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Utah is one of the fastest growing places to start a business in the United States – it is the fourth fastest growing state and was selected as the best economy in the country in 2022 by US News and World Report. On top of that, the capital, Salt Lake City, is the fifth fastest growing city in the country. Companies like Overstock.com and Extra Space Storage were founded in the Beehive State, but it’s also home to subsidiaries including Adobe and Goldman Sachs. Here is our eight step guide to starting a business in Utah.
- Choose a business idea
The first task for small business owners in Utah is to create an idea for your business. Will you be selling products, services, or a combination of the two? Either way, there are two main questions you should ask yourself:
- Who is your customer? Identify your target customers: who are they, how do they live, and what needs or wants are they trying to fulfill? Will you be selling directly to consumers (B2C) or business to business (B2B)? Should you shop online, through a physical store, or both? To answer these questions, interview potential customers, conduct market research, and study industry trends.
- What is the value of your forecast? The key to business survival is profitability, that is, making more money than you spend on business expenses. There are many variables to consider when creating your profit plan, such as price, distribution, and overhead. How much do you have to sell to break even and generate a healthy profit margin?
- Name your business
Once you’ve decided on an idea, it’s time to decide on a name for your business. Try to choose a name that is simple, memorable and clearly reflects the mission and values of your business. At the same time, you need to follow some state-level rules. Here are some guidelines to follow when choosing a business name in Utah:
- Be the first. Your Utah business name must be unique from any business entity already registered in the state. You can check if the name you want is available by searching the Utah Division of Corporations and Commercial Code website.
- Add some words. Depending on the legal business registration process for your Utah business, you may need to include certain words in the name. LLC, for example, must have the words “Limited Liability Company”, “Limited Liability Company”, “L.L.C.” or “L.C.” Your Utah corporation must include the words “Corporation”, “Incorporated”, “Company” or an approved version of these three.
- Remove some words. Your Utah business name must not include words such as “College”, “Institute”, “University” or “Institution”, or words that suggest the business is a bank, credit union, trust company confidence or trust without proper support.
- Keep your name. To register your business name in Utah, you can submit a business name reservation request online or by mail and pay a $22 processing fee.
- Get a DBA. If you want to operate your business in Utah under a name that is not registered for the state, you can apply for a DBA, or “doing business as.” You can apply for a DBA online or in person at a Utah Department of Commerce office and pay a $22 filing fee.
- Secure your domain name and social media credentials. Businesses in Utah and elsewhere will need to maintain an online presence to stay competitive. Buy a domain name (URL) and choose a social media username that matches your business name or your database administrator. This way customers can find you on the web.
- Create a business plan
A business plan outlines your business goals, how it will generate revenue, and how it will operate. A detailed business plan defines your business activities, outlines your market analysis, outlines a feasible organizational chart, defines your product and/or service line, and defines your target customer and marketing profile. which is targeted, describes the marketing process. Your business plan should reflect your overall business goals and give an idea of how you want it to operate both in the short term and in the future.
You can write your business plan from scratch, use a template designed to fit your Utah business needs, or view real examples and ideas.
- Choose a business plan and get started
There are many business models to choose from when starting your business in Utah. Each type offers several advantages and disadvantages:
A sole proprietorship is the default title for anyone doing business as a person in Utah. There are no special fees or registrations required to set up a sole proprietorship in Utah, and the sole proprietorship’s income is taxed at the rate. The disadvantage of operating as a sole proprietor is that the owner will personally pay for most of the debts and violations caused by the business, since the sole proprietorship is not a legal entity. the owner.
Limited Liability Company (LLC)
A limited liability company, or LLC, differs from a sole proprietorship in that it can have many owners, called “members”. An LLC is classified as an entity, so members pay taxes based on their individual income levels. However, unlike sole proprietorships, LLCs are separate legal entities, so creditors and potential lawsuits cannot access the members’ assets. There is no franchise tax for LLCs in Utah, but they are required to file an annual report, which comes with a $15 filing fee.
