Utah is a beautiful state to call home, full of mountains that see an average of 500 inches of snowfall yearly as well as world-renowned sights like the Great Salt Lake near Salt Lake City.
Benefits of Opening a Business in Utah
Forbes recently ranked Utah 3rd best in the United States for business, noting its labor supply, regulatory environment, and growth prospects. Chances for success are high here, with 79.27% of startups in Utah making it past that tough first year.
Financial help abounds from venture capital firms like Park City Angels, SLC Angels, and Utah Angels 2. There’s even a directory of angel investors ready to support the next great business idea in Utah.
Utah makes it easy to do business in their state with low fees and online systems for application, licensure and permitting.
Start an Entity in Utah
- Utah Limited Liability Company (LLC)
- Utah Professional Corporation
- Utah Corporation
- Utah Nonprofit Corporation
How to Start a Business in Utah
Well, if Utah is so friendly to entrepreneurs, let’s get this show on the road. Here’s your checklist for starting a business in Utah:
How to Start a Business in Utah Checklist
- Write a business plan
- Select a business structure
- Count up your Utah business costs
- Create a business name
- Register your Utah business and open financial accounts
- Market your Utah business
1: Write a business plan
Right now, you may have a million ideas racing through your head for this new Utah business. Getting those thoughts on paper will help you see if those ideas could work, what areas you might be forgetting about, and how best to position this dream for ultimate success. Remember all those potential angel funders in Utah? They’ll want to see this plan, too. So, take some time to create a stellar one.
Include the following elements in your business plan:
- Specific business description: What problem are you solving, and how?
- Customer profile: Who will buy from you? Be as descriptive as possible so readers like lenders and potential partners believe in the plan.
- Potential pitfalls: What could go wrong? How will you prevent that or deal with it when it happens?
- Cost accounting: What will it cost to get up and running, and stay up and running? Good news on this front, because Utah is working to keep costs of doing business low.
- Funding sources: How are you going to pay start-up costs? Yourself? Loans? Grants? Utah Angel investors?
- Location: Four cities in Utah rank high nationwide for being good cities to start a business.
- Growth plan: Set “SMART” Goals (Specific, Measurable, Attainable, Realistic, and Timely) for your Utah business. Will you expand outside the state? The country? Will you hire employees?
2: Select a business structure
When you choose a type of business entity, do it with your specific tax situation and goals in mind. Some of the most common business structures are corporations, sole proprietorships, and limited liability companies (LLCs).
Legally, a corporation is treated as its own separate entity. The money it earns is taxed once at the corporate level, and then again as personal income. This is why some people elect not to use a corporate structure, as the money gets taxed twice.
At the opposite end of the spectrum is a sole proprietorship. A sole proprietor’s money only gets reported on your personal taxes. However, it also leaves your personal assets vulnerable to lawsuits or other claims against the company.
A middle ground used by many small business owners is the LLC. This structure provides a shield for personal assets through liability protection, and it can avoid double taxation.
You can file for any of these entities on the Utah.gov website, which also provides information on the permits, licenses, or business registrations you may need.
3: Count up your Utah business costs
Calculating your costs before spending gives you the peace of mind of knowing exactly how much is needed to get your business going. You’ll face several costs of doing business in Utah, including the fixed, one-time, and ongoing costs that come with your specific business.
- Fixed costs are paid regularly and won’t change with small shifts in business operations. These costs are things like the rent, attorney and accountant fees, and insurance.
- Ongoing expenses, on the other hand, do change as your business fluctuates. For instance, if you sell more of a product, you’ll need to buy more of whatever it takes to build it.
- Finally, there are one-time costs to set things up. This includes office furniture, machines/equipment, software, and website creation.
Not sure you’ve accounted for everything? The Small Business Administration (SBA) offers a handy checklist for calculating startup costs.
Things can get overwhelming once you’ve completed this step and realized how much starting your business may cost. Don’t panic! Remember, Utah has financial assistance at the ready. They want your business, so much so that they even have a handy workshop to teach you how you can access financial assistance.
