North Carolina was ranked in the top 15 states in the U.S. to start a business in 2019 — for good reason. The combination of growing cities that attract young professionals and the diverse climate of the state leads to many different types of business opportunities. The state also offers low corporate and property taxes, making it advantageous to scale up a successful business.
Starting a business is challenging, and as a business owner, you need every advantage you can get. North Carolina offers a low cost of living with more business advantages than you’ll find anywhere else in the South. This leads to a higher business survival rate than other states because sole proprietors can survive longer until their business pops and larger businesses can attract a great pool of talent willing to live in the state.
Benefits of Opening a Business in North Carolina
When you break down North Carolina by specific cities, it is the best state to start a business in. The benefits cited in that research were a combination of low business costs, a strong labor supply, and a relaxed business regulatory environment. All of these benefits make North Carolina a strong competitor when deciding where to launch your new business.
North Carolina also has many personal benefits for business owners. The state has a strong business climate and a diverse landscape. You can go to the beach one weekend and easily head to the mountains the next. The quality of life is top-notch as well, and NC often ranks highly on lists of the best states to live in.
How to Start a Business in North Carolina Checklist
Part of North Carolina being a great place to start a business is how easy it is to set up and maintain the legality of your business. Every state has different rules and regulations, and following these six steps will help you get your N.C. business off the ground.
1. Create a Business Plan
Before you spend time and money on a new business in North Carolina, first make sure your idea has a market that you can reach and then create a plan to attack that market. Both of these objectives can be accomplished by crafting a well-thought-out business plan that includes market research specific to your locations in NC and financial analysis of your future business.
Consider the following when writing your business plan:
- A clear business idea and overall mission
- Specific milestone goals
- Specific problems that could prevent your success and how you’ll mitigate those things
- Specifics about your target customer
- Full market analysis
- Financials that budget out your business costs for at least one year
- Information related to local grants or tax breaks that your business could qualify for, factored into your financials
North Carolina provides a collection of resources for creating a business plan in case you have more questions or need some help.
2. Choosing a Business Structure in North Carolina
In order to get a business license, you’ll need a business structure that works for your goals before you start selling. Most small businesses in North Carolina choose either a limited liability company (LLC) or a sole proprietorship. Electing for a sole proprietorship is easier because there’s less paperwork and costs to worry about, but it may not be the right choice for you.
An LLC provides a couple of key benefits over a sole proprietorship. An LLC is an official business entity that is separate from you personally. This means that your personal assets can be protected from your business activities, which is important in the event your business doesn’t work out and you owe creditors. With an LLC, you won’t have anything at risk that is greater than the investment you put into your business while creditors can go after the home or other personal assets of a sole proprietor.
Because of the sensitivity of the LLC protection in North Carolina, you’ll want to make sure you set it up correctly. It’s easy and affordable to use ZenBusiness’s LLC formation services to establish an LLC. Every state has slightly different rules so if you’re looking for the protection that an LLC provides, let us help you make sure you get it from day one.
3. Determine Your Business Costs
When launching your business in North Carolina, it’s important to plan for how you’ll cover all of the associated business costs. You can do most of the cost analysis while creating your business plan, but let’s look at the specific costs to keep in mind. We’re breaking them up into two groups: One-time expenses and ongoing costs.
One-time cost examples:
- Fees for registering your business
- Down-payment for office space
- Technology such as computers, printers, and software
Ongoing cost examples:
- Payments on any business loans
- Marketing materials
- North Carolina Small Business Taxes
- Payroll, if you have employees
See this resource on the costs to include and how to calculate all of them.
4. Create a Business Name For Your North Carolina Business
Of course, before launching, you need to decide your business’s name! It’s a crucial part of the registration process, and it lets the state and customers know who you are and what you’re selling. Choose a name that is easy to understand and pronounce. Many like choosing a name that relates to their business’s industry.
Regardless of the type of business, you’re starting, our world is becoming more digital by the second. It’s important for your business to be online, which is difficult if you choose a name that already exists in North Carolina or in 20 other states who already have a website and social media presence. Choose something unique so your potential customers can easily find you. You can use our domain registration tool to snag a domain name while you form your business.
Keep in mind that you can have a legal name that is different from your marketable name or the one you do business with. If you do this — many businesses do — you’ll need to register a DBA (doing business as) name with the state of North Carolina. ZenBusiness can help you quickly register your DBA so that you can focus on what matters. You can also see what business names are already taken through North Carolina’s online tool.
5. Register Your Business, Open Financial Accounts, and Get Business Insurance
Now that you’re prepared to launch your new business, it’s time to sort the legal and financial requirements with the state. Your first step is to register your business under the business structure you chose. Part of this is applying for a federal employer identification number (EIN) from the IRS, which you’ll need before your registration can be submitted, and an operating agreement.
Depending on the nature of your business, you may need to register for a business license or apply for local permits and licenses in each city you’re physically doing business in. Then, consider opening a business bank account to keep everything separate, which is helpful when it comes time to file your business taxes.
Also, most small businesses need general liability insurance, but consider speaking with an insurance advisor to learn more.
6. Market Your North Carolina Business
Now it’s time to let your future customers know that your startup exists! Many businesses rely on referrals and word of mouth, but there’s much more you can do as a brand-new business. Market to your customers wherever they are and meet them there, whether it’s in print, online, or a combination of both.
While your marketing strategy may include some in-person or “on-the-ground” strategies, it’s important to build an online presence. Identify what your social media strategy will be across the relevant platforms (Facebook, Instagram, LinkedIn, Twitter, etc.) for your industry. If you have a physical location in North Carolina, sign up for a Google My Business account so you appear when customers search for your service on Google.
Take a peek at this collection of business marketing resources for more information or pick from the top marketing firms throughout the state to help you with your efforts.
Examples of Good Businesses to Start in North Carolina
North Carolina has so many great opportunities to help just about any type of business find success. However, let’s take a look at some examples of businesses that are an ideal fit for the state’s customer base, climate, and geography.
- Real estate brokerage
- Staffing firm
- Cleaning services
- Local bar or restaurant
- Construction business
- Handyman business
- Event planning
- Rafting or tour guide business
- Any home-based or online-based business
For more information on small businesses in North Carolina, see the SBA’s profile of the state’s small business economy, which includes a breakdown of businesses by industry.
North Carolina is more than just a beautiful state full of everything from stunning shorelines to gorgeous mountains. It also offers many advantages to new business owners ready to make their mark on the industry. And by taking the right steps to launch your own business, you’ll be well on your way to maximizing your potential future success.
How to Start a Business in North Carolina FAQs
How much does it cost to start a business in North Carolina?
The costs of starting a business vary based on industry, due to equipment, licensing, and inventory costs. The state filing fee to register an LLC or corporation in North Carolina is $125. Other business types have different fees.
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