Do you want to invest or start a business in California? If YES, here is a detailed guide on how to start a profitable business in California with no money. California is the most populous state in the United States. It holds a lot of potential; with respect to human, mineral and natural resources. California is also home to Silicon Valley; the hub of the greatest technology companies in the world.

This is not to discourage you but the truth is that California is considered as one of the states where it is difficult to start a business unlike Texas, Utah and Idaho. Now it is important to note that the Governor’s Office of Business and Economic Development has some business specialist who can be assigned to you to help you start a business in California. To access these specialists, all you need to do is to visit www.business.ca.gov and click on the ‘contact a business specialist’ button.

A lot of publications and analysts have tainted California as a challenging place to do business but it would interest you to know that California has a large number of small businesses that have continued to survive, grow and make profits. So, do not allow all what you have heard scare you. With the right information, adequate planning and research, you would have no problem running a successful business in California.

How to Start a Profitable Business in California With No Money – A Complete Guide

1. Get in the Right Mindset

The first step to starting a small business in California is to adequately prepare yourself; you need to get in the right frame of mind. You may assume this is not significant but it can be the thin line between success and failure. Running a business on California is tough but highly rewarding.

Now how do you get yourself in the right mindset? You can get yourself ready by attending a seminar on the chosen line of business you want to undertake. You can also prepare your mind by accepting the reality that you can fail tomorrow; you prepare yourself by increasing your capacity to handle risk. And ultimately, you prepare yourself by making up your mind to excel despite the odds and competition.

2. Have an idea of the Business You Want to Start

To effectively start a small business in California, you must have a good idea. In fact, any idea or business opportunity will do; except you are pioneering a new invention. I stress that any business opportunity will work out because majority of entrepreneurs concentrate exclusively on the business idea without being aware that a business idea is just a tip of the iceberg in the entrepreneurial process of building a business.

“A business idea is just another idea. But an idea backed by a strong feasibility, a thorough business plan and a smart business team is no longer an idea. It’s now a solid business opportunity worth pursuing.” – Ajaero Tony Martins

An excellent business idea itself does not ensure success in business; an average business idea with strong business fundamentals does. The world is overflowing with amazing “million dollar ideas” but the world is short off experienced entrepreneurs.

You don’t have to crack your head attempting to create something new; don’t make an effort re-inventing the wheel, just discover a proven business line and study the basics. You can even decide to purchase a franchise if the money is available. California has the population to mop up any product that is backed by a strong business sense.

3. Do Extensive Research

The third step to opening a small business in California is to do a thorough feasibility study before putting your money into any business venture. This is where the crash of most entrepreneurs begins. I have seen people put money in a business idea or opportunity just because a relative told them that the industry is profitable. I have seen people plunge into an industry without precaution, in reaction to unverified information.

Now i know entrepreneurship is all about risk taking but going into an industry without a proper knowledge of its fundamentals is suicidal. So before commencing a business, you have to carry out an extensive feasibility research on the business terrain in California to find out lucrative businesses that you can do and the best way to go about them so as to achieve success.

Anybody can start a business but only people who have taken time to research and obtain necessary information can succeed. For instance, businesses that focus on social activities, entertainment, tourism, food and beverage, childcare services, clothing, cleaning, consulting, pet care, photography and technology are very lucrative in California.

Thriving Business Sectors in California

Some of the most thriving and also the most dominant sectors of California’s economy are agriculture, science and technology, trade, media and tourism. As the most populous US state as well as a coastal state, the economy of California is quite varied, with each sector performing in equal footing. Studies show that a large percentage of the economic activity is concentrated in the coastal cities, while the inner areas are mostly focused on agriculture.

The strongest economic areas are around Los Angeles, which focuses on media, tourism and trade, and San Francisco, where technology, trade and tourism are the main industries. Besides, as a coastal state, California is also a major gateway for trade to and from the united states.

California is notable for supporting and promoting strong business communities. Little wonder it is known as the home to the film industry in Southern California, the tech industry in Silicon Valley, and wine country in Napa Valley. With the combination of strong entrepreneurship spirit, strong tourism, great universities, and ideal weather all year round makes businesses, especially small businesses, thrive.

