Start A Business In California

 If you are thinking of starting a business, specifically one in California, there will be various steps to follow to ensure you start it on the right foot and file all the necessary documents with the Secretary of State. This article will provide a step-by-step guide on the fundamental parts  to start a business in California.  

How to Start a Business in California

1.    Business Plan

To set the foundation of your business you will need to create a business plan with a clear vision and mission with a USP (unique selling proposition) and pitch that will describe your business. Some points to include in your business are as follows, it is important to keep in mind that these will change over time as your business grows.

  • What is the specific problem your business will solve?
  • Who is the target market?
  • What other businesses are in your industry?
  • What are your business goals?
  • What is your brand and marketing plan?

2.    Business Structure and Registration

Once your business plan is in place, you will need to indicate the type of business, will it be an LLC (Limited Liability Company), Corporation (S-Corp or C-Corp), Sole Proprietorship or Partnership? Each business structure will require and provide different options related to taxes and liability insurance.

To register your business, you need to file various business formation documents with the state of California. It’s recommended to use available filing services to assist with this process as the costs of hiring an attorney can be high.

3.    Business Compliance

Business compliance refers to staying up to date with the law’s rules and regulations regarding your business, and what relevant licenses and permits to apply for – these will be on a local, state, and federal government level.

Local: For general licenses or permits refer to California’s Chamber of Commerce for application forms.

State: The website for the Department of Tax and Fee Administration in California will provide the necessary permits and licenses on a state level, as well as information pertaining to state business taxes.

Federal: The Small Business Association (SBA) website will provide the resources and information about business taxes and any special applications related to business activities and the relevant issuing agencies.

Hiring a business license service will minimize time and confusion in the process of finding the right permits or licenses.

4.    Business Bank Accounts and Protection

Opening a business bank account will safeguard your personal assets (car, home, or personal bank accounts) from the business’s assets. It’s recommended to treat your business as an independent entity to avoid any risks in the event of lawsuits or unforeseen circumstances.

There are various banks to choose from depending on your business’s needs. Not only will a business bank account improve credibility as a business, it will also increase credit scores, making it eligible for business loans and funding opportunities. When you open an account you will need an EIN (Employer Identification Number).

5.    Business Funding

If your business needs funding, there are various factors to consider before applying, these include the following:

  • What type of product are you selling?
  • What is the ownership and business structure?
  • What are your business and personal finance levels?

6.    Business Brand and Marketing

A well-developed brand will say a lot about what type of business you have, this includes a suitable logo and a website. A good logo is original (it doesn’t copy your competitors), professional, and it has an attractive visual appearance, for example, the primary colors that will represent your brand.

Marketing your business is an important step to attract clients. It’s important to have a good marketing strategy to measure results, additionally, focus on developing and improving one method at a time to connect to your audience, for example, email marketing, social media, or SEO (Search Engine Optimization).


Visit TRUiC’s website for more in-depth resources and recommendations about how to start a business in California.


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