Did you know that over 99% of the total number of businesses in Ohio are small businesses?
That’s because this state has cheap rents and low taxes, making it perfect for startups.
If you have a strong business idea and think it can compete in the market, it’s time to learn how to start a business in Ohio.
In this article, you’ll find a step-by-step guide to help you start a business in Ohio and learn what to consider before doing so.
- How Profitable Is Owning a Business in Ohio?
- What You Will Need To Start a Business in Ohio [& Associated Costs]
- Why You Should Consider Starting a Business in Ohio as a Side Hustle
- How To Start a Business in Ohio in Six Simple Steps
- Things To Consider When Building a Business in Ohio
- INSPIRATION: Business in Ohio Ideas
- Frequently Asked Questions
- Similar Businesses To Consider Starting
- Wrapping Up
How Profitable Is Owning a Business in Ohio?
According to ZipRecruiter, small business owners in Ohio make about $96,000 per year, which equals a bit over $46 per hour.
Not only is Ohio known for its low taxes and cheap rents, but it’s also famous for having great talents.
Ohio has a business-friendly taxing system, making the process of filing taxes as a business owner not too intimidating.
Businesses in Ohio receive over $1 billion in venture capital investment per year, as reported by Bizjournals, which is why it earned the name “State of Startups.”
As for the economy over there, it’s thriving.
According to research, for every dollar invested in an Ohio startup, there’s an economic impact of $66.
Knowing that should encourage anybody to build a business in the Buckeye State.
What You Will Need To Start a Business in Ohio [& Associated Costs]
What you need to establish a business in Ohio depends on what the business is and how big you’re willing to start.
While some businesses are easy to start on your own and grow as you go, others require more staff in the beginning.
Sometimes you can work from home, and other times you may need a facility to establish your business.
Either way, there are some costs you need to know of, which include:
- Business Registering: Whether a sole proprietorship, corporation, limited liability (LLC), or general partnership company, filing initial forms costs $99 plus other fees.
- Business License: Starting from $25 for a vendor type, licenses can go up to $1,000 per year for other types. Each industry has special additional permits too.
- Insurance: For small businesses, simple commercial insurance costs an average of $42 per month for general liability, $45 per month for workers’ compensation, and $59 per month for professional liability/E&O.
- Facility: Depending on the office class, the average rent in Ohio costs between $15.26 and $22.65 per sq ft.
- Business Identity: Designing a logo and creating a business identity can cost as little as $100. Building a website and creating social media accounts cost a minimum of $200. However, if you choose to hire a web designer, you can pay up to $6000.
- Marketing: The amount of money you spend on marketing depends on whether you hire a marketing agency. As important as it is, you should choose wisely and not waste a lot of money.
Do I Need a License or Certificates To Start a Business in Ohio?
Yes, you do.
The most common type is the license to legally conduct your business issued by Ohio’s Secretary of State.
Other licensing and certificates vary depending on the type of your startup company and the services it offers.
Why You Should Consider Starting a Business in Ohio as a Side Hustle
Ohio is a major attraction for organizations looking for more profitability and growth.
Two cities in the Buckeye state have made it to the list of Forbes’s top ten rising cities for startups.
Starting a business in Ohio is a great opportunity, because of:
- Low Taxes: Offering a simplified taxing structure, Ohio has the lowest combined corporate tax rate in the country (21%).
- Community Support: The community in Ohio supports small businesses as long as they maintain excellent services. People of Ohio always tend to seek local companies before looking for one outside the state.
- Affordable Rent: Usnews has named Ohio the most affordable U.S. state in 2020. The state also ranks second for housing affordability and sixth for the cost of living.
- Thriving Tech Industry: Ohio has witnessed a noticeable rise in the technology industry. The state managed to get funding of over $75 million to tech startups for the years 2020–2022 through the Entrepreneurial Services Program.
How To Start a Business in Ohio in Six Simple Steps
With all the associated costs in mind, having a startup company requires following a few steps.
To help you with that, we’ve listed what you need to do to start a business in Ohio.
Step #1: Create a Business Plan
You need to create an idea for your business, keeping in mind the skills and resources you have.