4. Research your Market

Researching businesses and California rules and regulations would allow you to avoid problems.  Research would also allow you to know competitors. It will give you a chance to plan your business more efficiently. Before going into any business or industry; ensure you have detailed knowledge about its primary metrics. All businesses and industry have its own covert information and if you must excel, you must seek it. Know the market of the business you are going into.

  • Who are the customers?
  • How do they want to be served?
  • Who are your major competitors?
  • Who is the market leader?
  • Do you have a chance for survival?
  • Can you grab some market share in that proposed business industry of yours?

These are the questions you must provide answer to before starting a small business in any industry.

5. Prepare a Simple Business Plan

This is another point where most people neglect. It is projected that over 85 percent of small business owners run without business plans. While I won’t condemn them, since I began my initial business without a business plan; it is considered sensible if you detach your business from the multitude.

Do not ever go into any business without writing a business plan. Psychologists are of the opinion that people are more likely to do things when they write them down and I quite agree because running a business is hectic and it is easy to get carried away and forget all the initial glowing plans you had for your business. But if you have them written down, you would be able to refer to it from time to time and use it as a blueprint for running your business.

Since most business owners are working without business plans; why not leverage on it and turn it to a competitive edge for your business. Banks don’t loan money to businesses that are managed without business plans but what if you have one? Well, I leave that for you to answer.

Please write down a business plan for any business venture you want to undertake. Even if it is an informal, one page business plan; write one. Your one page business plan may not catch the bank’s interest but it will assist you focus on pursuing your business mission.

6. Undergo Some Training

You can never go wrong with enrolling for business training to update your business knowledge. There are statewide programs that you attend such as California Small Business Education Foundation (CSBEF), California Employment Training Panel (ETP) and the California Association for Local Economic Development. These programs would give you the right information and increase your chances of succeeding in the California business terrain.

7. Find a Good Location for your Business

So you want to do business in California? If yes; then where will you site your business? Will you locate your business within your district or are you going to site your business in an industrial or commercial area? Will you detach yourself from the multitude by developing your own brand in a peculiar location? Or you are going to run business from the centre of trade and commerce places in California?

When conducting your research, you must have discovered that some areas are more suitable for some kinds of businesses than others. Therefore, you have to carefully consider the area where you want to start your business to determine what kind of businesses would be suitable there; as well as the infrastructure that would be available to you and tax regulations.

Another thing to consider is the zoning laws in the area. Make sure you understand the zoning regulations of your locality before you go ahead to set up your business.

8. Choose a Business Name

The next step is to select three possible names that you would like for your business and check for availability. If your preferred name has not been taken, you can register it after payment of some money. You can do this at the office of the Secretary of State.

9. Choose Business Structure and Register your Business

Majority of businesses run as sole proprietorships in California; you can decide to apply the same route. But if you sincerely want to build a profitable business that will prevail; I will advice you incorporate a business name or put it in your cost projections as a short term plan. You can go to the California Secretary of State to register your business entity.

A good way to commence your business name registration is to conduct a name search. The business structures that are available in California are Sole Proprietorship, General Partnership, Limited Liability Companies, Corporation, Limited Partnership and Limited Liability Partnership. The type of business structure you want to go for is totally up to you. I will advice you go through a lawyer to avoid making silly mistakes.

10. Apply and Obtain Necessary Licenses and Permits

Another important step to take is to find out what licenses and permits you would need for the type of business that you want to operate. For instance, you have to register with the state and federal government to get an employer’s identification number before you can start a business in California. Along with the identification number, you will also be informed regarding sales tax, payroll, etc.

Well, I don’t need to emphasize much on this. If you don’t want the government and its law enforcement agents on your heels; ensure you get the essential licenses and permit needed to run your business. Each industry has regulatory bodies governing it; so ensure you verify their operational policy to avoid going against the law.

Moreover, there are varying rules among cities and counties about building permits. It is best to consult the regulating bodies for details. Also, don’t forget that you need to get licenses and permits from both the local, state and federal government.

Be sure you consider their costs in your budget. You can verify with the SBA (Small Business Administration), CalGold (California Government Online to Desktops), Department of Consumer Affairs and CalBIS (California Business Investment Services) for more information on licenses and permits.

