Florida, renowned for its picturesque beaches, vibrant culture, and thriving tourism industry, is quickly emerging as a highly sought-after destination for budding entrepreneurs looking to establish a successful business venture. With its pro-business climate, diverse population, and strategic geographic location, Florida offers an unparalleled gateway to domestic and international markets.
Coupled with a robust infrastructure and a strong talent pool fostered by leading academic institutions, the Sunshine State provides the competitive edge and growth opportunities that attract innovators and industry leaders alike. In this rapidly-evolving business landscape, Florida continues to establish itself as a dynamic epicenter for commerce, creativity, and economic prosperity.
Florida Small Business Stats
- There are 3 million small businesses in Florida, which is 99.8% of all businesses in the state. (2022 SBA Small Business Profile)
- 40.5% of Florida employees work for small businesses. (Statistics of US Businesses)
- Exports by small Florida companies reached $23.8 billion. (2022 SBA Small Business Profile)
- Florida was ranked as the #11 best state for business by CNBC, with workforce, economy, and infrastructure being the highest ranking factors.
- Tax Foundation ranked Florida #4 on their 2023 State Business Tax Climate Index.
- According to WalletHub, Florida is the #2 state to start a business in the U.S.
Steps To Start A Business In Florida
Ready to start your business but want to know the next step?
Utilizing our comprehensive checklist will greatly help entrepreneurs streamline their journey and better navigate the process of starting a small business in Florida. The checklist covers essential aspects such as selecting an appropriate business structure, registering the business with the state, obtaining necessary licenses and permits, and lots more.
Step 1: Choose a Business Idea
A good idea is the first step of starting a business in Florida, but if you don’t know what type of business you should start, I have three things to consider.
First, it’s important to conduct thorough market research in your local area and identify gaps in the market, emerging trends, and areas of potential growth. This research can help you uncover business opportunities that have a higher likelihood of success.
Secondly, you should also consider whether your proposed business is something that people need or want in your area. Before committing to a particular business, test your idea through methods such as customer interviews, surveys, or creating a minimum viable product (MVP). This process can help you gauge the potential demand and refine your offering.
Last, seek professional advice and consult with a business advisor, mentor, or consultant to discuss your ideas and seek guidance. They can help you refine your business idea, evaluate its viability, and provide insights on market trends and opportunities.
Maybe you already have an idea picked out, or maybe you are still deciding on one. Regardless, you can check out our library of business ideas to get detailed industry information, trends, costs to start, tips, and lots more.
Step 2: Write a Business Plan
A business plan serves as a crucial foundation for your business, providing you with not only a tool to obtain the necessary funding to get your business off the ground but its also a roadmap to guide your direction and enhance decision-making,
Related: How to write a business plan
Step 3: Select a Business Entity
A business entity is any structure used to conduct and conduct business operations. The four main basic types of entities that can be created in Florida include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).
A Sole Proprietorship is an individual-run business in which the owner is responsible for all actions and financial liabilities of the business. This type of business structure makes it easier and less expensive to start versus the other entities, as there is little to no paperwork required by the state.
One common registration for the sole proprietorship and partnership that any business operating under a Fictitious Name (sometimes referred to as an assumed name, trade name, or Doing Business As/DBA) in Florida will need to register the business name by filing a Fictitious Name Registration (DBA).
A General Partnership is a business structure that allows two or more persons to operate an unincorporated business and share in the profits. While easy to start, it also comes with inherent risks, as each partner’s personal assets are potentially at risk when engaging in business. This means that if the business were to incur any debts or be involved in legal proceedings, the partners would be held liable for it, and all of their personal possessions, such as homes, cars, and bank accounts, could be at risk.
Related: What is a partnership?
A Corporation is a separate legal entity that is owned by shareholders. It offers the benefits of limited liability, which means that shareholders are generally only responsible for the amount they have invested in the company, even if things don’t go as planned.
