How to Start a Business in California

Starting a business in any state requires certain steps that are fairly universal. California is in a class all their own. An often-cited statistic is that if California were a nation, its GDP would be the fifth-largest in the world, surpassing India that has a billion residents. This means that California has a few more regulatory hurdles than some smaller, more free-range states. Even still, the steps to starting a business in California are pretty straightforward.

Write a Business Plan

This should go without saying, but this step gets forgotten by many. No matter where you are, or what type of business you are starting, a business plan is a must. Your business plan should include what market problem you aim to solve, and how you plan to solve it. You should include the costs of operation as well as a realistic prediction of first-year revenue. Be thorough with those costs, as they will help you determine how much start-up capital you will need, and whether your business is feasible. 

Everything that comes after, including potential financing, will hinge on the quality of your business plan, so this should take some time, and be as accurate as possible. 

Pick a Name

The name of your business is incredibly important. All of your branding will build on the name you choose, and the name is obviously the first interaction most customers will have with your company. The name should reflect something about your identity and what you do. It should also be memorable and needs to be unique enough that it can be trademarked. Chicken Filet is just two generic words, and could never pass a trademark, but mash them together, tweak the spelling, and throw in some hyphens, and you have Chick-fil-A, a billion-dollar brand. 

Choose Your Structure

There is a wide array of options on structures for your business, from sole proprietorships to LLCs, to various types of corporations. Research each option, as all have advantages and disadvantages, from a tax standpoint, as well as a liability standpoint. What works best for an online services firm is not the same as a cafe, or even another online services firm. Consider your specific needs and how each format would work for you.

The structure of your business will also affect how your name is implemented. Your DBA name can be whatever you want (as long as it’s unique) but your official name will have to include the type of registration you are seeking (LLC, incorporated, etc). Now you can research to ensure that your company name is not already registered. You will need to search the patent office database and confirm with the California Secretary of State as well. Register your name to lock in your brand.

Find Your Location

This is the final step before setting up to open. Most people would think that you want to start with the location, and then build your business plan around it. While there are surely situations where a perfect location comes along and begs you to put something there, without a proper plan for all of the other steps, you can start up at your dream location only to run into trouble further along in the process. Once you decide to find a home, look for an area that provides the access you will need (for example, will your business need a loading dock?). Once you have done this, see if the rent fits your business plan and make an offer!

No matter what kind of business you want to start in California, you will need to plan everything thoroughly before you get started. Follow the plan and don’t skip any steps, and you could be another Cali success story!