11. Seek for Funding

A little extra funding for your business would not hurt. The government of California in its bid to encourage investors and small business owners; offers a California Small Business Loan Guarantee program that you may want to take advantage of. It is for businesses with less than 100 people and operating in the state. The loan can be used for purchasing equipment or facilities. It is also suitable for expansion.

12. Set your prices

The market in California is highly competitive but when you carefully set your prices to be competitive and encouraging, you won’t have a problem struggling for customers.

13. Start the Business

After passing through all the processes above; you have to get down to the real deal, you have to start the business. Most individuals make fantastic plans, do feasibility research and even raise the required money to start a business. But for reasons best known to them; they simply refuse to start.

Maybe it’s because of the fear of failure; but what I do know is that not everybody has the brevity to create a business. Most can only fantasize about it but only few have the guts to undertake the risk. Are you prepared to assume the risk to start your own business in California? Only you can answer that.

Realistically, this is the point where your task as an entrepreneur gets tougher because statistics show that 75% of all new businesses fail in their first five years. And of the 25% that survived; 80% of them will fail in the next five years. It means that about 90% of all businesses will fail in their first ten years. This statistics may be harsh but it’s the truth in its entirety. Are you prepared to lose it all? If your answer is yes, then start.

14. Look for Leverage

The best way to grow in business is to leverage on the organized structure of reputable businesses. So if you want to grow; then seek strategic partnerships. Leverage can be in the form of obtaining a bank loan, getting credit facility from suppliers; forming strategic alliance with a big player or obtaining a contract.

Without much cash at hand, you may also consider to explore lending companies and other institutions that provide financial assistance to those who want to start a business in California. For small businesses, home equity is commonly used but note that the government provides assistance. Regardless of the leverage you decide to pursue; go for it.

15. Become Tax Compliant

Well, I wish they were but taxes are not free in California. You would have to pay taxes so, you should ensure that you register your business with the appropriate Federal and State tax regulatory bodies and obtain your unique Tax identification number which you would use for filing taxes.

Tax Collections in California

According to the U.S. Census, the federal Internal Revenue Service collected in California in 2012 $292.563 billion in taxes. This included federal income & payroll ($193.489 bn), excise ($3.227 bn), corporate income ($37.181 bn), gift ($0.288 bn), estate ($2.590 bn), unemployment ($0.838 bn), and trust ($1.091 bn) taxes.

Records shows that state and local tax and fee collections in California (2011) were $268.224 billion plus another $75.875 billion in federal transfers were spent by state and local government agencies. As a matter of fact, in 2010, when measured as a percentage of GDP, California had the 4th highest tax burden of all the fifty states at 13.4 percent of the state GDP.

16. Create your website

When you are done with the registration and setting up your business, you should consider the business promotion aspect and top on your to-do list should be creating a website for your business. It doesn’t matter if it’s just a coffee shop; you can never go wrong with positioning your business on the internet.

17. Hire professionals to work with you

You cannot possibly know it all. If you know the marketing aspect well; what about the financial aspect? Oh well, you know that too but do you also know the legal aspect and the technical aspect?

Successful business owners know and understand their limits; they know the things they cannot handle and would instead allow a professional handle it for them so that the business can enjoy the attention and knowledge of diverse professionals.

18. Insure your business

Talk to an insurance agent about how to obtain insurance for your business and the type of insurance products you would need. I understand that paying premiums is not the most enjoyable business activity but it sure helps to jealously protect your business from risks. You know, like mother hen and her chicks

19. Be socially responsible

There are a lot of ways to be socially responsible; to give back to the community, to carry out your business in such a way that other people are not negatively affected, to pay taxes as and when due and to ensure that your employees are satisfied and happy. It pays to be a socially responsible entrepreneur.

20. Survival is the Game

If you can get to this phase, then it’s congratulations because you have simply created your own small business in California. You have began the process and showed resilience; now is the time to push it through.

At this point, survival is the name of the game because doing business in California is tough due to the government tax policy and bottlenecks. You may suffer some setback from competitors; you might make a mistake or even encounter difficult business problems but don’t surrender.

