Start a Business in Virginia
Forbes made a list of states that were easiest to do business in and Virginia ranked 3rd place – making starting your own business in the state of Virginia an excellent option for business owners and entrepreneurs.
It is said that starting your business is a way to speed up your journey towards personal and financial independence so here is a guide that will take you through the steps you need to take to start your own business in the state of Virginia.
It is also possible to form your business on your own.
Successfully establishing your business venture will demand sufficient funding, time, and support both personally and professionally.
There are several steps to forming a business in Virginia and today we are going to go through each one of them in detail.
By the end of this post you should have all of the resources and knowledge necessary to form your Virginia business.
Let’s get started!
Step 1: Choose the right idea for your business
The first step an aspiring business owner would need to take is to determine what business to establish.
It helps to choose an idea that lines up with what your natural capabilities are and it also helps to choose an idea that makes you work towards your personal goals and suits what you are interested in.
Selecting a business idea based on the criteria mentioned will aid you in keeping motivated especially during trying times and will also increase the likelihood of your business succeeding in the long run.
A list of ideas to help get your small business started can be found below based on the most prominent businesses in Virginia as of the year 2020:
- Clothing boutique
- Security guard company
- Grocery store
- Dog breeding business
- Drive in movie theater
- Bookkeeping Services
- Photography Business
Step 2: Plan your Business in Virginia
One of the things successful businesses have in common is that they are built through a plan that was carefully made.
Prior to committing large sums of money and other significant resources to start a business in the state of Virginia, it is important to have a strategy and purpose laid out that also happens to analyze your business idea critically.
At the very least, a budding business owner has to do the following:
Name your business
What name will your business be known by?
When choosing a name for your business, you will have to choose one that complies with the laws in Virginia.
It is also important to choose a name that is available for use while also being a name that your customers can connect with.
There are business name generators available online to help you in case you need some ideas.
It is advisable to only reserve your business name when its domain name is also available for use.
Finding a location for your business
Have you figured where to locate your business?
You can choose to open a physical establishment specifically for your business or, you can operate your business directly from your home.
Whichever way you choose, it is the location of your business that tells the state and its governing bodies what kind of permits and licenses will be applicable to your company.
The location of your business will also influence its potential for growth.
Popular commercial areas in Virginia include the Hampton or Richmond areas – which should be part of your research when choosing a location.
Choosing popular locations can possibly increase the amount of foot traffic the business receives as well as to drive in customer interest.
Conduct a market research for your business
Are you aware of who your market is and what they need or want?
It is vital for every business to meticulously conduct comprehensive research into their target market.
Market research can span different methods that involve having surveys conducted, exploring the search engine optimization (SEO) of the business, or even having focus group discussions held.
The primary purpose of market research is to understand the target market of the business better in addition to the competitors the business has for the sake of creating a business plan that would be effective.
Write a business plan
If you have never written a business plan before, there are online templates available to help you with that.
To make things even easier, there are also business plan generators available online as well where you input the information of your business into these generators and the rest of the legwork is done for you.
A business plan that is well made is not just a way for companies to stay organized; it is also a supporting document that can be used when obtaining funding that is necessary to propel a business forward which means the business can then reach the more challenging milestones it has set to reach.
Business plans can vary from business to business however, the common and main components you would usually find in these plans are the following:
- Product Development – what problems does your business aim to bring solutions to? What makes your service or product different from the rest of the competition?
- Marketing and Sales – who is your target market? How will you get the attention of your target market in order to convert them into paying customers?
- Partnerships and People – what relationships in the professional setting will need to be formed for the sake of your business and its success? Which roles in your company would you need to hire qualified individuals for?
- Financial Planning – how many clients or sales need to be garnered in order for your business to break even? How much funding is needed to get the business running? Where will the funding come from?
Resources for planning businesses are available if you need help and support from local organizations that can be of assistance in the preparation of your company in addition to being provided with other tools and resources.
Step 3: Obtain funding
Starting a business means having the means to pay for the costs that will come with its startup.
Securing funding will call for a couple of things that need to be done.
Before proceeding, the business costs you will be facing needs to be calculated and from that number, external funding can be sought.
It is the information you have gathered that would serve as a guide when selecting the best funding option for your business in the state of Virginia.
Spending wisely and having a financial plan that is well detailed should be a priority.
Explore funding options for your business
Below are some of the most common options for funding small businesses which may help you get an idea of where you could fund yours:
- Bootstrapping – for the people who would want to go down the route that allows them to do things themselves, bootstrapping is a form of financing that stems from having the capital of the business originate from the business owner’s current income and their personal savings. When the business is fully operational, whatever profits that are earned from its activities are then reinvested back into the company to further finance its growth and development.
