How To Start A Business In Nevada
Nevada stands out as an ideal location for entrepreneurs looking to establish a prosperous business, owing to its attractive business environment and diverse economic landscape. The state’s business-friendly regulations, absence of corporate and personal income tax, and streamlined processes for business formation contribute to a cost-effective atmosphere that fosters business growth.
Nevada’s economic stability, driven by industries such as tourism, gaming, technology, logistics, and renewable energy, offers ample opportunities for growth across various sectors. Additionally, the state’s growing and diverse workforce ensures access to the talent necessary to support business operations.
Nevada Small Business Stats
- There are 312,257 small businesses in Nevada, which is 99.2% of all businesses in the state. (2022 SBA Small Business Profile)
- Exports by small Nevada companies reached $2.4 billion. (2022 SBA Small Business Profile)
- 42.8% of Nevada employees work for small businesses. (Statistics of US Businesses)
- Despite Nevada only ranking as the 39th best state for business by CNBC, it ranked #5 for infrastructure and #7 for business friendliness.
- Nevada has one of the highest start-up business survival rates, with an 83.2% chance of surviving after the first year.
- WalletHub ranked Nevada as the 8th best state to start a business, with business environment #11 and access to resources #12 being the highest-ranking factors.
Starting A Business In Nevada Checklist
Designed to help entrepreneurs who are starting from scratch, this checklist illuminates the common and crucial steps of starting a business in Nevada. By following our checklist, aspiring business owners can avoid costly mistakes and streamline the startup process to get started in no time.
Step 1: Choose a Business Idea
Starting a business in Nevada can be an exciting and rewarding experience. Before taking the plunge into entrepreneurship, it is important to evaluate the feasibility of your business idea.
When assessing a business opportunity, there are several factors to consider. Market research is essential when determining whether or not there is demand for your product or service. It is also important to understand the competitive landscape and how you can differentiate yourself from other businesses in the area.
Our business library can help entrepreneurs further research their business ideas by providing detailed industry information, trends, costs to start, tips, and lots more.
Step 2: Write a Business Plan
An important step in starting a business is careful planning and preparation. A comprehensive business plan is essential for any start-up, as it will provide the roadmap for your business’s growth and development.
A business plan should include information on your company’s vision, its target market, competitive analysis, financial projections, marketing strategy, and operational plans. This information will help you determine the best strategies for achieving your goals and objectives. It can also serve as a guide for potential investors or lenders who may be interested in financing your venture.
Having a well-thought-out business plan can also help you stay organized and focused on the tasks at hand. It will provide clarity on how to allocate resources and prioritize activities that are most important to the success of your business. Furthermore, having a comprehensive business plan can help you anticipate potential risks or challenges that may arise during the course of running your business.
Related: How to write a business plan
Step 3: Select a Business Entity
The next step to starting a business in Nevada is selecting a business entity (also referred to as a legal or business structure). A business entity is how a business is organized to conduct business. It is important for new business owners to understand the different types of business entities and choose the one that best suits their needs. In Nevada, the four most common types of business entities are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
There are four primary business entities: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). A brief description of each is below.
Sole Proprietorship: This is an unincorporated business owned by one individual. This type of entity offers simplicity and flexibility but also carries unlimited personal liability for all debts and obligations incurred by the business. This is suitable for low-risk businesses or individuals testing their business ideas.
General Partnership: In a general partnership, two or more individuals own and manage the business together. The partners share profits, losses, and liabilities equally, and each partner is responsible for the other’s actions. This structure is relatively easy to set up, but personal liability can be a concern, just like the sole proprietorship.
Corporation: A corporation is a separate legal entity from its owners (shareholders). This structure provides personal liability protection for its owners and can issue shares to raise capital. However, corporations are more complex to establish and maintain, and they can face double taxation (taxed at the corporate level and again when profits are distributed to shareholders as dividends), but they can elect to be taxed as an S corporation, which avoids double taxation by passing income, deductions, and credits through to shareholders.
Related: How to form a Nevada corporation
Limited Liability Company (LLC): An LLC is a hybrid structure that combines the limited liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership. LLCs are flexible in terms of management and ownership, and they are relatively easy to set up and maintain.
Related: How to form an LLC in Nevada
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
It is important to research what licenses are necessary for your particular business before starting operations in Nevada. By understanding what licenses are required and following the application process correctly, you can ensure that your business is operating legally in the state of Nevada.
While the needs of each business are different, here are some common business registrations.
Business Licenses: Every business operating in Nevada must obtain a Nevada state business license from the Nevada Secretary of State. In addition, many cities also require a business license to operate.
Business Name Registration: A sole proprietor or partnership operating under a trade name or fictitious business name like John Smith’s Handyman Service, Mr. Handyman, etc., will need to file a Fictitious Firm Name registration, also known as a DBA or Doing Business As with the county clerk’s office in the county where the business will be located.
Employer Registration Number: Partnerships, corporations, multi-member LLCs or any entity with employees will need to register for an Employer Identification Number. The EIN (sometimes referred to as the Federal Employer Identification Number or FEIN) 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.
Seller’s Permit: Businesses selling products and certain services will need to register for a Sales Tax Permit with the Nevada Department of Taxation.
Occupational Permits: Some occupations, such as contractors, child care providers, cosmetologists, and others, require permits in Nevada. While this isn’t a license on the business, permits are required in order to operate.