Frequently Asked Questions

  1. What Are The Steps Needed To Create Your Own Business In California?
  • Choose the Right Business Idea
  • Plan Your California Business
  • Get Funding
  • Choose a Business Structure
  • Register Your California Business
  • Set up Business Banking, Credit Cards, and Accounting
  • Get Insured
  • Obtain Permits and Licenses
2. What Is Needed To Start A Towing Business In California?
  • Create a business plan
  • Obtain the necessary California permits and licenses, including a Class B commercial license
  • Become familiar with towing regulations in California
  • Join the recognized industry organizations
  • Purchase your trucks
  • Find a parking place for your truck, unless your city allows commercial vehicles to be parked on the street.
3. What Is A Good Business To Start In California?
  • Gas stations
  • E-commerce
  • Supplementary educational businesses
  • Wholesale electronic trade
  • Shoe stores
  • Beauty services
  • Real estate rentals
  • Non-instructional educational support
  • Electronics and appliance stores
  • Secondhand retail
4. How Do You Start A Small Business In California?
  • Choose a Business Name and Structure
  • Create a Business Plan
  • Register Your Business
  • File Taxes
  • Obtain Any Required Business Licenses or Permits
  • Open a Business Bank Account and Explore Your Funding Options
5. How Much Does It Cost To Start A Business In California?

The fee to file the LLC-1 Articles of Organization is $70, plus $5 for a certified copy. LLCs must also pay an annual minimum tax of $800 to the California Franchise Tax Board for every year they are in business.

In addition, filing the California articles of incorporation including a filing carries a fee of $100, plus a $15 handling fee. You must also file an initial report giving detailed information about your company, which includes a fee of $25 and a $75 service fee.

6. Does An LLC Need A Business License In California?

It is important to note that obtaining a business license is not the same as forming an LLC or other legal entity for your business.

Under the California law, LLCs cannot be formed to provide professional services. Professional services include any service that requires a professional state license. If you don’t know whether your service requires a state license, see the California Department of Consumer Affairs website.

7. How Do You Start Up An Online Business In California?
  • Write a business plan
  • Decide on Your Business Structure
  • Take Care of All the Legal Tasks
  • Choose your name and buy your domain
  • Build Your Website and Choose Your Sourcing and Fulfillment Methods
  • Register your business entity with California
  • Acquire all the necessary licenses, permits, and registrations
  • File your tax and employer documents
  • Get your finances in order
  • Develop and Implement Your Prelaunch Marketing Strategies
  • Launch Your New Business
8. How Do You Get A Sellers Permit In California?

The requirement to obtain a seller’s permit include:

  • Register In Person. You may register for a seller’s permit in person at one of the Board of Equalization’s field offices.
  • Register by Mail. You can get an application for a resellers permit mailed to you by calling 800-400-7115.
  • Apply Online.

There is no charge for a seller’s permit.

9. How Do You Start A Car Detailing Business In California?
  • Plan your business
  • Form a legal entity
  • Register for taxes
  • Open a business bank account & credit card
  • Set up business accounting
  • Obtain necessary permits and licenses
  • Get business insurance
  • Define your brand
  • Create your business website
10. How Much Is A Seller’s Permit In California?

There is no charge for a seller’s permit, but security deposits are sometimes required. You can apply online using online registration or you may apply at a nearby CDTFA location.

11. What Type Of License Is Needed To Start A Security Business In California?

Private Patrol Operator (PPO) license. You’ll need to pay a $550 fee for your qualified manager application and a $770 fee for your license.

How to get a PPO license

  • Be at least 18 years old.
  • Must have at least one year of paid experience totaling not less than 2,000 hours as a patrolman, guard or watchman, or the equivalent.
  • Pass a written examination.
  • Undergo a criminal history review by the Department of Justice and the FBI.
12. How Can You Legally Start A Business At 14 In California?

If you can sign contracts, you can own a business. In California, the legal age for purposes of contractual consent is 18. However, there are ways to start a business with a consenting parent or guardian, possibly with an irrevocable trust back to the child, who co-signs all agreements.

You can also act as a sole trader before you are 18, as long as there are legal documents you need to sign, like leases, contracts etc. City and county officials in your jurisdiction can outline the requirements, explain penalties for noncompliance and provide the proper paperwork to get the process rolling.

13. What Is Better A California LLC Or A California Corporation?

Both structures are very effective in providing the owner with limited liability. It boils down to taxes, fees, maintenance, corporate formalities, and whether you want to raise money.

