But Idaho is so much more than just potatoes. Locals may not want everyone to know about its snow-capped mountain ranges, network of excellent whitewater rivers, world-class rock-climbing and backcountry skiing, and vast expanses of gorgeous desert.
Idaho has made starting and operating a business as beneficial and easy as possible. In fact, Idaho has exempted more than 90% of all businesses in the state from personal property taxes and has some of the lowest corporate taxes in the country. Starting a business requires a number of steps to make sure you’re protecting both yourself and your business as you grow.
Benefits of Opening a Business in Idaho
Idaho is an attractive state to start a business in because of its beneficial regulatory environment, lower than average tax situation, and strong state economics. There are a number of tax credits available to businesses for hiring employees, purchasing equipment, and more. These are just some of the reasons Idaho — and Boise in particular — is one of the best places to start a business in the country.
Idaho also boasts low startup costs. The state maintains a low minimum wage for businesses that need to hire employees, and a low median rental rate for residents. This makes it affordable to get your business off the ground. On top of it all, Idaho is a fairly easy place to check off all the legal requirements for your new business.
Start an Entity in Idaho
ZenBusiness offers the following formation services to our customers:
- Idaho Limited Liability Company (LLC)
- Idaho Professional Limited Liability Company
- Idaho Corporation
- Idaho Nonprofit Corporation
How to Start a Business in Idaho
Starting a business in Idaho can be as easy as following the list of steps below. We’ve compiled all the regulatory requirements in the state, plus the most important things to consider before launch day:
How to Start a Business in Idaho Checklist
- Create a business plan
- Choose a business structure
- Determine your business costs
- Create a business name
- Register your Idaho business and open financial accounts
- Market your Idaho business
1: Create a business plan
Before you start selling your product or services, it’s essential to first make sure your business idea has a chance to be successful. Creating a business plan that outlines the potential market, target customers, and how you’ll launch can help you stay prepared. Plus, it will help you identify and manage potential problems that could threaten your success.
Let’s take a look at some of the things that can be included in your business plan:
- Set “SMART” goals and objectives for the first year of business.
- Identify potential problems and provide solutions to prepare for operation.
- Find your target customer: Are they tech-savvy individuals in Boise or farmers in Moscow?
- Create financial projections, including business costs, for your first three years of operation.
- Craft your sales and marketing plan.
The State of Idaho’s commerce division hosts an extensive resource on starting a business that includes more information on business plans.
2: Choose a business structure
Small businesses in Idaho choose a business structure that makes sense for their industry, personal finances, and the size of the business opportunity. The most popular types of business entities are sole proprietorships and limited liability companies (LLC). Each has its own benefits, with the biggest difference being liability protection.
A sole proprietorship is easy to start, with no legal documents in the state of Idaho. However, this business type gives the owner all of the legal liability for anything that happens to the business. If the business gets sued, then the owner’s personal assets are involved, too.
An LLC is often chosen by small business owners because it gives you the tax benefits of a sole proprietorship, plus the legal liability protection of a corporation. LLCs are both easy to register and maintain in Idaho. Idaho also offers a business resource wizard to walk you through operational specifics that are unique to you.
3: Determine your business costs
As part of your business plan, it’s important to figure out exactly what you need financially to both launch your business and operate it on a monthly basis. Calculating these costs will help you bring your dream company into reality.
Your startup expenses are typically one-time costs. You can factor them into the amount of money you need to get your business off the ground. However, you likely won’t get customers or sales on day one. That means you’ll need to figure out how much it would cost to operate for 6 to 12 months. Assuming zero income during that time period will give your new company the financial breathing room to succeed.
Some of the costs you can include in your calculations include:
- Real estate or rent costs
- Cost to hire employees, if necessary
- Marketing materials
- Office supplies
- Cost to register your business
For more information, check out this resource on how to calculate business costs for startups.
4: Create a business name
Finding the right business name is one of the most creative and fun parts of starting a business. Many choose a name that resonates with their target customers. Others decide to pick names that mean something to them personally. Regardless of your decision, the name must be the only one of its kind in the state of Idaho. You may also want to reserve your name with the Idaho Secretary of State until you’re ready to file your business formation paperwork. Reserving the name costs $20 online.
When picking your business name, it’s smart to establish an online presence, too, by securing a domain name. Even if your business name is available in Idaho, it could be taken by another business in a different state. If that company has a website with a domain name similar to your desired name, it could be tougher for you to operate online.
If you’ll do business under company names other than your business’s legal name for branding purposes, then you’ll also need to register a DBA.
5: Register your Idaho business and open financial accounts
Before registering your business with the Idaho Secretary of State, you can use Idaho.gov’s business wizard to learn which regulations apply to you. Once you’re up to speed, consider partnering with ZenBusiness to form quickly and easily, in a way that meets your specific needs.
If you’re starting an LLC or corporation, you’ll likely need to obtain a federal employer identification number (EIN) from the IRS. This is your federal tax ID, and you’ll also use it when hiring employees. When all that’s done, you can open a business bank account and consider which types of business insurance you may need. Most small businesses start with general liability insurance and branch out from there based on the type of work they do.
6: Market your Idaho business
Now that you can legally do business in Idaho, you’ll want to help your customers find you. Creating a marketing plan specific to your target customer is vital to growing your sales. Some strategies include building out web content and improving your search engine optimization (SEO), or finding the right print advertisements to distribute to potential customers.
Most businesses will want a well-established social media presence on sites like LinkedIn or Facebook. Not only will this help your SEO, but it will help build a community of potential customers. To know what’s right for your business, you can first do some market research and then create a plan. You can learn more from the Idaho Small Business Development Center’s marketing resources.
Examples of Good Businesses to Start in Idaho
Idaho is well positioned to export goods or sell services to both the Pacific Northwest and the Mountain West regions of the country. Businesses that do well in Idaho typically either take advantage of the state’s natural resources or benefit from its central location. Below are some examples of good businesses to start in Idaho.
- Home health
- Staffing or employment agency
- Trucking/transporting farmed goods
- Back office services, such as IT
- Financial services
- Retail stores
- Mining or quarrying
- Food services
You’ll have the most chance for success by considering businesses that play to your strengths. You can check out the Small Business Administration’s Idaho profile to see how many companies are in each industry within the state.
Idaho is a strong place to start a business if you understand how to get it off the ground. It’s important to find the right business type for you, and completely plan out how you could be successful first. Following our checklist will help you start your company on the right foot, and help you avoid costly mistakes.
Idaho Business FAQs
How much does it cost to start a business in Idaho?
The total cost of starting a business in Idaho varies by industry and even business type. However, you can register your Idaho LLC for the state filing fee of $100 online.
Do I need a state business license in Idaho?
No, Idaho does not have a state business license requirement. You could have other licensing requirements depending on what you’re selling or whether you hire employees.
What is a good city to start a business in Idaho?
The right city in Idaho for your business will depend on your industry and where your customers are. Boise, Idaho Falls, and the northern vacation spot of Coeur d’Alene are great places to get started.