How to Start a Business in New Hampshire

New Hampshire attracts residents with its quality of life, ranking high on things like health, education, and low crime. But there are additional draws for any prospective new business owner wanting to establish their business in the Granite State.

The following steps can guide you through the process of starting your dream business in New Hampshire.

Step 1: Create a business plan for your New Hampshire company

Planning is an important part of any big venture, especially starting a company. Writing a business plan is vital. Not only can it help attract investors or secure a loan, but it keeps you on track with your vision, goals, and finances. When you’re writing a business plan, consider the following steps:

  • Outline your “SMART” goals.
  • Understand your service or product line and pricing.
  • Run a market analysis: If there’s no market need, your business is probably going to have problems. Also, understanding your ideal customer will help you better serve them.
  • Create a competitive analysis: What are your competitors doing and how are you going to do it differently and/or better?
  • Make a financial outline: What’s your main revenue source, what are your operating costs, and when do you expect to be profitable?
  • Look for tax breaks, grants, and other government resources.

Need help creating a business plan for your New Hampshire business? We put together a comprehensive library of articles and guides on business planning.

Step 2: Choose a business structure

One of your first considerations for your new company will be choosing its business structure. Some of the most well-known business entity types are corporation, general partnership, LLC, and sole proprietorship. Let’s take a quick look at the pros and cons of each type.

Corporations

Corporations are one business structure option. They shield their owners’ (called “shareholders”) personal assets from liability, so if the business gets into trouble, the shareholders’ personal savings accounts can stay safe. However, income for C corporations is taxed twice — once at the level of the corporation and again on the personal tax returns of its shareholders. This is referred to as “double taxation.”

S corporations offer similar liability protection but avoid the double taxation issue. Their income is only taxed one time, on the shareholders’ personal tax returns. S corporations come with more restrictions and are harder to qualify for, though.

LLCs

LLCs, general partnerships, and sole proprietorships are among the most popular business structures because they’re considered “pass-through” entities, meaning their profits are reported only on the owners’ personal income tax returns without first being taxed at the business level.

Though the tax benefits make them similar, they’re definitely not the same. LLC owners enjoy liability protection on their owners’ personal assets, which is important in the event of a lawsuit or bankruptcy. This personal asset protection occurs because the LLC structure separates your personal assets and liabilities from those of your business. LLCs must file a Certificate of Formation with the state of New Hampshire, while sole proprietorships do not.

Sole Proprietorships

Sole proprietorships and general partnerships are the cheapest types of entities with the least amount of paperwork. They don’t have to craft an operating agreement or create bylaws. They also avoid having to file formation documents with the state. Unfortunately, these structures don’t offer any liability protection on personal assets. That means if your company gets into financial trouble, you do, too.

Because it combines liability protection and tax benefits, the New Hampshire LLC is a very popular form of business entity for many new entrepreneurs. We can file the paperwork to form an LLC or corporation for you with our business formation plans.

Still not sure what business structure to choose for your business in NH? Get 100% certain by reading our business structures page.

Step 3: Determine startup costs for your business

From startup costs to ongoing fixed and variable expenses, your organization will need to cover its costs. As part of your planning, the better you can estimate those costs, the better positioned you can be to get the right financing, set up your budget, and stay on track with managing cash flow.

Every startup’s costs are different, but some of the most common ones include:

  • Entity filing fees and New Hampshire annual reports
  • Licenses, permits, and zoning
  • Leasing or purchasing office space
  • Designing and printing business cards, postcards, brochures, or other print marketing materials
  • Office supplies and furniture
  • Technical equipment: smartphones, tablets, point-of-sale devices, and/or computers
  • Bookkeeping and accounting
  • Travel and transportation
  • Developing, designing, hosting, and updating a company website

Does math overwhelm you? That is okay! We’ll walk you through business cost calculation in this guide.

Business insurance is another important consideration. From commercial general liability to workers’ compensation insurance, remember that different companies need different kinds of coverage. 

Step 4: Name your New Hampshire business

Whether you’re using your own first and last name, location, services, or branding message, there’s no one way to name your company.

Business Name Search

By law, your new company can’t adopt a name already in use. To ensure your business name choice isn’t already in use by another organization in the state, do a name search on the New Hampshire Secretary of State website.

We walk you through the search process on our New Hampshire business entity search page. This will help prevent legal issues, confusion among customers, and wasted time and money.

Business Name Reservation

New Hampshire also gives business owners the ability to reserve a name for 120 days before filing the paperwork to start an entity like an LLC or corporation. This isn’t required, but it can keep another company from taking your desired name before you can file the paperwork for an entity like an LLC or corporation.