- Friends and family – an easy way to finance your business if you do not have the capital to finance it yourself is through borrowing money from family and friends. It is advisable to have a written agreement made and signed to lay out the terms or conditions as well as the repayment plan and to prevent disputes from happening in the future.
- Small business grants – funding that is contributed to your business to help you get off the ground and does not have to be paid back are known as small business grants. A small business grant can be obtained via going through an application process with a willing grantor.
- Small business loans – lending institutions that include banks can extend funding to you when you apply for small business loans. This kind of funding will obligate you to stick to a regular payment schedule though the money it will contribute to the capital of your business is enough to cover the costs of startup or more.
Step 4: Choose a structure for your business
Having your company in Virginia registered as a legal business entity whether that be a corporation, limited liability company or a nonprofit organization has two significant benefits which are to:
- Establish authority and increase reliability
- Have security against the obligations and liabilities of the business
There are numerous resources available to help you determine which business structure would be best for your company in Virginia.
The most common business structures you could choose from are briefly discussed below:
A sole proprietorship is a kind of business of structure that is considered as informal; it is not separated from its owner and is also not an incorporated entity.
In a sole proprietorship, all the profits of the business go directly to the owner.
On the other hand, every financial liability the business incurs will have to be fully shouldered by the owner whether the business has an unsettled debt or gets served a court case.
A partnership is a business structure that is similar to a sole proprietorship in the sense that is also considered as informal and is not an incorporated entity.
Where the differences begin starts at the fact that a partnership has multiple owners unlike a sole proprietorship.
Partnerships also do not tend to have personal liability protection unlike its formal business structure counterparts.
Limited liability company
A limited liability company (LLC) is a business structure that is a hybrid of formal and informal entities.
A limited liability company merges the flexibility that a sole proprietorship or partnership has with the personal liability protection that a corporation can extend to its owners.
In most cases, a small business would opt to have a limited liability company structure as it is relatively simple to form and maintain while simultaneously helping the small business to save on tax costs.
A corporation is a business structure that is owned by the people who possess its shares known as its shareholders.
A corporation is considered as a legal entity of its own.
Corporations have regulations that are stricter and more formal in nature in comparison to limited liability companies which makes this business structure more attractive to people who are interested in investing.
In most cases, large scale companies such as the likes of Apple tend to incorporate and become a corporation to reap the benefits this business structure can grant its business.
A nonprofit organization is a business structure that is not funded by investors; instead, it is donors and their donations that fund this kind of business structure.
A nonprofit organization is exempted from tax obligations and are usually formed to develop or further a social or humanitarian cause.
An example of a nonprofit organization is The Red Cross.
Additional points for consideration:
Those who would not like to register their firm as a business entity will have to be personally accountable for every liability and obligation inclusive of debts or court cases that the business incurs during its operations.
There are cases when a sole proprietorship or partnership may have to file a DBA or a doing business as name which is also known as an assumed or fictitious name in the state of Virginia.
It should be noted that a DBA is not a legal business entity or structure and also does not have the means to grant you or your assets the same protection a corporation or limited liability company would.
Step 5: Register your business in Virginia
After choosing the business structure that is right for you and your needs, you will then need to register your business.
The process will vary depending on different factors like what kind of business structure you are going for and which state you are registering with though the steps that most businesses usually will take including the following:
- Naming the business
- Selecting a registered agent who is basically the individual or business entity that would receive legal and tax documents on behalf of your company
- Obtaining an Employer Identification Number (EIN) which is the number that is assigned to your business by the Internal Revenue Service (IRS) to identify your business for tax related purposes
- Filing out formation documents
Again, each structure will have its own procedure that is unique to it on top of the steps listed above.
To register your business in the state of Virginia, you will need to do the following:
Forming a limited liability company in Virginia
A limited liability company is the most straightforward business structure to have formed and maintained.
In most cases, a limited liability company would require less paperwork than other formal business structures so the process of forming it can be summed up in 5 simple steps:
- Name your limited liability company
- Select a registered agent for your company
- File your limited liability company with the state
- Draft a limited liability company operating agreement
- Obtain an Employer Identification Number for your company
Filing your limited liability company’s articles of organization with the state of Virginia starts at the submission of its documents of formation to the State Corporate Commission which can be done online or by mail in conjunction with the $100 filing fee.
A limited liability company can be formed by yourself or you can hire a professional service to form your limited liability company for you.
Starting a corporation in Virginia
If a corporation is what would suit your business more, there are five steps you will need to follow for a successful incorporation.
In addition to these steps, you will also need to determine what kind of corporation your business will be established as; will your business be an S corporation?
Or will it be a C corporation?
