Diversity is an area of focus in Oklahoma, too. Businesses can be certified as minority-owned or women-owned, opening up doors of possibility throughout the state. Maybe that’s why, of the 712,582 employees in Oklahoma, 90,316 work for certified minority-owned small businesses.
Let’s look at some other benefits of starting a business in Oklahoma.
Benefits of Opening a Business in Oklahoma
In addition to raising up businesses with minority and women owners, Oklahoma makes it simple to start a business by keeping costs and taxes low. Tax incentives and credits offset costs, with programs and incentives for automotive and aerospace and defense businesses.
The Oklahoma Venture Forum and well-known i2E help fund and grow start-ups in Oklahoma. Incubators are scattered throughout the state, offering guidance, networking opportunities, space to work, and educational programs for entrepreneurs. And, if that’s not enough, they even offer one-on-one help, for free.
In addition to Oklahoma-specific benefits, being a business owner lets you be in charge, controlling every aspect of the company from its branding to its product. You can craft an environment that suits how, when, and where you want to work.
Start an Entity in Oklahoma
ZenBusiness offers the following formation services to our customers:
- Oklahoma Limited Liability Company (LLC)
- Oklahoma Professional Corporation
- Oklahoma Corporation
- Oklahoma Nonprofit Corporation
How to Start a Business in Oklahoma
When you’re setting out on a big task like starting a business, it can be helpful to break the mission into smaller steps. By focusing on each one in succession, you’ll systematically arrive at your desired goal of becoming a small business owner.
So, what are the steps to starting a business?
How to Start a Business in Oklahoma Checklist
- Form a business plan
- Choose a business structure
- Assess your Oklahoma business costs
- Pick a business name
- Register your business and open financial accounts
- Market your Oklahoma business
1: Form a business plan
The first step to creating a successful business is writing a business plan. This is your immediate and ongoing guide for starting up and staying up. Anyone putting money into the business, either as a loan or grant, will likely request this plan. Here are the sections you’ll want to consider:
- Executive summary: This is a summary of everything else in the plan, so it may help to write it last.
- Company description: What problem does your company provide a solution for? How does your company provide a positive presence in the world? Be specific here. Also, use this section to identify SMART goals (Specific, Measurable, Attainable, Realistic, and Timely).
- Market analysis: Who else is addressing this area of business? How are you different?
- Products and/or services: What is the exact widget (or widgets) you’re selling? It could be products or services. Describe them fully, and how they serve your Oklahoma customers.
- Management team: You’re at the top, but is anyone else helping you get this business off the ground? They may not be owners, and they could just be advising you. Use this section to let people know there are others working on the project who have unique skills.
- Marketing plan: How will your target customers know your business exists?
- Financials: Think about what you’ll spend and what money will come in. At what point do you project the business to break even (bring in as much money as it spends)?
2: Choose a business structure
The structure you choose for your Oklahoma business should be suited to your specific tax and ownership situation. A few of the options include corporation, limited liability company (LLC), or sole proprietorship.
A sole proprietorship is the simplest form of business entity. It offers easy management and full control of the business. It does not, however, provide any liability protection for your personal assets. The other two structures do offer that liability protection. That means if the company gets into trouble, your personal assets stay out of it.
A corporation, which can be designated as an S or C corp, provides a shield of protection for your personal assets. C corps also come with the dreaded whammy of double taxation. This means that the money in a corporation gets taxed and, when you get paid by a corporation, the money gets taxed again on your income taxes. S corps aren’t subject to double taxation. Instead, you and the other owners report the company revenue as personal income. But there are some significant restrictions as to who can qualify for S corp designation, and it takes a lot of time and paperwork to earn that certification.
A happy medium that offers both personal asset liability protection and avoids double taxation is the LLC or limited liability partnership (LLP). Both options are available in Oklahoma, with accountants, attorneys, and other professionals that require a license often choosing the LLP structure and most other small businesses choosing LLC. (Note that banks and insurance agencies cannot be LLCs or LLPs.)
You can file your business structure of choice online with the Oklahoma Secretary of State, which also provides information about the various fees required.