Related: How to form a Florida Corporation
An LLC, or Limited Liability Company, is a popular business structure that combines the benefits of a corporation with the ease of operation as a partnership or sole proprietorship. The reason for its popularity is that the LLC offers flexibility in management and taxation while providing limited liability protection to its owners (known as members).
Related: How to form a Florida LLC
Forming a corporation or LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular formation services include:
IncFile - Great service and free registered agent the first year.
Northwest - Privacy-Focused: Free registered agent and private business address for 1 year!
ZenBusiness - Easy to use and free registered agent for 1 year!
Step 4: Register the Business
Certain licenses and permits will be needed to operate a business in Florida, and the ones needed will vary on the business’s activities and location. Some common registrations include:
Business Licenses: There is no general state of Florida business license; however, many cities require a business license to operate.
Employer Identification Number: An EIN is a nine-digit identifying code assigned by the Internal Revenue Service (IRS) to businesses. This number is used for tax identification as well as other business dealings with the IRS, such as filing a return, applying for a business bank account, and more.
Sales Tax Permit: Businesses selling products and certain services will need to register for a Sales Tax Permit with the Florida Department of Revenue.
Professional Licensing: Some services, such as physical therapists, interior designers, detectives, cosmetologists, barbers, architects, and massage therapists, require licensing in Florida. While this isn’t a license on the business, licensing is required to operate. There are two main licensing agencies for “skilled trades”: The Department of Business and Professional Regulation (DBPR) and The Department of Agriculture and Consumer Services (DACS).
Step 5: Open a Business Bank Account
Opening a business bank account is a great way to organize and track your business. Separating your personal and business funds makes it easier to track income and expenses, which not only helps with record keeping and tax time, but gives more protection in the event of an audit.
Step 6: Find Financing
Starting a business can get expensive and a common obstacle is finding funding. The best way to get started is to know your financials. Some tips for finding the money to get started include:
Develop a solid business plan: A comprehensive and well-prepared business plan is crucial for securing funding. Your plan should include a detailed market analysis, a clear description of your product or service, financial projections, and a compelling executive summary. The plan should also include the requested amount, repayment plans, and how the funds will be used. Be transparent and provide a clear rationale for the requested funding.
Understand your funding options: Familiarize yourself with the different types of funding available, such as business loans, Small Business Administration (SBA) guarantees, lines of credit, grants, angel investors, or venture capital. Research the requirements and qualifications for each option to determine which is the best fit for your business needs.
Build and maintain good credit: A strong personal and business credit history can significantly improve your chances of securing funding. Make timely payments, manage your debt responsibly, and monitor your credit reports regularly.
Determine collateral: Many lenders require collateral to secure funding. Assess your assets and be prepared to offer collateral, such as real estate, equipment, or inventory, if needed.
Be prepared to invest your own capital: Lenders often expect business owners to have some “skin in the game” by investing their own money into the venture. Demonstrating personal commitment to your business can make your loan application more attractive.
Be patient and persistent: Securing funding can be a time-consuming and challenging process. Be patient, prepare for setbacks, and persistently pursue multiple funding sources.
Step 7: Hire Employees
Hiring your first employee in Florida can be both an exciting milestone and a necessary, but complex process for small business owners. Preparing for this step involves several key considerations, such as understanding federal and state labor laws, developing comprehensive job descriptions, establishing fair compensation and benefits packages, and implementing efficient onboarding processes.
Step 8: Obtain Business Insurance
Having the right insurance coverage to protect your business is an essential part of starting a business. Depending on the type of business you are creating and the risks associated with it, there are many types of insurance that should be considered, such as property insurance to protect against damages or theft, and liability insurance to cover any potential lawsuits and injury claims made against your company.
Workers’ compensation insurance is required for any business in Florida with six or more regular employees or twelve or more seasonal workers in certain circumstances.
As this is a complex area requiring careful consideration of all risk factors involved in operating your business, it is best to seek professional advice who can help identify what type and level of cover best fits the specific needs of your small business.
Step 9: Set up an Accounting System
A well-organized bookkeeping system provides numerous benefits to business owners, with effective recordkeeping and tax compliance being at the top of the list.
