Have a great idea for a startup but not sure where to start?
Starting your own business is an exciting adventure! Starting your business in South Carolina offers many business benefits. These include business tax credits and a fast-growing population.
Learning how to start a business in South Carolina can feel like an overwhelming process. There are many steps you’ll follow to ensure your business is legal and safe to operate.
By following this guide, you’ll learn how to safely and legally start your business off on the right foot.
How To Start a Business In South Carolina
The first step to starting any business type is having an idea of what kind of business you want to start. When starting a business, think about your natural abilities, interests, and personal interests.
Choosing a business idea that you’re passionate about will keep you motivated and make your business a success! A few ideas could be starting a clothing boutique, local marketing firm, or a cafe.
With your idea fresh in your mind, consider drafting a business plan. A business plan can show you your business’s profitability based on startup costs, strategies, and the competition. Starting your business plan now will help you when you start looking for investors.
Register a Business Name
Choosing a name for your business is the fun part. You’ll want to choose a name that’s different from other businesses already filed with the South Carolina Secretary of State (SOS). Research your business name ideas on the SOS website to find which ones are available.
General partnerships and sole proprietorships have the option of registering their name with a South Carolina DBA. Many banks will require you to register your business name before allowing you to open a bank account.
Corporations and LLCs will need unique names. Both need filing with South Carolina before they can open their doors.
To protect your business’s name and any slogans, you may want to consider a trademark. A trademark will legally protect your business’s name and prevent others from using it. You will need to contact or research the USPTO or US Patent and Trademark Office to find which names have trademarks and trademark yours.
Do you plan on creating a website for your business? Consider a business name that’s unique to use as the domain name.
What’s Your Business Structure?
Businesses come in many different structures and entities, including proprietorships, partnerships, LLCs (Limited Liability Company), corporations, and many more. Here’s a brief breakdown of the most common structures:
- Sole proprietorship: no state filing required to start a business, but the sole owner is responsible for every aspect of the business
- General partnerships: Two or more people doing business together who are responsible for the entire business; there’s also no state filing
- Corporation: business is separate from owners and offers liability protection to the owners
- LLC: easy to operate but offers liability protection to the owner and tax flexibility
You will need to further research the business structure options available before starting a company. Depending on your business, you may wish to have the liability side of it off your shoulders.
Request an EIN
An EIN is an Employer Identification Number issued to businesses by the IRS (Internal Revenue Service). The EIN is a 9-digit identification number used for a business’s for tax purposes, such as payroll taxes and tax returns.
Not all South Carolina businesses need an EIN. All sole proprietorships, LLCs, corporations, and partnerships with employees will need an EIN.
LLCs and sole proprietorships with only one member and no employees do not need an EIN. The owner’s social security number can also work as the business’s tax identity.
Filing for an EIN is quick and easy. You can file online through the IRS website and receive your EIN immediately. If you prefer the old-fashioned way, you can request an EIN via mail or fax.
Find Funding
Many businesses will require some form of funding before opening their doors. You’ll need a business plan detailing your business idea’s startup costs and profitability before requesting funding. A few funding options include:
- Bootstrapping: funding the business from your personal accounts
- Friends and Family: potential lenders to assist with your business adventure but make sure to write a written agreement
- Small Business Grants: industry-specific grants for your business you don’t need to pay back
- Small Business Loan: offered by banks and other money lenders, these are loans you will need to pay back but offer a great source of capital
- Crowdfunding: funding coming from a variety of people and investors
- Venture Capital Firms: Investors looking for fast ROI (return on investment), best for businesses expecting a rapid amount of growth
- Angel Investors: Investors looking for ROI but more willing to invest in riskier businesses
Having more details regarding your business plan and idea will make finding funding easier. Most banks, investors, and others don’t want to invest in a business with little potential to offer an ROI.
Apply For Business Licenses, Permits, and Insurance
The type of business you have will dictate what licenses and permits you will need to open your business in South Carolina legally. Check the federal, state, and local requirements to make your business legally compliant.
Business insurance is necessary to protect both you and your business. Insurance options to consider include General Liability, Professional Liability, and Workers’ Compensation Insurance. You will need to determine which insurance type is best for your business.
Set Up Accounting
Almost every type of business should open a separate bank account and request a separate credit card. This will keep the finances of your business separate from your own finances. If you’re not fluent in business accounting and bookkeeping, consider working with a business accounting service.
What’s Your Business Idea?
What’s more exciting than turning your business idea into a reality?
Learning how to start a business in South Carolina is fun and exciting. By following this guide, you’ll start your South Carolina small business on the right foot.
Have questions or need help with the legal side of your South Carolina business? Send us a message. Our attorneys are happy to help you with any legal questions and concerns you have with your new business.