The steps for incorporating your company is as follows:
- Name the corporation
- Select a registered agent for the corporation
- Have an organizational meeting held
- File the corporation’s documents of formation
- Obtain the Employer Identification Number of your corporation
Filing your corporation’s articles of incorporation with the state of Virginia starts at the submission of its documents of formation to the State Corporate Commission which can be done online or by mail in conjunction with a minimum filing fee of $25 and its equivalent charter fee which can cost either:
- $50 for every 25,000 shares or the fraction therefore if there are only a million or less authorized shares
- $2,500 for more than a million authorized shares
Forming a nonprofit organization in Virginia
Many of the very steps that are taken when forming a limited liability company or a corporation is the same as the steps that are taken when opting to form a nonprofit organization; be that as it may, with a nonprofit organization business structure, tax exemption can be applied for through the 501(c)(3) status of the Internal Revenue Service.
The steps to forming a nonprofit organization in the state of Virginia can be summed up as follows:
- Name the nonprofit organization
- Select a registered agent for the nonprofit organization
- Elect the organization’s officers and board members
- Implement a policy for the organization’s bylaws and conflict of interest
- File the organization’s formation of documents with the state of Virginia
- Obtain the organization’s Employer Identification Number
- Apply for the organization’s 503(c)(3) status through the Internal Revenue Service
Filing your nonprofit organization’s articles of incorporation with the state of Virginia starts at the submission of its documents of formation to the State Corporate Commission which can be done online or by mail in conjunction with a $75 fee for filing.
Step 6: Set up the banking, accounting and credit cards of your business
Protecting personal resources cannot be done without first separating personal and business assets through setting up bank accounts and credit cards that are dedicated to your business and your business only.
When business and personal assets are mixed and kept in one account, the assets that the owners of the business acquired for themselves which includes their cars, properties, homes, and other valuables are susceptible to the risk of being taken away or used as settlement or reimbursement for the liabilities and obligations the business incurs such as when it gets sued.
Keeping business and personal assets in one account which results in these two kinds of assets being mixed together is what is called piercing the corporate veil in business law.
Your company in Virginia can be protected by taking the following precautionary steps:
Open a bank account for your business
Opening a bank account specifically for your business and your business only is what is essential to keeping these assets separated from those that are personal; doing this is what makes personal asset protection possible.
Opening a bank account for your business is what makes tax filing and accounting more streamlined and simpler to get done
Acquire a credit card for your business
Acquiring a credit card dedicated to your business and your business only is what will aid in separating the expenses you have incurred personally from the expenses incurred by your business during its daily operations.
Acquiring a credit card for your business is what will help build its credit history which can come in handy when trying to increase the capital of the company through small business grants or small business loans down the road if need be.
Setting up accounting for your business
Tracking the performance of your business operations can be done through having an accounting system that is dedicated to your business.
It is through having business accounting that the company’s tax filings on a yearly basis is made easier.
There is various accounting software that exists to enable you to download your credit card history and bank transactions to make accounting for them convenient, quick and uncomplicated.
There are several resources, books and other materials that can be used to help you navigate through accounting for your business.
There is also the option to hire the services of a business accountant to handle and manage your business’ tax and accounting needs for you whether that comes to dealing with payroll or even sales tax.
Accounting services could contribute to saving your business a few thousand dollars every year and because of this, it is advisable to have a consultation scheduled with a business account as soon as possible.
Step 7: Getting your business insured
Offsetting the possible risks your business could face so you can instead put your time and attention into developing and growing your company can be done by getting insured.
There are different kinds of insurance to choose from but the most common ones to get are general liability insurance, professional liability insurance, and worker’s compensation insurance.
It is recommended to have every small business including businesses that are based at home to avail of a general liability policy.
On the other hand, businesses that are rendering professional services or giving advice for sale such as what it is typical for accounting or consultancy firms should look into having a professional liability policy purchased.
Businesses that on board two or more staff or employees in the state of Virginia with business owners excluded from that count are required by law to purchase worker’s compensation insurance.
Step 8: Obtaining licenses and permits for your business
To make sure that your business fully complies with the state of Virginia’s laws and regulations in addition to the rules of the federal and local government, a newly established business will have to get the business permits and licenses that apply to its circumstances.
An example of this is when a restaurant would be obligated to have building permits, signage permits and health permits among others.
Because of the fact that different permits and licenses are needed when operating a business in Virginia which will differ on a case by case basis, a business license search can be conducted by making use of the following resources:
- Federal – The US Small Business Administration (SBA) guide is available for reference
- State – The Virginia Department of Professional and Occupational Regulation’s website is available for reference
- Local – Your local county clerk can be contacted so you can inquire on the local permits and licenses you will need
It is possible to obtain the licenses and permits of your business by yourself though using a professional service to do this for you ensures that you would not miss out on any compliance requirements to eradicate any problems you may face in the future that are related to this matter.
Step 9: Hiring employees for your business
There are businesses that can be built on having a sole employee.