Accurate recordkeeping is crucial for monitoring the financial health of your business. A good bookkeeping system enables you to track revenues, expenses, and cash flow, allowing you to make informed decisions about your operations, investments, and growth strategies. It also helps you identify potential issues or inefficiencies that may require attention, ensuring your business remains financially stable and sustainable.
Secondly, a well-maintained bookkeeping system simplifies the process of filing state and federal taxes by providing organized records of all taxable transactions, deductions, and credits. This organization allows you to accurately report your income and expenses, minimizing the risk of errors or discrepancies that could lead to tax penalties, interest charges, or audits.
By maintaining organized financial records, business owners can make informed decisions, minimize tax-related risks, and create a strong foundation for their company’s success.
Related: Setting up accounting for a business
This material is property of StartingYourBusiness.com
How They Started
Pawz & All – Orlando, Florida
Common questions when starting a business in Florida
Is Florida a good state to start a business?
Florida is an attractive location to start a business for various reasons. Here are some key factors that contribute to its business-friendly environment.
No state income tax: Florida has no state income tax, which can save business owners and employees money. This factor can make the state more attractive to entrepreneurs and employees, potentially leading to a larger talent pool for businesses.
Growing population: Florida’s population has been steadily increasing, providing a larger customer base and skilled labor pool for businesses. This growth creates opportunities for new and existing businesses to thrive.
Favorable business climate: Florida consistently ranks among the top states for its business-friendly environment. Factors like its pro-business policies, competitive cost of doing business, and streamlined regulations make it an appealing choice for entrepreneurs.
Strong tourism industry: Florida is a popular tourist destination, with millions of visitors each year. This robust tourism industry can create additional opportunities for businesses that cater to tourists, such as hospitality, retail, and entertainment.
Infrastructure: Florida’s transportation infrastructure includes multiple international airports, highways, railways, and seaports, providing businesses with easy access to domestic and international markets.
Diverse economy: Florida has a diversified economy with strengths in industries such as tourism, agriculture, aerospace, and technology. This diverse economic landscape can provide opportunities for businesses in various sectors.
Support for small businesses and startups: Florida offers a range of resources and support for small businesses and startups, including access to funding, networking opportunities, and business development services.
What are the steps to starting an LLC in Florida?
There are three main steps to starting an LLC in Florida. These include:
1. Making sure the LLC name is available
2. Appointing a Registered Agent
3. Filing the Articles of Organization
There are a few more details to consider depending on the business. Learn more about starting an LLC in Florida.
How much does it cost to start an LLC in Florida?
The cost to start an LLC in Florida is $125 for the filing with the Florida Department of State.
What licenses do I need to start a business in Florida?
There isn’t a general business license required by the state, however, there are potentially several different licenses and permits a business will need to obtain before starting.
What are some good business ideas to start in Florida?
While one person’s good idea is not necessarily a good idea for someone else, here is a list of popular small businesses to consider starting in Florida, based on the state’s economic strengths, growing industries, and tourism appeal:
Tour or excursion services: Capitalize on Florida’s tourist appeal by offering guided tours, eco-tours, boat excursions, or adventure experiences.
Retail store or boutique: Start a retail business specializing in niche products, such as a souvenir shop, local crafts, or specialty foods.
E-commerce: Set up an online store to sell products or services, leveraging Florida’s strong infrastructure and access to national and international markets.
Home-based elderly care: As Florida has a large elderly population, providing in-home care, companionship, or specialized services can be a fulfilling and profitable business.
Water sports rental and lessons: With abundant coastline, water sports rentals, and lessons (e.g., kayaking, paddleboarding, or surfing) are in high demand.
Specialty cafe or bakery: Open a cafe or bakery that offers unique products, such as specialty coffees, healthy menu options, or gourmet baked goods.
Of course, when selecting a business idea, it’s essential to consider your interests, skills, and the local market’s needs to maximize the chances of success, but these are just a few examples of popular small businesses to start in Florida. For more ideas, check out our library of business ideas.