California LLCs are more popular for new entrepreneurs that want to keep things simple and cost-effective and do not want to raise money or have the ability to sell shares. California S-Corporations are better for the entrepreneurs that anticipate making large amounts of money in the first couple of years and also foresee needing to raise money from US residents.

14. How Much Does A Business License Cost In California?

Business licenses are administered by cities in California, so prices vary from place to place. Typically, business licenses cost between $50 and $100.

15. What Business Licenses And Permits Are Needed In California?

Any business owner must obtain a general business license in the city in which your business is located. Some California cities refer to a business license as a business tax certificate. Businesses that are operated in unincorporated sections of the state must obtain their license or tax certificate on a county basis. Generally, you may need;

  • Alarm Permit
  • Building Permit
  • Business License and/or Tax Permit
  • Health Permit
  • Occupational Permit
  • Signage Permit
  • Zoning Permit
16. How Much Does It Cost To Dissolve An LLC In California?

There is no fee to file a certificate of dissolution. However, there is a non-refundable $15 special handling fee for processing documents delivered in person at the Sacramento SOS office. It can take the SOS many weeks to process a certificate. However, expedited service is available for an additional fee.

17. How Long Does It Take For An LLC To Be Approved In California?

The state will approve your California LLC in 3-5 business days. Also, if you form your LLC during peak filing season (December through January), approval can take up to 6-7 business days. You can form your California LLC online or by mail.

18. Can You Make Food At Home And Sell It In California?

Since 2013, The California Homemade Food Act has allowed home cooks to make and sell certain low-risk foods from home, such as baked goods, jam, and granola—but it does not allow vendors to sell hot, home-cooked foods.

19. Which Is Better, A California LLC Or A Sole Proprietorship?

One of the key benefits of an LLC versus the sole proprietorship is that a member’s liability is limited to the amount of their investment in the LLC. Therefore, a member is not personally liable for the debts of the LLC. A sole proprietor would be liable for the debts incurred by the business. 

20. Do You Need A Business License To Be An Independent Consultant In California?

Even the most limited consulting business may need a license from a state or local government office. If you will be selling goods as part of your consulting business, California also requires you to obtain a seller’s permit through the state’s Board of Equalization.

21. When Is The Best Time Of Year To Form A California LLC?

Consider incorporating or forming an LLC between December 17 and December 31. California’s 15-day rule allows you to incorporate or form an LLC during the last 15 days of the year and avoid filing tax returns for 2020.

22. What Is An EIN And Why Is This Extra Information Needed While Starting A Business In California?

EIN is short for employer identification number. It is a nine-digit number issued by the IRS and used to identify businesses and individuals for tax purposes. As a business owner, you’ll need an EIN to open a business bank account, apply for business licenses and file your tax returns.

You may need to obtain an EIN for a number of reasons, including business, estate, or trust banking, and hiring employees. Businesses also need EINs when they are required to file employment tax returns; excise tax returns; or alcohol, tobacco, and firearms returns.

23. Why Is It So Hard To Start A Business In California?

While living costs may be the biggest challenge to business growth in California business centers, laws and regulations also pose challenges. California, for better or worse, is a leader in stringent environmental laws, statewide rent control, contractor employment classification, and other areas.

24. Why Is It So Expensive To Start Your Own Business In California?

Due to the multitude of tax disadvantages that burden the California LLC, it is a very expensive means to operate a business. It is therefore typically in the owners best interest to form a corporation, rather than a LLC, unless the entity is being formed to hold real estate.

25. How Much Taxes Does An LLC Pay In California?

Every LLC that is doing business or organized in California must pay an annual tax of $800. This yearly tax will be due, even if you are not conducting business, until you cancel your LLC. You have until the 15th day of the 4th month from the date you file with the SOS to pay your first-year annual tax.

26. What Happens If You Don’t Pay California Franchise Tax?

The California Franchise Tax Board imposes a penalty if you do not pay the total amount due shown on your tax return by the original due date. The penalty is 5 percent of the unpaid tax (underpayment), plus 0.5 percent of the unpaid tax for each month or part of a month it remains unpaid (monthly).

