How to Start a Business in Tennessee

With the 8th lowest tax burden in the country, Tennessee is a great place to launch your business. 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 Tennessee, 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 Tennessee 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

Step 3: Form your Business


Registering your company as an Tennessee 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 Tennessee for $350.

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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After registering a domain name, consider setting up a professional email account (@yourcompany.com). 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 tennessee taxes that may apply to you business:

  • If you are selling a physical product, you’ll typically need to register for Tennessee Sales Tax.
  • If you hire employees in Tennessee, you will have to register for Unemployment Insurance Tax on behalf of your employees. 
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Register for Tennessee State Taxes

Sales Tax | Unemployment Insurance 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 Tennessee, businesses with five or more employees, including LLC members and corporate officers, 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

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Get Help From Local Resources

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

Select your Region

Chattanooga Local Resources

LAUNCH Chattanooga

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Financial
  • Sales & Marketing

Description

LAUNCH Chattanooga is a hyper-inclusive entrepreneurial instruction organization. They assist entrepreneurs by coaching them through their 10-week Business Entrepreneurship Academy class. The BEA Class is a 10-week program that assists budding businesspeople in the process of validating a business idea, planning a business, attracting customers, planning finances, marketing, branding, and more. At the end of the program, graduates will work with a business coach, and if they would like, can also partner with a business mentor. LAUNCH also hosts monthly roundtable sessions, which entrepreneurs may use to network and gain access to free or discounted business resources through LAUNCH's business partners.

Restrictions

Entrepreneurs must have a business idea in place.

CONTACT INFORMATION:

302 West 6th St.
Chattanooga, TN 37402
423-523-9307
info@launchchattanooga.org

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Chattanooga Resources

Knoxville Local Resources

Knoxville Entrepreneur Center

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Sales & Marketing
  • Networking

Description

The Knoxville Entrepreneur Center is a premier resource in the Knoxville area. It has 7 programs available for adults, and 1 program for youth entrepreneurs. All programs begin with the Liftoff event, which is a meeting that occurs several times throughout the month. After that, comes all the other benefit programs, like the CO.STARTERS program, "What's the Big Idea?" Pitch competition, and 'The Works" for technology-oriented companies.

CONTACT INFORMATION:

17 Market Square, Suite 101
Knoxville, TN 37902
865-282-4322

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Knoxville Resources

Memphis Local Resources

Southwest Tennessee Community College SBDC

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Financial

Offers Free Service

Description

The greatest strength of the SBDC is their free, confidential, 1-on-1 business mentoring for anyone who seeks it. Sometimes in order to be considered for mentoring from one of their professional business advisors, you may have to attend a class/workshop or at least present your business plan. SBDC's are located all throughout the state and you should use the SBDC closest to your location if possible, but you can often transfer to a different location if they do not fit your needs.

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Memphis Resources

Nashville Local Resources

Nashville Entrepreneur Center

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Coworking

Description

The Nashville Entrepreneur Center is a nonprofit specializing in an extensive mentorship program, coworking space, incubation services, and music and healthcare accelerators. The NEC is very high quality, but its programs can also be expensive. As such, the NEC is best for entrepreneurs who are not on a tight budget and want a comprehensive service to assist them with starting their business. 

Restrictions

Accelerator programs are by application process only and require specific industry focuses specific to each program.

CONTACT INFORMATION:

41 Peabody St.
Nashville, TN 37210
615-873-1257

HOURS OF OPERATION:

MON - THU: 8 am - 5 pm

FRI: 8 am - 4 pm

 

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Nashville Resources