Start Business In Florida but you’re not quite sure where to begin. The good news is that the Sunshine State is entrepreneur-friendly, which makes it a terrific place to launch a new business. Still, when setting up a new company, it pays to do your homework so you don’t make costly blunders you’ll regret.
Forbes Advisor created this step-by-step guide to starting your business in Florida to equip you with everything you need to know to get operational. You’ll learn how to select the best entity type for your needs, register your company in Florida, set up your finances and acquire funding and remain compliant with Florida business laws and regulations.
Before You Start
Starting a new company can be risky as only about half of all new businesses survive beyond five years. You’ll vastly improve your odds of long-term success if you take your time doing thorough market research and competitive analysis and then creating a solid business plan before you do anything else.
Do Your Research
Do you already have a business idea in mind, or are you still on the fence about what type of business you want to start in Florida? The first thing you must do is come up with a viable idea. Questions to consider when researching your business concept include:
- What products or services should you offer, and how are those needs being met currently?
- Who are your target customers and why will they do business with you?
- Who will be your top competitors?
- How will you differentiate your products or services from competitors?
- How will you attract customers?
- Will the location in Florida you choose impact your sales? If so, are there locations that seem to be overserved or underserved?
It helps to visit businesses similar to the one you plan to open. Make a purchase―buy a product or service offered by future competitors―to get the full customer experience.
You also need to do first-hand research by talking with people who fit your definition of your ideal customer. This will help you confirm or disprove your assumptions, so you don’t make critical mistakes when launching your business.
Create a Business Plan
You may not know how to write a business plan, but it’s not as difficult as you might think. At its core, a business plan is an outline of what your business is all about. It includes an overview of what your company does, products or services offered, short-term and long-term goals, market research findings, best business location options, anticipated business startup costs as well as operational costs and startup funding options for your new Florida-based business.
Choose Your Entity
To start a business in Florida, you’ll need to choose a business name and decide on your company structure. There are several types of business entities, including sole proprietorships, limited liability companies (LLCs), limited liability partnerships (LLPs) and corporations.
A sole proprietorship is an unincorporated business that has just one owner. Unlike corporations, sole proprietorship income is taxed as the owner’s personal income. If you decide on a sole proprietorship, you will be personally responsible for your business debts and obligations as the business owner. If you operate in Florida, there is no Florida income tax, but you would be required to collect sales tax if applicable.
Freelance and gig workers often start as sole proprietorships and then later upgrade to an LLC once business profits warrant the expense of setting up an LLC.
Limited Liability Company (LLC)
Unlike a sole proprietorship, an LLC is a separate legal entity with one or more owners or members. When you form an LLC, creditors cannot legally go after your personal assets as long as those assets were secured by the LLC instead of by you personally. Should your LLC ever go bankrupt, your personal assets are shielded from liability from creditors and employees. An LLC can choose to be taxed as a sole proprietorship, partnership or corporation.
There are many ways to start an LLC in Florida. The best LLC services handle all the details of business formation for you, including obtaining a federal employer identification number (EIN) and filing legal documents required by the state of Florida to establish your business.
Limited Liability Partnership (LLP)
An LLP is similar to an LLC because it offers owner partners legal protections. In Florida, however, LLPs are still personally liable for the debts of the partnership. The LLP provides each partner protection from other partners’ liabilities. LLPs are commonly used by those who provide professional services, including architects, attorneys and accountants. While some states do not offer LLPs, Florida does.
LLPs are pass-through tax entities, with the partners paying income tax on the company’s profits on their personal tax returns.
Starting a corporation is similar to forming an LLC, though the structure of a corporation is different. As with LLCs, corporations are separate legal entities that protect owners’ personal assets, but corporations also have shareholders, directors and officers. Corporations are subject to other requirements, such as holding regular shareholder meetings and maintaining corporate records.
An S corporation (S-corp) is a type of corporation that offers certain tax advantages to those who qualify for S-corp status. Larger organizations that want to issue more than one class of stock or depend on attracting venture capital are usually incorporated as C corporations (C-corps).
Choose a Registered Agent
If you’re setting up an LLC, LLP or corporation in Florida, you will need to name a registered agent for your company. A registered agent is an individual or company you designate to receive essential legal, tax and government correspondence on behalf of your business. You can act as your own registered agent.
Many businesses prefer to acquire registered agent services from a third party. For a relatively modest fee, the best registered agent services ensure that you never miss an important piece of correspondence and alert you to upcoming filing deadlines for your business.
Register Your Company
Once you’ve chosen which type of business entity you want to form, you are ready to register your business in the state of Florida. The fastest and easiest way to form a new company is to work through an online legal service that offers business formation services.
You can also register your business yourself using the forms supplied on the Florida Department of State Division of Corporations web page.
You will need to supply the following when registering your new company in Florida:
- The name of your company; you can search the Florida Department of State’s database to see if the business name you want is available
- A federal EIN, which is require for all business entities except sole proprietorships and LLCs with no employees
- Your full name and business address
- The name and contact information for your registered agent
When self-filing a new LLC in Florida, you’ll pay a $100 filing fee and a $25 registered agent fee. When filing a new corporation in Florida, you’ll pay a $35 filing fee plus a $35 registered agent designation fee. The filing fee for a new limited partnership is $965, with another $35 fee charged for registered agent designation.
Register a DBA
If you plan to do business using a different name than your own legal name or one you’ve established for your business, then you’ll need to register a DBA in Florida–DBA is short for doing business as. For example, if your customers know you by Adventure Website Design, but you’ve formed your business under the name Jack Smith Creative Services, LLC, you will need a DBA for the name Adventure Website Design.
The registration fee for filing a DBA, also called a fictitious name, is $50, and you’ll pay an additional $30 if you want a certified copy of your DBA registration.
Business Licenses PREDIKSI EYANGJITU
Registering your new business in Florida is an important step in starting your business, but you may be subject to additional small business legal requirements. For example, some types of companies that offer specific services, including architects, real estate brokers, medical professionals and accountants require a Florida business license.
The Florida Department of Business and Professional Regulation (FDBPR) and the Florida Department of Agriculture and Consumer Services (FDAC) offer specific Florida licensing requirements for different types of businesses. Visit the Florida Department of Health (FDOH) for information regarding business licenses for healthcare-related professions, such as dieticians, massage therapists and athletic and personal trainers.
Your new business may also be subject to local licensing regulations and permits. Florida hosts a website called Open My Florida Business that details specific business requirements by county.
Fund Your New Business
Many new startups are self-funde. If you don’t have the money on hand to launch your new business, there are several small business financing options at your disposal to acquire the funding you need. Here are a handful of funding options to explore:
- Business startup loans: Startup business loans are ideal for companies with no established credit history. Terms and fees vary by loan type and vendor.
- Crowdfunding: Equity crowdfunding is a relatively new way to raise money for starting a business.
- Small business grants: Small business grants are available from nonprofits, corporations and government entities. Unlike loans, grants do not require repayment.
- Family and friend loans: Many new businesses start with loans from friends or family members. Family loans come with both benefits and pitfalls. If you go this route, set out clear loan conditions and expectations. However, exercise caution here as this can put relationships at risk.
- Angel investors: If your startup appears to offer significant promise, an angel investor, which can be an individual or a business, may want to provide funding for your company, typically in return for an equity stake in your business.
- Small Business Administration (SBA) loans. SBA loan programs are another popular way to fund your new business. With an SBA microloan, you can borrow up to $50,000; other SBA loans offer loan limits of up to $5 million.
Remember that the best small business loans offer terms that make sense for your business model. It’s wise to explore several different funding options to determine the best for your specific business needs.