Step 5: Open a Business Bank Account
Keeping business and personal funds separate is important for a few reasons. First, it helps to ensure that you are able to accurately track your business expenses and income, making it easier to file taxes at the end of the year. Second, especially for corporations and LLCs, keeping your business and personal funds separate can help protect your personal assets from any potential liabilities that may arise from your business operations. Finally, having a clear distinction between your business and personal finances can help you maintain better control over your spending habits and budgeting decisions.
Step 6: Find Financing
Securing the necessary capital to start and grow your business is a critical step, and understanding your options can help you make an informed decision. Here are some funding sources to consider:
Conventional Bank Loans: Traditional banks offer various loan options for small businesses, such as term loans, lines of credit, or equipment financing. To qualify, you’ll need a strong credit history, a solid business plan, collateral, and a personal investment of typically between 15% and 25%. Banks may offer competitive interest rates and terms, but the application process can be rigorous.
SBA Loan Guarantees: The Small Business Administration (SBA) offers loan guarantee programs, such as the 7(a) loan program, which can help you secure financing from participating lenders. These programs reduce the risk for lenders, making it easier for small businesses to obtain loans. SBA loans typically offer longer repayment terms and lower interest rates than conventional loans but may require more paperwork and a longer approval process.
Microloan Programs: Microloans are small, short-term loans designed to help startups and small businesses with limited credit history or collateral. In Nevada, organizations like the Nevada Microenterprise Initiative (NMI) or the State Small Business Credit Initiative (SSBCI) offer microloans to eligible businesses. These programs often provide business training and technical assistance along with the loan.
Investors: There are various types of investors who may be interested in funding your business, such as angel investors, venture capitalists, or even friends and family. Investors typically provide capital in exchange for equity (ownership) in your business. To attract investors, you’ll need a compelling business plan and a strong pitch that demonstrates the potential for growth and profitability.
Step 7: Hire Employees
Hiring employees is a complex and often overwhelming process for a new business owner as there are multiple agencies to register with and labor laws to understand.
The first step is to develop an understanding of the laws and regulations that apply to employers in Nevada. This includes understanding minimum wage requirements, overtime pay rules, and other labor laws that must be followed. It is also important to understand the tax implications of hiring employees in Nevada.
Employers are also responsible for reporting new hires, verifying employees are eligible to work in the U.S., income tax withholding, unemployment insurance, unemployment taxes, and payroll withholding taxes, including Social Security and Medicare.
Step 8: Obtain Business Insurance
As a small business owner in Nevada, it is important to understand the importance of business insurance and the types of policies that are available. Business insurance can help protect your business from financial losses due to unforeseen events such as property damage, lawsuits, and other liabilities. In addition, having the right type of insurance can also provide peace of mind for you and your employees.
Every business has different needs, but here are some key types of insurance policies to consider when starting your business in Nevada:
General Liability Insurance: This insurance protects your business against claims related to bodily injury, property damage, and personal or advertising injury. It is essential for businesses that interact with customers, suppliers, or the public.
Property Insurance: Property insurance covers your business’s physical assets, such as buildings, equipment, furniture, and inventory, in case of damage or loss caused by fire, theft, vandalism, or natural disasters. This coverage is crucial for businesses with significant investments in physical assets.
Workers’ Compensation Insurance: In Nevada, businesses with one or more employees are required to carry workers’ compensation insurance. This policy covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses.
Commercial Auto Insurance: If your business owns, leases, or uses vehicles for work purposes, commercial auto insurance provides coverage for accidents, theft, and other damages involving those vehicles.
Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, this policy protects businesses that provide professional services or advice against claims of negligence, errors, or omissions. It’s especially important for businesses such as consultants, accountants, or lawyers.
Step 9: Track Income & Expenses
Bookkeeping is an essential part of operating a successful small business. By keeping accurate and up-to-date financial records, you are not only better prepared to deal with taxes, but you can better understand your company’s financial health, monitor cash flow, and make important decisions related to budgeting and investing.
There are several types of records that small business owners need to maintain in order to manage their finances effectively. This includes sales receipts, accounts payable and receivable, payroll records, bank statements, invoices, tax documents, and any other financial documents related to the business’s day-to-day operations.
One way to efficiently organize this information is by using accounting software such as QuickBooks or Xero, which allows you to track income and expenses easily. You can also establish a paper filing system by assigning each type of document its own folder or binder for easy retrieval when needed. Finally, if you don’t have the time or resources to handle the bookkeeping process in-house, consider outsourcing it to an experienced professional who can help ensure accuracy and provide valuable insights on how to improve your organization’s financial performance.
Related: Setting up accounting for a business
This material is property of StartingYourBusiness.com
Common questions when starting a business in Nevada
Is Nevada a good state to start a business?
Starting a small business in Nevada can be an exciting and rewarding experience. The state is known for its strong economy, low taxes, and friendly regulations, making it an attractive destination for entrepreneurs.
Nevada also has a diverse range of industries, from tourism to technology, that offer plenty of opportunities for small businesses.
What are the steps to starting an LLC in Nevada?
There are three main steps to starting an LLC in Nevada. 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 learn, so check out our guide on how to start an LLC in Nevada.
How much does it cost to start an LLC in Nevada?
The cost to start an LLC in Nevada is $425 to file the Articles of Organization with the Nevada Secretary of State.