27. Do You Need A Seller’s Permit To Sell Online In California?

Generally, if you make three or more sales in a 12-month period, you are required to hold a seller’s permit. This applies even if your sales are made through Internet auction houses, such as eBay and uBid, or websites that offer online classified advertisements (online advertisers) such as Craigslist.

28. What Are Some Laws To Be Kept In Mind While Starting Up An Agricultural Business In California?
  • 2018 farm bill
  • Right to Farm
  • Clean Water Act
  • Endangered Species Act (ESA
  • Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
  • Clean Air Act
  • Emergency Planning & Community Right to Know Act (EPCRA)
29. What Are Profitable Businesses In California That I Could Start With 20k?
  • Customized cake selling
  • Babysitting
  • Mobile Parlor
  • House Cleaning Services
  • Alteration/Sewing Services
  • Catering
  • Musical Performance
  • Computer Repairer/Troubleshooter
  • Web Design/Development
  • Paying Guest Services
  • Errand Services
  • Day Care
  • Artists Agency
  • Training School
  • Event Management
  • Moving Restaurant
30. What Type Of Business Can You Start With 40k In California?
  • E-commerce
  • Supplementary Educational Businesses
  • Wholesale Electronic Trade
  • Shoe Stores
  • Beauty Services
  • Real Estate Rentals
  • Non-instructional Educational Support Services
  • Electronics and Appliance Stores
  • Secondhand Retail
31. Do You Need A License To Sell Homemade Food In California?

You must get a permit from the county health department to operate a home-based food business in California. You can choose from two types of permits, depending on whether you want to sell products directly to customers or through other local businesses like shops or restaurants.

32. What Are The Pros and Cons Of Incorporating In Wyoming?

Pros

  • Many companies incorporate in Wyoming because the administrative costs are generally lower than in Delaware or Nevada. Unlike many states, Wyoming does not require licensing or filing fees to be paid to complete the process of incorporation. The only fee Wyoming charges is an annual filing fee to maintain the corporation, which is $52.
  • Wyoming also has personal asset protection laws in place to protect business owners and company officers from losing assets like cars and houses in the event of litigation.
  • The state also takes data protection laws seriously, requiring registered agents to maintain private data for businesses rather than have sensitive data entered into a public database.
  • Wyoming doesn’t require business owners to be U.S. citizens in order to incorporate

Cons

  • Forming a corporation in a different state won’t necessarily save a business any money in the long run. Incorporating out of state will usually do little for a business unless it conducts its operations in that state.
  • Incorporating in a tax-friendly state is not an effective strategy for reducing taxes unless the business plans to operate in that state.
33. What Are The Pros Cons Of Incorporating In Delaware?

Pros

  • Many corporations register in Delaware because of the state’s lucrative tax codes and corporate-friendly laws.
  • Delaware’s separate Court of Chancery provides businesses with faster resolutions and more predictable outcomes to business disputes.
  • Delaware also has the Delaware Asset Protection Trust to protect personal assets from creditors in the event of litigation.
  • Delaware attracts many corporations because the state has no income tax. Additionally, Delaware does not charge corporate taxes from corporations which are incorporated in Delaware but do not conduct business in the state

Cons

  • The state levies an annual franchise tax on the par value of common stock. The franchise tax starts at $75 plus a $50 filing fee and can reach up to $180,000.
  • Delaware also requires businesses to name a registered agent with a physical Delaware street address at the time of incorporation.
34. Which State Is Better To Start A Small Business, California Or Texas?

According to The Best States for Small Business 2019, a recent study from Guidant Financial, Texas is one of the top two states for boomer and millennial entrepreneurs to start up a business.

35. Do You Have To Pay The 800 California Llc Fee The First Year?

Every LLC that is doing business or organized in California must pay an annual tax of $800. You have until the 15th day of the 4th month from the date you file with the SOS to pay your first-year annual tax.

36. What Ecommerce Software Is Best For Selling Online In California?
  • Shopify (and Shopify Plus)
  • BigCommerce
  • Magento
  • Woocommerce
  • Squarespace
  • Wix
  • Big Cartel
  • Salesforce Commerce Cloud
  • Volusion
37. What Business Should You Start In 2021?
38. Who Pays CA Franchise Tax?

Every corporation that is incorporated, registered, or doing business in California must pay the $800 minimum franchise tax.