Once you figure out what service you want to offer, it comes time for creating a business plan.
This plan helps you map out everything to know about your business, including:
- Goals and objectives
- Services you offer
- Costs for starting and running the business
- Target market
- Number of potential clients
- Expected profits
- Main competitors
Step #2: Decide the Business Name
Choosing a business name isn’t as simple as some people think.
You need a name that’s catchy, unique, and representative of what your company is all about.
You also need to search and check that the name isn’t already registered in Ohio.
Step #3: Register Your Business
This step is vital for protecting you from any potential future liability done by the business.
To do so, you should choose the right entity that best suits your business type.
The most popular type is the limited liability company (LLC).
However, it helps to know the definition of an LLC and its associated regulations before deciding.
Step #4: Get Licenses and Permits
The types of licenses and permits you need for your business depend on the nature of the service you’re offering.
Most businesses require a local municipality license to operate.
As for vendor or sales tax permits, they only apply if you’re selling taxable services or products.
You may need other local permits or federal licenses for specific industries.
It helps to check Ohio business gateway to know what licenses your business needs.
Step #5: Obtain Insurance
You should obtain business insurance to protect your company and personal assets from any liability resulting from unexpected disasters or accidents.
Explore your options and choose what best suits your business.
Step #6: Consider Getting Business Software
Paperwork aside, you should make sure you can run your business smoothly and keep track of its progress.
Thanks to modern technology, there are many tools and software that help you do many tasks, including the following:
- Project Management: PM software helps organize the business’s workflow, especially when managing several team members.
- Accounting: Whether working by yourself or in a large team, accounting software is useful. As a freelancer, QuickBooks Self-employed is an online software to help you manage and organize your accounting duties.
- Payroll: Many software are available to help make processing payrolls easier.
- Point of Sale: As a business selling a product or service, you need POS software to process customers’ transactions.
Things To Consider When Building a Business in Ohio
Although many advantages make the Buckeye State a great place for startups, there are also a few considerations to keep in mind, including:
Can You Run a Business in Ohio by Yourself?
Running a business by yourself is doable, especially when the service you’re offering doesn’t rely on the number of employees.
However, you should be aware of your business’s future growth and whether you’ll need help in the future.
Do You Know How To Choose a Business’s Legal Structure?
Choosing your business’s legal structure is crucial when registering it, as it can affect how the IRS taxes your profits.
You have several options for your legal business entity, but the best for small companies are two: sole proprietorships and limited liability companies (LLC).
It’s crucial to research the advantages and disadvantages of sole proprietor vs. LLC to help you make a decision.
Are You Aware of the Difficulties That Might Face Your Business?
As promising as starting a business in Ohio is, you can face a few hurdles along the way.
Unlike how it is in New York and other major states, businesses in Ohio have much less exposure.
This makes it hard for it to become popular right away.
Plus, the economic diversity in the state is limited, with only a few industries to rely on.
The labor market is also significantly tight.
INSPIRATION: Business in Ohio Ideas
A few industries in Ohio support small businesses better than others.
Take a look at four business ideas to consider starting in the Buckeye State.
Frequently Asked Questions
Is it easy to start a business in Ohio?
As long as you have all your papers ready and know what steps to follow, starting a business in Ohio shouldn’t be that hard.
How much is an LLC in Ohio?
All you need is to submit form 610, Articles of Organization for a Domestic Limited Liability Company.
Similar Businesses To Consider Starting
If you’re not currently living in Ohio or considering moving soon, you should consider other locations.
Here’s what you need to know to start a business in states such as Florida, Texas, or California.
- How To Start a Business in Florida : Florida offers many tax advantages as well as plenty of venture capitalists and angel investors to help with funding.
- How To Start a Business in Texas : Texas is one of the best states to start a business because of its low tax requirements.
- How To Start a Business in California : California has a thriving economy and large population, making it a perfect environment for business success.
Being the birthplace of the world’s greatest inventions, Ohio is a place for successful business opportunities.
Knowing how to start a business in Ohio is the first step of your development as an entrepreneur.
It’s also essential to maintain your business success through hard work and dedication.
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