Domain Name

Once you’ve identified an available name that represents your brand, check for available domain names that you can use for your email and website. Our domain name registration service can help you secure the online name that will best serve your business. 

This is also a good time to reserve accounts or handles on social networks that may be part of your marketing outreach and engagement.

Step 5: Register your business in New Hampshire

If you’re starting an LLC or corporation, you’ll need to complete the New Hampshire business registration process by filing formation documents with the state. This involves filing a Certificate of Formation (for LLCs) and Articles of Incorporation (for corporations).

Once you’ve chosen your business structure and (if required for your entity type) filed the formation paperwork with the New Hampshire Secretary of State, you can apply for a federal employer identification number (EIN) with the IRS.

Open a business bank account

This number is also known as a federal employer identification number, or FEIN. Having this tax ID number will allow you to open a business bank account.

Note: A business bank account will enable you to separate your personal and business expenses into personal and business accounts.

Banking Resolution

You can do this yourself or have a partner do it by creating a special document called a banking resolution. Dedicated business bank accounts will keep the company’s finances separate from the personal funds of you and the other owners. This not only helps you at tax time, but it can help protect your limited liability status if you have an entity like an LLC or corporation.

Licenses and Permits

You’ll need to figure out what permits and/or licenses the law requires for your business to operate. Permits and licenses vary by industry, and they can be needed at the federal, state, and local levels.

There’s no central authority to tell you every license and permit your business requires, so you’ll have to do some research or have someone like us do the research for you with a business license report.

Step 6: Market your business

Marketing your business makes potential customers aware of your services and products. It’s your way to make the case for why someone should choose you over the competition. Start by making a solid marketing plan.

Website

Having a website is essential for most businesses, with pages that showcase your offerings, tell customers your business’s story, and offer a way for them to get in touch.

Directories

Online directories, such as Google My Business and Yelp, are another way you can put your business out there. Optimize those listings and your website, too, so potential customers are more likely to find your business in online searches.

Advertising

Don’t forget about advertising, either. Print media and regional radio and TV broadcasters can be powerful ways to spread the word about your company. Business cards, brochures, and postcards can also help.

If you’re not sure where to start, a professional marketing firm can help.

Examples of good businesses to start in New Hampshire

If you don’t already have an idea for your own business, take some time to think about what your own skillsets and resources are. Do they dovetail with any business opportunities in your area? In other words, what types of businesses are lacking in your area, and is there a need you could fill?

Here are some suggestions for businesses to start in New Hampshire:

  • Tourist guide
  • Apple exporter
  • Restaurant
  • Pet groomer
  • Electrical supplies store
  • Sports equipment store

For more ideas, read our guide on the best businesses to start in New Hampshire.

Benefits of opening a business in New Hampshire

New Hampshire was ranked sixth in the nation on the Tax Foundation’s State Business Tax Climate Index for 2021. It’s hardly surprising when you consider the low corporate tax rate and the fact that the state doesn’t tax personal earned income (though it does tax dividends and interest as of this writing).

New Hampshire lacks a variety of other taxes, including sales and use tax, estate tax, inventory tax, internet tax, professional service tax, and capital gains tax.

The state’s strategic location on the East Coast is also worth considering. It’s less than an hour from Boston and the Canadian border.

Bottom Line

New Hampshire provides a welcoming space in the New England area for residents and businesses alike with low crime and low taxes. If you’re ready to turn your business idea into a reality, we can help. Check out our services for starting, running, and growing your business today.

Top New Hampshire Cities to Form Businesses

Manchester: Largest city in New Hampshire with a strong focus on technology, healthcare, and education. Revitalization of the mill district into a tech and startup hub. Offers a diverse economic environment and is actively promoting innovation.

Nashua: Close proximity to the Boston metropolitan area, facilitating access to larger markets. Strong in retail and growing in technology and manufacturing. Benefits from lower operational costs compared to Massachusetts.

Portsmouth: Rich historical background with a vibrant tourism and hospitality industry. Strong small business community focused on retail, dining, and creative industries. Coastal location advantageous for maritime-related businesses.

Concord: State capital with a stable economy centered around government services and healthcare. Home to insurance companies and legal firms. Benefits from a regulatory environment that supports professional services.

Keene: Community-oriented atmosphere with a strong focus on local and small businesses. Home to Keene State College, supporting education-related sectors. Vibrant downtown area enhances retail and service sectors.

These cities provide a blend of strategic advantages, from vibrant local economies to business-friendly tax policies, making them suitable for a variety of business ventures in New Hampshire.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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