The first step in starting a business in Alaska is having a good business idea. Maybe you already have an idea picked out, or maybe you are still deciding on one.

The “best” business to start in Alaska will largely depend on your interests, skills, and target market. However, some businesses tend to perform well in Alaska due to the state’s unique characteristics and opportunities. Here are the top 10 most popular types of businesses to start in Alaska based on online searches:

Tourism and hospitality: With its stunning landscapes, wildlife, and outdoor activities, Alaska attracts millions of tourists each year. Starting a business in the tourism and hospitality industry, such as a hotel, lodge, restaurant, guided tour service, or adventure sports company, can be highly profitable.

Fishing and seafood processing: Alaska has a thriving fishing industry, thanks to its abundant marine resources. Businesses related to commercial fishing, seafood processing, or exporting seafood products can capitalize on this natural advantage.

Transportation and logistics: Due to Alaska’s remote location and challenging terrain, there is a constant demand for transportation and logistics services. Starting a business focused on air, sea, or land transportation, or providing logistics and freight forwarding services, can meet this demand.

Renewable energy: Alaska has vast potential for renewable energy production, such as wind, solar, hydro, and geothermal power. Developing renewable energy projects or providing services related to installation, maintenance, and consulting can be a lucrative business opportunity.

Specialty retail or e-commerce: Given the limited availability of some products in Alaska, there is a market for specialty retail or e-commerce businesses that offer unique or hard-to-find items tailored to the local population’s needs and preferences.
Agriculture and local food production: With its short growing season and limited agricultural land, Alaska imports most of its food. Starting a business focused on local food production, such as greenhouses, hydroponics, or vertical farming, can help meet the demand for fresh, locally sourced produce.

Health and wellness services: Providing health and wellness services, such as fitness centers, yoga studios, or mental health counseling, can cater to the growing interest in personal well-being and self-care among Alaska residents.

Before starting any business, it’s critical to conduct thorough market research and understand the local regulations. To learn about different types of businesses, feel free to check out our library of business ideas to get detailed industry information, trends, costs to start, tips, and lots more.

Writing a business plan is an essential step in starting and running a successful business. A well-crafted business plan serves several purposes, such as outlining your business’s goals, strategies, and timelines, calculating how many clients or sales you need to break even, calculating the funding needed to start, and more.

Writing a business plan for the first time might seem daunting, but it’s a vital step toward transforming your vision into a successful reality. Crafting a well-researched and comprehensive plan will not only help you secure funding but also give valuable insights into your industry, market, and competitors.

Related: How to write a business plan

The next step in starting a business in Alaska is selecting a business entity.

The business entity is sometimes referred to as a business structure or legal entity, which refers to how a business is legally organized. There are four primary business entities: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). A brief description of each is below.

A Sole Proprietorship is the most simple and common type of business structure in the state of Alaska, where the business is owned and operated by a single individual. In a sole proprietorship, there is no legal distinction between the owner and the business, meaning the owner is personally responsible for all aspects of the business, including liabilities, debts, and taxes.

Unless the business will operate under the name of the owner, a DBA (also referred to as Doing Business As, Fictitious Business Name, Assumed Name, or Trade Name) can be, but is not required to, register with the state. This registration provides exclusive use for 5 years and can renew.

Related: How to start a sole proprietorship in Alaska

General Partnerships are a type of business structure where two or more individuals agree to share the ownership, profits, and responsibilities of managing the business and are personally liable for the partnership’s debts and liabilities. A General Partnership can be created through an oral or written agreement, though it is highly recommended to have a written partnership agreement to outline the rights, responsibilities, and expectations of each partner.

A partnership can choose to register a DBA if desired.

Related: What is a partnership?

A Corporation is a type of business structure that is legally separate from its owners (shareholders). It is formed under state law by filing Articles of Incorporation with the Alaska Division of Corporations, Business, and Professional Licensing. A corporation provides limited liability protection to its owners, meaning they are not personally responsible for the corporation’s debts and obligations. Though in many cases, they will be personally liable for a business loan as banks typically require a personal guarantee.