There are also other businesses that flourish on having a well equipped and highly capable team.
A successful business does not only have the people it needs to efficiently and effectively operate; it also stays compliant with the requirements and regulations for legally hiring employees.
Hiring employees for your business will have you reporting new hires to the state of Virginia in addition to being registered with the Internal Revenue Service for the payment of employee taxes.
Once a solid team has been formed for your business, it is strongly advised to use a payroll service to automate the issuance of paychecks, time tracking and tax filing to ensure that these are done correctly and within the time frame it should be done in.
Step 10: Defining the brand of your business
Strong, unforgettable and concrete branding shapes businesses and makes them memorable to their consumers and potential customer’s minds.
When having a brand developed for your business, it helps to take what the business stands for, what the business’ core values are and what will earn the trust of the customers into account.
When you have determined the stand, core values, and factors that will gain consumer trust, the business will then have to be named.
The foundation of a good and influential branding which all successful businesses have in common is the business name and how notable it could be.
There are guides that are available to help you name your business.
In addition, there are logo generators that can be used to create one of a kind logos for your company in Virginia which are available at no additional costs.
These generators can be found and used without you needing to sign up for anything.
These generators can also make logos in varying sizes to be suitable for different social media platforms. No prior design experience is required to make use of these logo generators.
Step 11: Building a website for your business
Once you have the brand of your business defined with a logo that is well designed to come with it, the next step to take would be to create a dedicated website for your company.
There are plenty of people out there that feel that making a business website would be too much of a hassle and would call for prior coding experience; however, advancements in technology allow anyone without a computer science background to build their own websites.
There are many reasons why having a business website should not be prolonged.
Among those reasons are the following:
- Every legitimate business has its own dedicated website – no matter how small or large in scale a business is, getting a business to have a strong online presence is aided by having a website.
- Social media accounts such as LinkedIn business profiles or Facebook pages are not sufficient as an alternative to having a dedicated website that can be fully controlled and owned by the business versus the constraints that social media companies subject their users to.
- Available website building tools such as the GoDaddy Website Builder have made designing and owning a website nearly effortless and straightforward. Gone are the days when hiring the services of a website designer or developer were needed. At present, it is possible to make your own website through your own efforts to have something up and running that is neat, professional and fully functioning.
Website building guides are available online to walk you through the process which should not take any more than 2 or 3 hours to get done.
There are also guides and reviews available to help you choose which website builder would be best for your business.
Step 12: Promoting and marketing your business
There are several techniques and methods that can be employed to get the name of your business in Virginia out there though the methods that are considered as the most effective to use inclusive of social media and online platforms that can be maximized to help your business reach more of its target market are the following:
A strategy that is economical and worthwhile to use is having press releases that are written and published for your business.
Press releases have benefits that span for the long term.
The effort to produce a press release and the costs incurred to have that press release produced only need to be paid once.
Having customers and potential clients directed to your business website to aid in closing more sales can be done through the improvement of the website’s search engine optimization (SEO) which press releases contribute to.
Press releases also provide your business with publicity while having your business’ brand established on the internet.
Having a Facebook page for your business is a free and interactive way to connect with your company’s customers though it will demand continuous effort to keep the page active which will lead to it being more successful.
Business pages on Facebook are useful for cementing your company’s business presence in its locality, presenting the services or products your business offers, being a communication channel to bridge your business with its customers, being an avenue to accumulate customer reviews, and being a way to promote your company through paid advertisements should this be applicable for your business.
YouTube has a massive consumer base that is active with billions of users worldwide.
People who browse on YouTube could potentially be seeking the content that your business may be producing during its daily operations.
Having a YouTube channel is not just for vloggers, streamers or gamers.
It can also be used by your business to supply and demonstrate comprehensive explanations on your business’ products or services, establish stronger bonds to encourage loyalty with the business’ customers, direct traffic and engagement to the business’ social media accounts, be a marketing tool to attract more customers, improve the business’ search engine optimization thus increasing its ranking on Google and to grow the business’ conversion rate.
Google My Business
Managing how your business appears on the Google search engine results page (SERP) and on Google maps can be done through Google My Business.
Google My Business is a useful tool in growing your business’ perceived reliability, increasing customer engagement, promoting awareness of the brand via improvement of local search engine optimization and website traffic, and providing the relevant links to vital information your customers would need to know about your business such as its physical address, phone number, hours of operation, website, and customer reviews.
Getting help from resources within your locality
There are several resources that can be pulled up online that can help you begin with having your own business while extending the support you will need throughout your commercial ventures from Virginia Beach, Roanoke, Richmond, Hampton, Charlottesville, Ashburn-Arlington and Blacksburg.
Pertinent information on starting whatever business structure you deem applicable to your case can also be found on the state of Virginia’s website.
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