The primary benefit of starting your Utah business as a corporation is the opportunity to raise funds. A company can issue shares to shareholders, each of whom pays for the business. They also get the same liability protection that an LLC has. Utah corporations are subject to a 5% corporate income tax and, like LLCs, must file an annual return, for a $15 filing fee.
Get a Federal Employer Identification Number (EIN)
Once you’ve chosen a legal system for your business in Utah, you’ll need a Federal Employer Identification Number, or EIN. EINs are issued by the Internal Revenue Service (IRS). Authorities use them to identify businesses and conduct state and federal tax audits. You can through the IRS website, for free.
Incorporation in Utah
The process for registering your business in Utah is different depending on the type of business you choose. Owners do not require a special registration process, but LLCs and corporations:
Company LLC. To register your LLC in Utah, you must file a Certificate of Formation in person, by mail or online, and you must pay a $54 filing fee.
Company. To register your business in Utah, you must file an application in person, by mail, or online, and pay a $54 processing fee.
- Obtain business licenses and permits
All businesses in Utah must have a business license for the city or county in which they operate, but no statewide business license is required. Contact your local or regional authorities to find out how to apply. If you are a seller selling goods or services that will be subject to Utah sales tax, you must obtain a seller’s permit from the Sales and Use Tax Commission. If you sell certain prohibited products, such as alcohol or tobacco, or if you work in health, law, construction or other regulated industries, you must have proper license.
- Explore business insurance options
Purchasing insurance for your business in Utah is key to risk management and has the added benefit of freeing up your mind to focus on day-to-day business matters. Utah requires workers’ compensation insurance for all businesses operating in the state and commercial vehicle insurance for any business that operates vehicles for commercial use, such as tractor-trailers, delivery trucks, or recovery trucks. . Other insurance plans for Utah businesses include:
- General liability insurance. A general liability policy protects your business from lawsuits that may result from an unexpected accident, for example, a customer falling in the workshop. professional indemnity insurance.
- Professional liability insurance is intended for professional services companies that must have a high level of competence, such as law firms or accounting firms. This policy often protects them from criminal charges.
- business insurance. If your Utah business cannot operate for a period of time due to a covered loss, Business Income Insurance can replace some or all of the income you may lose during that time.
- Understand financial matters
There are various other expenses that you will need to make to start your business in Utah. They can include paying for rent in a physical store, paying for a well-designed website, or buying merchandise. In addition to paying employees, you can hire some contractors to support business activities, such as lawyers, designers and accountants. There are also subsidies to help entrepreneurs cover these costs. Other options for supporting your new business include:
- Money from friends and family. You can get money through loans or other forms of investment from friends and family. Make sure you take the time to explain how you will repay them, keep the payment system in place, and work to maintain your personal relationship outside of your business.
- Outside investors. Any investor can be interested in helping your business at any stage, while raising money from a financial institution usually means that professional investors will look at your business after it is established. him. way to make a profit. These types of investors often require shares or shares of ownership in exchange for their investment, which means your business must be organized as a C corporation to issue these shares.
- Loans. Other types of financing can come from microloans, commercial bank loans, and loans approved by the Small Business Administration (SBA).
- Market your business
Getting your Utah business legally registered and well organized is a good start, but then you need to develop a marketing plan to promote your products and/or services. Start by creating a brand, choose logos, slogans, color schemes, fonts and marketing language, before using it as the basis of your complete marketing plan. A good marketing plan should cover the following strategies for attracting and selling customers:
- Paid advertising and promotion. Paid advertising is one of the most traditional and reliable methods of marketing. Ads can be print or digital, as big as a billboard or as small as a branded company app or Facebook ad. You can design and pay to install them yourself, or hire a company to build them on your behalf.
- Social media accounts. Use social networks like Instagram, Facebook, YouTube or TikTok to promote your products and services and make it easy for customers to find information about your brand.
- Public relations. Find out and reach out to Utah media, and possibly national media, to expand your reach. Cultivate relationships with individual journalists and all publications can help raise your profile.
- New business and customer retention. Work on building relationships with your customers to keep them coming back, and even spread the word to friends, family and colleagues.