How to Start a Business in California

With the largest economy in the US and better access to venture capital than anywhere else in the world, California is a great place for entrepreneurs. Start your business today with our simple step-by-step guide and get on the fast track to financial and personal independence. If you get stuck along the way, connect with a business resources in your local area for help.

To Start a Business in California, follow these steps:

Step 1: Choose the Right Business Idea


The first step toward business ownership is deciding what kind of business to start. Look for an idea that suits your interests, your personal goals, and your natural abilities. This will help you stay motivated when the going gets tough and will greatly improve your odds of success. Need inspiration? Here were the most popular ideas among our California visitors in 2017:

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Find the Right Business Idea for You

Our free Business Ideas Tool will help you identify great businesses that match your interests and lifestyle.

Business Ideas
Tool

Step 2: Plan Your Business


Successful businesses are built through careful planning. Before committing a significant amount of money and other resources toward your business, critically analyze your idea and create a game plan. At a minimum, you should have good answers to the following questions.

Product Development
What problem does your business solve? What will set your product or service apart from the competition?

Sales & Marketing
Who are your potential customers? How will you get their attention and convert them into buyers?

People and Partnerships
What roles will you need to hire and what professional relationships will you need to form in order to succeed?

Financial Planning
How many clients or sales will you need in order to break even? How much money will it take to get there, and where will you get the funding?

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Start Planning

Our Business Planning Guide helps you analyze your business idea and gets you access to free planning tools.

Need Help? Find organizations in your local area that can assist you with planning.

Step 3: Form your Business


Registering your company as an California business entity, such as an LLC or a Corporation, has two major advantages:

  • Increased credibility
  • Protection from personal liability in the event your business is sued

For most small businesses, registering an LLC is a great option. In comparison to other business entities, LLCs are easier to set up and manage and they have favorable tax treatment. You can set up an LLC in California for as little as $70.

If you choose not to register your company as a business entity, you will be held personally responsible for the debts and liabilities of your business. In addition, unregistered business owners may need to file a Trade Name, also known as a "DBA." Find out if your business is required to file a DBA.

Secure your Domain

We recommend that you check to see if the business name you are planning is available as a web domain. Even if you aren't ready to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Find a Domain Now

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Step 4: Register for Taxes


With limited exceptions, most businesses require an Employer Identification Number (EIN), also known as a Tax ID Number. An EIN is used to identify a business in its federal tax filings. Without an EIN, you can't hire employees or open a business bank account.

Obtain an EIN

You should also be aware of important california taxes that may apply to you business:

  • If you are selling a physical product, you’ll typically need to register for California sales tax.
  • If you hire employees, you will need to register for California employeer taxes, which includes withholding tax, unemployment insurance tax, and disability insurance.
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Register for California State Taxes

Sales Tax | Employer Tax

Step 5: Create Business Banking and Credit Accounts


Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.
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Recommended: Get $200 when you open a business checking account with Chase. Learn more.

2. Getting a business credit card:

  • Helps you separate personal and business expenses.
  • Builds your company's credit history, which can be useful to raise capital later on.

Step 6: Set Up Accounting


An accounting system helps you track the performance of your business and simplifies annual tax filings. Quality accounting software lets you download your bank and credit card transactions, making accounting fast and easy. Learn more about the importance of accounting and how to get started with accounting today.

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Recommended: QuickBooks has all the accounting features your small business will need.

Try QuickBooks for free

Step 7: Obtain Permits and Licenses


To operate your new business legally, you will need to comply with federal, state, and local government regulations. In many cases, this involves obtaining one or more business permits and/or licenses. For example, a restaurant will likely need health permits, building permits, signage permits, etc.

Step 8: Get Insured


Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance you should consider are:

We recommend that all small businesses, including home based businesses, purchase a general liability policy. Businesses selling professional advice or services, such as consulting and accounting firms, should also consider a professional liability policy. In California, businesses with one or more employees, including officers and LLC members, are required by law to have workers compensation insurance.

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Our recommended insurance provider can set you up with an insurance policy that is right for your business

Get a Quote

Step 9: Define Your Brand


The strongest and most memorable businesses are built on a solid brand.

When developing your brand, think about what your business stands for. What are the core values that drive your business? Customers and clients are looking for companies that have a compelling brand, as much as they are shopping for high quality products and services.

Your business name is the cornerstone of good branding and a successful business. To learn more about creating the best name for your business, read our How to Name a Business guide.

Step 10: Establish a Web Presence


A professional website is critical to the long-term success of your business, regardless of what industry you are in. A website allows potential customers to find your business online and discover the products or services you offer, and it also enhances your business’ credibility.

In addition to a website, you should also consider other avenues for promoting your business online:

  • Setting up social media profiles (Facebook, Twitter, etc)
  • Creating accounts on review sites (Yelp, Google Reviews, etc)
  • Registering for a local Google profile
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More than ever, people are looking for reviews before doing business. Yelp is an important aspect of social validation for your business, claim your page today and get $300 in Yelp advertising credit.

Sign up for our Business Center

Sign up for a free Business Center account for access to tools, legal documents, and discounts that will help you start and grow your business

Signup Now

Get Help From Local Resources

To help you start your business, we have identified the best resources across the state of California that can support you in your entrepreneurial endeavors.