39. What Is The Benefit Of Structuring Your Business As A Corporation?

Advantages of a corporation include personal liability protection, business security and continuity, and easier access to capital. Disadvantages of a corporation include it being time-consuming and subject to double taxation, as well as having rigid formalities and protocols to follow.

40. When Should I Turn A Sole Proprietorship Into An LLC?

As soon as the business has even one paying client, the owner is open to liability and should create an LLC or corporation to provide legal protection. The LLC or corporation provides a separation between the business assets and the personal assets.

41. Can You Make Payments To The Franchise Tax Board?

Individual and business taxpayers can make payments to the Franchise Tax Board in many ways. Starting in May 2014, a credit card payment option for businesses was added. Corporations, partnerships, and limited liability companies (LLC) now have the option to pay the California Franchise Tax Board (FTB) by credit card.

42. How Do You Start A Small Business From Home?
  • Identify your small business idea
  • Start as a side business or hobby
  • Decide on your software
  • Create a business plan
  • Decide whether you’ll be an LLC or sole proprietorship
  • Create a business bank account
  • Determine if your business idea works well from home
  • Set up an office
  • Market your business
43. Should I Use An LLC Formation Service Or Do It Myself?

Ultimately, the choice between forming an LLC yourself or using a professional formation service comes down to cost versus time and convenience. While it’s less expensive to file yourself, you will still need to pay state fees. SO you need to figure out which is best for you.

44. What Were The Most Successful Small Businesses?
45. What Businesses Are In Demand Today?
46. What Is The Best Business For Beginners?
47. Can Your Business Mail Be Sent To Your Registered Office Address?

When you form a Limited Company you cannot use a P.O. Box for your Registered Office Address. This is because by law your Registered Office must have a physical location, so you need a brick and mortar address that can receive your official correspondence from Companies House and HMRC.

48. Is IRS And Franchise Tax Board The Same?

No. While the IRS enforces federal income tax obligations, the California Franchise Tax Board (FTB) enforces state income tax obligations.

49. Will The FDIC Insure Money Held By An LLC Or Corporation?

As with consumer accounts, total deposits in eligible business accounts from a corporation, partnership, LLC or unincorporated organization at a bank are covered up to $250,000 by the FDIC.

50. Which Licenses Or Permits Do You Need To Conduct Business?

Examples of commonly required licenses and permits include:

  • General business licenses
  • Tax registrations
  • Health permits
  • State-issued occupational licenses
  • Liquor licenses
  • Lottery licenses
  • Reseller’s licenses
  • Zoning and land-use permits
51. What Is The Difference Between A Trademark, Copyright And Patent?

Copyright secures creative or intellectual creations. Trademarks secure the branding under which products and services are sold. Patent secures inventions that are useful for the world and has some use. E.g. New invention in pharmaceutical industry.

A patent protects an invention for 20 years, but it cannot be renewed. The code of the software will be protected by a copyright, while the functional expression of the idea will be protected by a patent. The name of the company or the software will come under a trademark.

52. What’s The Easiest Business To Start?
  • Gardening and Landscaping Services
  • DJing
  • Painting
  • Yoga Instruction
  • Local Tour Guide
  • Tutoring
  • Face painting
53. What Kind Of Documents Do You Need To File If You Are Forming A Sole Proprietorship?

You will have to fill out a registration form for a “fictitious name” or “Doing Business As” DBA. In some states, individuals register sole proprietorships with the state government or the county clerk’s office. Appropriate identification will be required such as your driver’s license or your state ID card. You may also need an EIN.

54. Does Your LLC Need A Bank Account?

Some businesses must legally separate personal and business funds. If you operate as a limited liability company (LLC) or a corporation, you must open a separate business account. Sole proprietorships and partnerships without DBAs are not legally required to open a business bank account.

55. Which Industry Is Most Profitable?
56. What Happens If You Don’t Pay LLC Tax?

When you do not pay your minimum LLC tax of $800, the Franchise Tax Board (FTB) will charge you a penalty. Eventually, if you do not pay the tax your LLC will be suspended.

57. Do You Need A Sellers Permit To Sell On Shopify?

The short answer is yes. If you operate a business, the only time you can operate without registering or incorporating is if you use your own personal name for the business.

Ajaero Tony Martins