Related: How to form a corporation in Alaska

The Limited Liability Company (LLC) is a type of business structure that combines the limited liability protection of a corporation, where the LLC members have personal liability protection, with the flexibility and simplified taxation of a sole proprietorship or partnership. An LLC is formed under state law by filing Articles of Organization with the Alaska Division of Corporations, Business, and Professional Licensing.

Related: How to form an LLC in Alaska 

Certain licenses and permits will be needed to operate a business in Alaska, and the ones needed will vary on the business’s activities and location. Some common business registrations include:

State of Alaska Business License – The State of Alaska requires anyone conducting business in the state to obtain a state business license from the Alaska Department of Commerce, Community, and Economic Development.

Employer Identification Number – Employer Identification Number – The Employer Identification Number or EIN (sometimes referred to as the Federal Employer Identification Number, FEIN, or employer ID number) is a nine-digit tax identification number issued by the Internal Revenue Service (IRS). This number identifies a business operating in the U.S. and is used for paying payroll taxes, filing tax returns, and more. Much like what a social security number is to a person, the EIN is a unique number for a business. While most businesses will need to get an EIN, some do not.
Partnerships, corporations, and most LLCs OR sole proprietorships with employees MUST register for an EIN.

Sole proprietorships or single-member LLCs with no employees are NOT required to get an EIN. In these instances, the owner’s social security number can be used to identify the business; however, an EIN can still be requested.

Filing the EIN can be done online at no cost through the IRS website, which takes only a few minutes, and the number is available immediately. Alternatively, an EIN can be registered by mail or fax by submitting IRS Form SS-4.

Related: Step-by-step guide to registering an EIN

Professional Licensing – Some services, such as acupuncturists, barbers, home inspectors, accountants, and others, require professional licensing in Alaska. While this isn’t a license on the business, occupational licensing is required to offer the service.

City Business Licenses – In addition to the statewide business license, some cities also require businesses to be licensed by the city to operate.

Related: What business licenses and permits are needed in Alaska?

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business. Every bank is different, but in general, they will request the following:

Sole proprietorship & partnership – Trade Name Certificate, EIN or SSN, and the owner(s) driver’s license
Corporation – Articles of Incorporation, bylaws, Certificate of Good Standing, EIN, and the owner(s) driver’s license
LLC – Articles of Organization, Operating Agreement, Certificate of Good Standing, EIN, and the owner(s) driver’s license

Securing funding to start a business in Alaska involves exploring various financing options and determining the most suitable sources for your new business.

Begin by creating a comprehensive business plan, outlining your business objectives, financial projections, and strategies for growth. A well-prepared business plan, which was covered earlier, is essential for attracting investors or obtaining loans.

There are a number of small business financing options, which may include personal savings, loans from friends or family, conventional bank loans, or Small Business Administration (SBA) guarantees.

Related: Understanding the different types of business funding.

Hiring employees is a complex and often overwhelming process for new small business owners, as there are Alaska and federal labor laws to be aware of, such as minimum wage, overtime, workplace safety, and anti-discrimination regulations.

In addition, employers are responsible for reporting new hires, verifying employees are eligible to work in the U.S., income tax withholding, unemployment insurance, and payroll withholding taxes, including Social Security, and Medicare.

Related: Steps to hiring your first employee in Alaska

Business insurance is never at the top of anyone’s list of things they want to do when starting their new venture, however, business insurance may be critical to protecting your business.

Most types of business insurance are optional, except for workers’ compensation insurance. The Alaska Workers’ Compensation Act requires every employer with one or more employees to obtain workers’ compensation insurance unless the employer has been approved as a self-insurer by the Alaska Workers’ Compensation Board.

Even if insurance isn’t required and there is a fire, theft, or personal injury lawsuit, the business owner may have to pay out-of-pocket for damages and legal fees. Home-based businesses may want to consider business insurance, too, as personal home and vehicle policies may not cover a business loss.

Related: Types of insurance your business may need

Businesses operating in Alaska have various tax responsibilities, and while Alaska does not impose a state sales tax or a personal income tax, businesses are still subject to certain taxes and filings. As a result, setting up an accounting system for your business is one of the most important things you can do for your company to ensure long-term success.

Related: Setting up the accounting for your business