3: Assess your Oklahoma business costs
Before starting a business in Oklahoma (or anywhere, for that matter), it’s important to calculate your business costs. U.S. Bank released a study that revealed poor management and understanding of cash were significant factors in a staggering 82% of business failures. If you don’t know your business costs, then you can’t know your business cash flow, right? So, grab a pencil (or open a spreadsheet) and let’s get to counting the costs.
Remember how we’re breaking the giant task of business start-up into steps? The same holds true for listing costs. Think of them in terms of one-time, fixed, and ongoing.
- One-time costs are those you’ll experience at startup time, like buying equipment. Once you’ve paid a one-time cost, it’s done.
- In contrast, fixed costs have to be paid regularly, no matter how your business performs. These are things like the office/warehouse rent and insurance fees. Those business incubators in Oklahoma can help keep some fixed costs low for you by providing low-cost office rental space.
- Finally, consider your ongoing expenses. These are costs you’ll have regularly, but whose prices change as your business changes. For instance, if you sell more, you’ll probably have to buy more supplies to make your product.
4: Pick a business name
Now for the fun part: naming your business. Brainstorm a list of possibilities. Think about words in your industry, location, or maybe even your own name. Then, look critically at the list. What’s memorable, unique, and easy to understand?
After narrowing down the list, check to see what’s not being used in Oklahoma already. Check in the online world, too, and see if the website address and social media handles for this name are available. Once you find a business name that no one else has in the real world or online, register the domain and related social media handles.
5: Register your business and open financial accounts
Register your new business in Oklahoma using the structure you selected earlier. Then, unless you chose to operate as a sole proprietor, you’ll likely need to pop over to IRS.gov to obtain a federal employer identification number (EIN). This will serve as your federal tax ID number, while sole props can use their social security number for this purpose.
The registration and EIN paperwork are necessary to then open a business bank account. Don’t flow your business financials through your personal bank accounts. That can affect the liability protection for your personal assets and it can get confusing when filing taxes.
Oklahoma does not require a license to start or own a business. There are business licenses and permits required for certain industries and to engage in certain business activities, though, such as the sales tax permit. Additionally, the city or municipality where you locate your business may have licensing and/or permitting requirements.
To round out your registrations and account openings, consult with an Oklahoma business insurance agent to learn about what type of business insurance you may need (general liability insurance, workers compensation insurance, unemployment insurance, etc.).
6: Market your Oklahoma business
Time to tell the world about your business. Consider how you’ll do this both in the real world and online.
For real world initiatives, register your business location with Google My Business, hand out business cards liberally, and think about partnering with other local merchants for events and sales initiatives. Join a civic organization or donate some of your products to a prominent non-profit so that the community can see you care and are here to serve them. If your customer audience isn’t local, think about how you can adapt these ideas to your target market.
Online, optimize your website for search engines and design a social media strategy — or hire an Oklahoma agency to help you.
Examples of Good Businesses to Start in Oklahoma
There are many companies in Oklahoma that are successful. They include Devon Energy, WPX Energy, INTEGRIS Health, and Heartland Payment Systems. Startup success stories from the well-known Oklahoma-based venture capital fund i2e include WeGoLook (sold an 85% interest for $36 million in 2017) and Prescott, a pharmaceuticals start-up.
Aerospace and defense is a big industry in Oklahoma, as it is home to the largest Department of Defense air depot and commercial airline facility in the world, along with more than 1,100 aerospace entities. If you’ve got a business idea that would serve the aerospace and defense industry or become a part of it, you would be in good company in Oklahoma.
Oklahoma is a small business-friendly state with low fees and taxes, and clear-cut government communication. There are numerous forms of assistance to help entrepreneurs get their business going here, both from venture capital funds and small business incubators to individual sessions with Oklahoma government workers.
Oklahoma Business FAQs
What is the workforce like in Oklahoma?
Oklahoma boasts a large workforce and provides details about it by region to potential employers. The workforce is lagging in educational credentials.
What are good cities in Oklahoma to start a business?
Tulsa and Oklahoma City are rated in the top 50 cities for startups in the nation.