What Every Small Business in Florida Should Know

Florida is one of the most attractive places to start a business. According to the Tax Foundation, it has the fourth most tax-friendly regulations in the country. From a business-friendly regulatory environment to world class infrastructure and a highly skilled workforce, there is much to like about Florida. Operating from Florida can be the secret ingredient that propels a company to grow in today’s hyper-competitive market. Added to that, the quality of life and the great climate makes it a wonderful place to live. It’s not surprising that so many global companies choose to operate in Florida. In this article, I will go through what every small business in Florida should know, so that you can make a success of your time in the great state. 

Develop a Business Idea

In order for a business to earn revenue and have a chance to be profitable, it must offer compelling value to its potential and existing customers. Indeed, no less an authority than the managerial legend, Peter Drucker, said that the purpose of a business is to attract and keep customers. The value you offer is your business idea, how it is executed and how the customer experiences it. If you do not have a business idea, you do not have a business. You have to have something that compels people to become your customers and to continue being your customers. 

It’s important to realize that you can attract customers without making a profit. Ultimately, a business has to make profits for its shareholders, in order for it to make economic sense. This means that your business must possess competitive advantages that allow it to raise prices above its costs, without fear of customers leaving the business. For instance, Google was able to leverage its success with its PageRank algorithm and build the world’s best search engine. That search engine is now so synonymous with search that Google has become a verb. Your business idea must be such that your customers are bound to you in some way. Competition is anathema to the earning of profits. You will have to do a lot of research, looking at the capital requirements, the competitive landscape, the average returns on invested capital (ROIC), revenue growth rate and gross profitability of any existing competitors, and the market opportunity. 

Choose a Business Structure

Every business is organized around some business structure. Your decision to choose this or that business structure, carries with it certain tax and legal implications. The most common types of business structure are the corporation, S corporation and sole proprietorship. The other common type of business structure, the limited liability company (LLC), is permitted under state statute. If you want to learn more about business structures, visit the Small Business Administration’s (SBA) Choose a Business Structure webpage.

Form the Business

In order to form your business, you will need to file articles of incorporation or organization. Corporations, whether they are for-profit or non-profit, have to file articles of incorporation with the Florida Secretary of State. For-profits and nonprofits file different articles of incorporation. If your business is an LLC, then you have to file articles of organization with the Florida Secretary of State. 

Get a Business Name

If your business is a sole proprietorship, and you are using your najme to do business, for example, if your name is Mary Poppins and you do business as Mary Poppins, then you do not need to register a business name. However, if you do business under a fictitious name, such as Mary Poppins Accounting, then you need to register a business name with the Florida Secretary of State’s Division of Corporations. 

Corporations, and LLCs also register their business names with the Division of Corporations. They need to check with the state to ensure that the business name they want to use hasn’t already been taken. You can perform a business entity search online. You can apply to reserve a business name for 120 days. 

If your business will have a website, then you will also have to get a domain name. 

For purposes of protecting your trademark, you have to register with the U.S. Patent and Trademark Office to get exclusive rights to your trademark. Before registering, you have to do a trademark search to check if another business has not already registered that trademark. 

Apply for Permits and Licences

Your business needs to obtain an employer identification number (EIN) so that the federal government can identify it for tax purposes. You apply for an EIN from the Internal Revenue Service (IRS). Even if your business is not required to have an EIN, it can be very useful. Banks will often only open business accounts for clients who have EINs. Some companies may require an EIN so they can process payments. 

If your business will sell products in Florida, then you have to register with the Florida Department of Revenue. This will allow the state to collect taxes from your business. The department will give you a Form DR-1 which you have to fill out before you can get a business tax licence. 

If your business will be engaged in buying products for resale, that business does not pay sales tax on those products. The liability is passed to the retailer, who charges sales tax to the end-user. When you get a sales tax permit, you will also receive a Florida Annual Resale Certificate for Sales Tax or Form DR-13. It is also known as a sales tax exemption certificate. This permits your business to buy or rent goods or services without having to pay sales tax so long as those goods or services are resold. 

Certain industries require a business licence from the state. The Department of Business & Professional Regulation oversees business licences for everything from architects to auctioneers. The Department of Agriculture and Consumer Services licences everything from pawn shops to private investigators. Though these are the main licencing agencies in the state, there are others. You can also check with Florida’s state agency directory for information about other agencies. 

A lot of people find this process complicated. You can work with an agency like Cindy’s Florida LLC, who will guide you through this process as you begin your journey of entrepreneurship.