occupational and Professional Licensing.

STEP 9: Taxes and Reporting

Maryland taxes every kind of business. See Maryland State Business Income Tax for more information on state business taxes in Maryland.

Pay state taxes on business income as part of their personal state income tax returns (Form 502).

  • Partnerships

Partners pay state taxes on partnership income on personal tax returns. In addition, like every other Maryland pass-through entity, your partnership must also file Form 510, the pass-through entity tax return.

  • LLCs

Members pay state taxes on their share of LLC income on personal tax returns. In addition, the LLC itself must file Form 510, the Maryland pass-through entity tax return, and an annual report (also known in Maryland as a personal property return). See Maryland LLC Annual Report and Tax Requirements for more information.

  • Corporations

Shareholders must pay states taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. The corporation itself is subject to Maryland corporation taxes. And, finally, corporations must file an annual report (also known in Maryland as a personal property return).

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If you have employees, you must also deal with employer taxes. And, apart from Maryland taxes, there are always federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business, available at

STEP 10: Open a Maryland Bank Account

Once the IRS has issued an EIN Number to your business, you can open a business checking account. It’s best practice to have a business checking account for your small business in order to maintain your personal liability protection. Using a personal bank account for your LLC is called “commingling of assets” and this can lead to personal liability issues if you end up in court.

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Please note that having a separate business bank account for your business also makes record-keeping easier for accounting and tax purposes. Since banks in Maryland have their own rules and regulations, it is recommended calling a few places to determine the following:

  • minimum initial deposit
  • minimum balance requirements
  • monthly maintenance fees (if any)

Step 11: Purchase the Needed Business Insurance

The rule of business engagement in Maryland and in all the states in the United States is that, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.

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You might want to consider buying some or all of these insurance policy covers for your business; General insurance, Health / Medical insurance, Liability insurance, Workers Compensation, Overhead expense disability insurance, Business owner’s policy group insurance and Payment protection insurance.

Please note that if you are going to operate your business from home, then you might want to learn about home-based business insurance.

Step 12: Lease or Rent an Ideal Office Location

Another important step to follow when establishing a small business in Maryland is to choose an ideal location for your office. When it comes to renting an office facility in Maryland, the nature of business you want to do should serve as a guide.

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You can check with the local code enforcement officer to determine if your business will be in compliance with local zoning ordinances. Besides, you would need your business license and permit as part of the document to be tendered before any landlord or realtor will sign any leasing agreement with you.

N.B: Please, note that the information in this article is provided only for general purpose and it is no way a legal advice. No lawyer-client relationship is established or should any such relationship be assumed. For legal advice, please consult a professional lawyer. But, if you need additional assistance or have business-specific questions, we will advise that you contact the appropriate authority in your local council.