4: Create a business name
Naming your business is a crucial decision. It can snag attention or turn customers away, depending on how understandable, distinct, and memorable it is. Of course, you can’t pick a business name that’s already in use. Getting sued is not a good look for a new business. You can choose to form your LLC under one name and then file for a “doing business as” (DBA) name. This allows an entity to transact business under an assumed name, but be legally owned by your LLC.
But even if you check the Utah business registry and find that the name is available, you’re not quite done. What if someone already has that website locked down? Check domain availability and, if no one else has snatched it, register the domain name. Also, see if there are corresponding identities available on the social media platforms you’ll use and register them.
5: Register your Utah business and open financial accounts
Remember that structure you picked? Time to commit. Register your LLC or corporation with the state of Utah. Now you’re officially in the eyes of the state. But don’t stop there. If you’re a corporation or an LLC, you will likely need to visit the IRS site to get a federal employer identification number (EIN). (It’s worth noting that sole proprietorships can use their social security number as their federal tax ID number, instead of obtaining an EIN if they wish.)
Take any registration documents and EIN paperwork you have to a bank and open a business bank account. In Utah, there are small business-friendly banks where you can also apply for a business credit card, if necessary.
Utah also has a site called One-Stop, which is full of business resources for learning about the permits, licenses, and zoning requirements required by your county, town, or city.
Finally, meet with a Utah insurance agent to discuss what type(s) of business insurance (liability insurance and workers’ compensation, for instance) are best for protecting your new business.
6: Market your Utah business
After you’ve done all of this work, it’s time to walk into that dream and get some customers. If you’re a retail business serving the locals, register the business location on Google My Business and in local business directories. To get community involvement, think about holding an open house or partnering with established businesses in some way. Join a civic group or serve at a non-profit. Businesses are often driven by relationships, so spend time building yours.
In the virtual world that domain name, you registered earlier to work with a search-engine-optimized site. And those social media presences you snatched up? Time to put those to use, too. Create a social media strategy and execute it. If you don’t have time, maybe a local high school or college student would be interested in earning a few bucks to help.
Ask for email addresses whenever possible and send useful information to your list on a regular basis. For instance, let’s say you’re selling candles. Maybe email them an article about how to arrange a date night and include candles as a small part of the overall article.
It can be overwhelming to handle everything by yourself, so don’t be shy about getting some help. There are some great digital marketing agencies in Utah that could end up helping you build strategic business relationships in the real world, too.
Examples of Good Businesses to Start in Utah
The economic state of Utah is well-documented in annual reports to the governor. Half of Utah’s leading 10 private-sector industry groups reported net year-over-year job gains despite the pandemic. These include trade, transportation, utilities, construction, financial activities, and manufacturing.
Declines occurred in leisure and hospitality services, professional and business services, information, health and education services, and mining. The fastest-growing companies in Utah are Pattern, Cosset, Dental Intelligence, SimpleNexus, Blue Raven Solar, Motivosity, Blue Fire Leads, Wandrd, Podium, and Awardco.
Utah is a beautiful state with government infrastructure that is suited well toward new businesses. There are several opportunities to find startup funding, online services to make establishing a new business quick and easy, and a diverse and available workforce.
Utah Business FAQs
What is the median income in Utah?
The median household income in Utah is $10,068 higher than the national average. Utah’s median household income is $75,780.
What is a good business to start in Utah?
A tech business is a solid fit for Utah. South Jordan has become known as the Silicon Slopes for its wealth of tech startups and skiing. Lehi is a part of that, as well. Logan has Utah State University, whose specialities in science, engineering, and research help ensure you’ll have knowledgeable workers. If you’re more into manufacturing and retail, check out the Salt Lake City suburb of Taylorsville.
What does it cost to register an LLC in Utah?
Utah LLC fees start at $70, but there are more costs to keep in mind, including $22 for the option of reserving your business name or filing for a DBA name.
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