Steps to Start a Business
Assessing Your Potential as an Entrepreneur
Is business ownership right for you?
Learn more about the steps involved in starting and running a business and take a quick self-assessment to determine if entrepreneurship is right for you, right now.
- Access the tools available at the US Small Business Administration that will help you determine if business ownership is right for you.
- Take a free self-assessment or attend a Smart Start – Entrepreneur 101 class offered by the Maryland Small Business Development Center.
- Attend the ABC’s of Starting a Business, a monthly workshop offered for men and women through the Maryland Women’s Business Center.
- Consider attending How to Start a Business workshop through the local chapter of Service Corp of Retired Executives (SCORE).
Researching Your Idea And Planning for Success
A good business plan is the foundation for a successful business and there is plenty of help to get you started.
Plan Your Location
Regardless of your business model, you will have to work somewhere. This might be at home, in shared office space, in a rented office or in a buidling you purchase. Carefully consider the impacts of each of these decisions to find the one that is right for you.
Research County requirements for basing a business in your home. Home Occupation guidelines are available from the Montgomery County Department of Permitting Services.
If you determine renting space is the best option for your business, be sure that the location you are considering is zoned for your type of business, that there is a current Use & Occupancy Certificate for the location and that reflects your intended use. If you plan to alter the space you plan to lease, you may also need to obtain a commercial building permit.
Many of the same considerations apply if you plan to purchase space for your business. in addition to zoning and use considerations, plan on obtaining a building permit to construct or renovate a property. Be sure to contract with vendors that have experience building or renovating in Montgomery County and understand the process here.
Altering or building new construction are complex endeavors and the Department of Permitting Services offers a preliminary design consultation to help you make the best decisions from the start.
Selecting your Legal Business Structure
Determine which form of business structure is most appropriate for your operation.
There are several types of business structure to choose from: Sole Proprietorship, General Partnership, Corporation, Limited Liability Company (LLC), Limited Partnership, Limited Liability Partnership, Benefit Corporation, Non-Profit, etc.
Each structure has certain advantages and disadvantages and ultimately the decision is yours.
In order to ensure you have all of the information you need to make this decision, consider consulting with an accountant and attorney and a business consultant.
Montgomery County businesses have access to technical assistance from organizations such as SCORE and the Maryland Small Business Development Center. In addition to helping you determine the best structure for your business, these resource partners can help you answer important questions such as what insurance you should consider or may be required to protect your business interests and employees.
The Small Business Administration offers an overview of the different types of business structures to help you determine which is best for you. The SBA web site also provides valuable information regarding business insurance.
Registering the Name of Your Business
Several steps are involved with naming a business.
These steps include checking to be sure the name is available; researching whether a meaningful domain name can be selected; completing proper registrations, and considering if a trademark is appropriate.
Before selecting and reserving the name for your business, research whether and how your name is already in use:
- Dun & Bradstreet – more than 20 million business records available.
- Google – search to see if another business is already using the name.
- Maryland Business Express – Do a business entity search to see if the name of your business is already being used in Maryland. Your name must be unique – it cannot already be in use by another business.
Most businesses today have a web site so you should check to see what domain names would be available based on your company name:
Register the trade name of your business through Maryland Business Express.
While not required, you may want to research and consider obtaining a trademark on your name from the U.S. Patent and Trademark Office.
Filing Articles of Incorporation with the State of Maryland
Different types of business structures are subject to different filing requirements and fees.
Visit Maryland Business Express to register your business and file corporate documentation as appropriate.
- Sole Proprietor or General Partnership: No legal document filings or other formalities are required, except compliance with State and local licensing and taxation requirements. Companies that are sole proprietorships and general partnerships should visit Maryland Business Express to apply for a Tax ID Number.
- Other types of corporations including Limited Liability Companies, Stock Corporations, Tax Exempt Nonstock Corporations, Close Corporations and Foreign Limited Liabilty and Corporations should register and file documents through the Maryland Business Express.
- Other business types may also register trade names and establish tax accounts through Maryland Business Express. For business filing types not currently accepted online, please visit the Department of Assessments and Taxation website for assistance.
Maryland Business Express also posts the schedule of filing fees associated with different types of businesses.
Obtaining a Federal Employer Identification Number
This is very quick and easy to do and is available online from the IRS.
You need an EIN if you:
- Start a new business
- Have employees
- Operate your business as a corporation or a partnership
- File any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms
- Withhold taxes on income, other than wages, paid to a non-resident alien
- Have a Keogh plan
- Are involved with any of the following types of organizations
- Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers' cooperatives
- Plan administrators
Before you get started, review the information on How to Apply for an EIN from the IRS.
Registering for tax accounts with Maryland
Filing and paying business taxes can be complicated.
The Maryland Comptroller's Office offers convenient online services to help new businesses set up tax accounts, obtain the right business licenses, and learn about available tax credits.
Complete the Maryland Combined Registration Form to establish your tax accounts, which may include:
- Admissions and amusement tax account
- Income tax withholding account
- Sales and use tax license
- Tire recycling fee
- Transient vendor license
- Unemployment insurance account
You need to download the paper version to apply for the following:
- Alcohol tax license
- Tobacco tax license
- Motor fuel tax account
Personal Property Taxes
In Maryland all businesses are taxed on business-owned personal property such as furniture, fixtures, office and industrial equipment, machinery, tools, supplies, inventory and any other property not classified as real property. You must file a Business Personal Property Return every year, on April 15, regardless of whether you have property. The minimum fee to file the return is $300 per year. Businesses are automatically registered when they are formed and file articles of organization/incorporation with the State. You will receive a personal property tax bill after the return is reviewed by the State of Maryland.
Sole Proprietorships or General Partnerships
Licenses and Permits
It is the responsibility of any business owner to learn what government oversight applies to their specific type of business. The Montgomery County Business Portal includes extensive information on Licenses & Permits and Regulations & Laws that are applicable to businesses operating in the County.
Contact us with questions or to obtain additional information.
The assistance of a business attorney and accountant also can be helpful in determining local requirements.
ABC’s of Starting a Business
Monthly workshops available
Maryland Women’s Business Center
Training, counseling and many free resources for men and women
A nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship. Resources to encourage minority, female and disabled business owners to find business success in MoCo.