Select your Region

Fresno Local Resources

Water, Energy, and Technology Center

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Networking

Offers Free Service

Description

WET is an accelerator dedicated to spurring economic growth in the water, energy, and agricultural technology industries. They facilitate networking among local members to foster organic collaboration. Their Valley Ventures program is a startup accelerator that offers close mentoring and technical support through industry connections, among other startup services. Services are grant-funded and therefore are free to startups. WET is a program run by BlueTechValley, a region-wide entrepreneurial support organization.

Restrictions

Startups must be in the water, energy, or agricultural technology sectors

CONTACT INFORMATION:

2911 E. Barstow Ave.
Fresno, CA 93710
559-278-4540
hellep@mail.fresnostate.edu

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Fresno Resources

Irvine Local Resources

Eureka Building

Here are the Principle Service Areas:

  • Business Planning
  • Coworking
  • Networking

Description

Eureka Building offers coworking space, regular meetups with other entrepreneurs, and plenty of events such as the annual Eurekafest. Some of its events are more targeted to the tech industry, but all business owners are welcome to rent coworking space and attend events.

CONTACT INFORMATION:

1621 Alton Pkwy.
Irvine, CA 92606
949-220-6500
info@eurekabuilding.com

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Irvine Resources

Los Angeles Local Resources

Managed Career Services

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Financial
  • Sales & Marketing

Description

Managed Career Services aims to support businesses in California through three programs. The MCS LA Business Source offers a whole suite of services including business planning, mentoring, product development, and more all free of charge. LA Business Source Centers have 9 locations in the Los Angeles area and work with businesses and entrepreneurs from the idea stage all the way to grow a company. Future Entrepreneurs in LA takes young entrepreneurs and teaches them the skills they need to successfully launch a business, gives them the seed funding to get started, and helps them launch their businesses at the end of the program. Working LA is a creative workspace that houses freelancers, startups, and established businesses alike.

 

 

CONTACT INFORMATION:

3333 Wilshire Blvd, Suite 405
Los Angeles, CA 90010
213-355-5300
info@mcscareergroup.com

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Los Angeles Resources

Oakland Local Resources

Impact Hub Oakland

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Coworking

Description

This local node of the global Impact Hub network is a premier organization that fosters collaboration, networking, and positive entrepreneurship through events and accelerator programs. Their Business Academy hosts several accelerator cohorts that cater to different needs while the events they host range from educational seminars to pitch competitions and workshops. For bootstrapped startups, they offer a work-trade program where membership is free to members who use their skills to assist in keeping Impact Hub Oakland running. Paid membership plans are priced according to hours of coworking per month you require.

CONTACT INFORMATION:

2323 Broadway
Oakland, CA 94612
510-858-2323

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Oakland Resources

Sacramento Local Resources

Hacker Lab

Here are the Principle Service Areas:

  • Business Planning
  • Coworking
  • Product Development

Description

Hacker Lab is a coworking space primarily geared towards tech and art businesses. Its amenities include a woodshop, metal shop, textile lab, computer/electronics lab, 3D printers, etc. It also hosts classes on various art and technology techniques. 

CONTACT INFORMATION:

1715 I Street
Sacramento, CA 95811
916-514-7044
contact@hackerlab.org

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Sacramento Resources

San Diego Local Resources

Nest Cowork

Here are the Principle Service Areas:

  • Mentoring
  • Coworking

Description

Nest is a coworking ecosystem that provides coworking space and support services to help entrepreneurs start and launch a business. Judged as a coworking space, Nest offers some unique amenities like a full-service cafe serving coffee and sandwiches, conference rooms, 3D printers, and showers. As an incubator, membership with the coworking space grants access to a network of consultants who can assist you in a variety of legal, marketing, and other matters for free. Membership is tiered to accommodate different professional needs and is all-inclusive (no surprises).

CONTACT INFORMATION:

1855 First Avenue, Suite 103
San Diego, CA 92101
619-773-0378
info@nestcowork.io

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San Diego Resources

San Francisco Local Resources

San Francisco Economic Development Alliance

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Financial

Offers Free Service

Description

The SFEDA offers many services to entrepreneurs starting small businesses, including educational and mentoring programs. This alliance offers numerous workshops, seminars, and other events lead by local professionals and experienced entrepreneurs. Mentoring is available on specific topics such as loan advice or small business skills, and there is a dedicated program for minorities of color. Their financial planning services can help you receive unbiased advice on how to secure funding and what routes are best for your situation. A real estate program can help entrepreneurs secure workspace in a complex market.

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San Francisco Resources

San Jose Local Resources

ActionSpot

Here are the Principle Service Areas:

  • Business Planning
  • Coworking
  • Sales & Marketing
  • Networking

Description

ActionSpot is both an incubator and a coworking space. Their advisory panel includes scientists, engineers, and businesspeople. Though they can and will assist any kind of business, they specialize in data science, artificial intelligence, deep learning, virtual reality, and data security. 

Restrictions

Must be a technology oriented business. 

CONTACT INFORMATION:

99 Wilson Ave.
San Jose, CA 95126
408-899-4128
info@myactionspot.com

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San Jose Resources