How to Start a Business in California

With the best economic climate in the US and better access to venture capital than anywhere else in the nation, starting a business in California is a great choice 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 resource 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. We have assembled a comprehensive list of small business ideas to help you get started. Need inspiration? Here were the most popular ideas among our California visitors in 2020:

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Find the Right Business Idea for You

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

Business Ideas

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.

Business Name
Naming a business can be challenging. You'll want to choose a brand name that follows California naming rules, resonates with your customers, and is available as a URL.

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

  • Create a robust business plan to help navigate the early years of your business. To use this free tool sign up for the Business Center.
  • Need Help? Find organizations in your local area that can assist you with planning.
  • If you’re a solo-entrepreneur, setting up a virtual office can add credibility to your business by having a business address on Google search, protect your personal privacy, and provide you with a business phone line and a live receptionist to answer your calls. Save $200 on a virtual office today.
  • If you’re a woman in business, find funding, tools and resources with this great new series Women in Business.
  • Learn how to plan, raise, and manage your funds by visiting our guide to Small Business Finance.

Step 3: Form Your Business

Registering your California company as a legal 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 online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it

Not sure what to name your business? Check out our Business Name Generator. Then, create a logo with our free Logo Maker.

Find a Domain Now

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After registering a domain name, consider setting up a professional email account ( Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

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 your 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.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and 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 (e.g., small business loans) 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

Read our review of the best small business insurance companies

Step 9: Define Your Brand and Promote your Business

The strongest and most memorable businesses are built on a solid brand. When developing your brand, you should consider:

  • What your business stands for?
  • What are your core values?
  • What will earn customer trust?

Once you feel confident about your answers to these questions, it’s time to move onto your business name. 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.

Once you have your name established, to finalize your brand, you will need a logo. To get a unique logo for your business use our Free Logo Generator. You can also try this premium logo maker by Tailor Brands. For something as important as your brand image it is always a good idea to source ideas from different places.

Promoting Your Business

There are many different methods to promote your business, but the two most effective methods are:

  1. Press Releases
  2. Facebook
Press Releases

Press Releases are a great way to promote your brand and are one of the most cost-effective strategies as they:

  • Provides publicity
  • Establish your brand on the web
  • Improve your website's SEO, driving more customers to your website
  • Are a one-time cost in terms of effort and money
  • Have long-lasting benefits
Recommended: TRUiC has negotiated a 25% discount for you on a service that will write and distribute press releases for you.

A Facebook page is a great, free way to interact with your customers. But, it does require ongoing effort to be successful.

A Facebook page can be used to:

  • Establish your local business presence
  • Showcase your business products and services
  • Communicate with your customers
  • Get and share reviews from customers
  • Promote your business through ads, though this may not be suitable for your business.

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’s 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

California Formation Guides

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


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.


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


2911 E. Barstow Ave.
Fresno, CA 93710

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Fresno Resources

Irvine Local Resources

Eureka Building

Here are the Principle Service Areas:

  • Business Planning
  • Coworking
  • Networking


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.


1621 Alton Pkwy.
Irvine, CA 92606

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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


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.




3333 Wilshire Blvd, Suite 405
Los Angeles, CA 90010

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Los Angeles Resources

Oakland Local Resources

Impact Hub Oakland

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Coworking


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.


2323 Broadway
Oakland, CA 94612

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Oakland Resources

Sacramento Local Resources

Hacker Lab

Here are the Principle Service Areas:

  • Business Planning
  • Coworking
  • Product Development


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. 


1715 I Street
Sacramento, CA 95811

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Sacramento Resources

San Diego Local Resources

Nest Cowork

Here are the Principle Service Areas:

  • Mentoring
  • Coworking


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).


1855 First Avenue, Suite 103
San Diego, CA 92101

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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


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


Here are the Principle Service Areas:

  • Business Planning
  • Coworking
  • Sales & Marketing
  • Networking


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. 


Must be a technology oriented business. 


99 Wilson Ave.
San Jose, CA 95126

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San Jose Resources

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