If you're wondering how to start a business in Florida, you’ll be glad to learn that the state has a lot more going for it than beautiful beaches and warm weather.
With the second highest density of start up businesses in the US, Florida consistently ranks among the best states in the US for business, largely thanks to its favorable state tax policies, competitive costs, and streamlined regulatory environment.
Here are the steps you’ll need to take to start a business in Florida.
Checklist for starting a business in Florida:
1. Create a business plan
2. Choose a business structure
3. Get an EIN
4. Register a business name
5. Register your company
6. Choose a location
7. Set up your business to pay taxes
8. Get a business license
9. Fund your business
10. Get business insurance
11. Hire employees
12. Open a business bank account
1. Create a business plan
When starting a Florida business, or any business for that matter, it’s essential to organize your ideas and avenues to profit through a well-drafted business plan. When you create a business plan it should give you greater insight into start-up costs, competition, and specific strategies towards profitability.
A properly thought out business plan will help you define both short and long-term goals, and set the overall direction for your new venture. Having a business plan is also a key resource when recruiting or raising capital.
2. Choose a business structure
Before you can start your business in Florida, you’ll need to choose the right business structure (aka business entity) for your service business.
The types of business entities in Florida include:
- Sole proprietorship
- Partnership (general, limited, and limited liability)
- Limited liability company
- Corporation (C corporation, S corporation)
Each business entity comes with its own set of pros and cons, so we recommend starting with this guide to business structures, and then working with your attorney or CPA to figure out the option that’s most advantageous to your business.
3. Get an EIN or FEIN (if necessary)
A Federal Employer Identification Number (FEIN) or Employer Identification Number (EIN) is a number the IRS assigns to your business. An EIN is essentially the equivalent of a social security number for your business.
If you need an EIN, you can obtain an EIN by filing Form SS-4 with the IRS. Just note that not all businesses need an EIN in Florida.
You will need an EIN in Florida if:
- You plan to form a corporation or partnership in Florida
- Your business will hire employees
- Your business will need to file Employment, Excise, or Alcohol/Tobacco/Firearms tax returns
- Your business will need to withhold taxes on income (other than wages) paid to a non-resident alien
- You have a Keogh plan
- You are involved with an estate, real estate mortgage investment conduit, trust, non-profit, farmers co-op, or plan administrators
If you have a Florida LLC and your company does not fall into any of the above categories, you are not required to file for an EIN (unless your bank requires an EIN to open a business account).
4. Register a business name
Once you’ve chosen a business structure, the next step is to register a business name in Florida. Try to pick a name that's unique, memorable and effectively captures the essence of your business.
Registering a Florida Fictitious Name for sole proprietorships
If you're a sole proprietorship in Florida and operating with your full name—Michael Johnson, for instance—there is no need to file for a Florida Fictitious Name filing. If, however, you decide to operate the business under a Fictitious Name (also known as a trade name or Doing Business As/DBA) such as Michael Johnson’s Plumbing Company, Johnson and Co, etc., you must register the potential business name by filing a Fictitious Name Registration (DBA) with the State of Florida.
Apart from state filing, the registered name must be advertised at least once in a newspaper located within the county where your business operates. Evidence of the advertisement is not necessarily mandatory, but you will have to sign an application that certifies the name has been advertised.
The fee to register a Fictitious Name in Florida is $50.
Registering a Florida business name for a general partnership, corporation, or LLC
General Partnerships, Corporations, and LLCs have to select a business name when filing for the respective entity and the latter has to be distinctively named. This is merely establishing your LCCs formal legal name. Note that registering the entity name will not afford you much legal protection from others from using the name, other than being able to register with the Secretary of State. Check the availability of Florida business names before you move ahead with the registration process.
Legally protect your business name
A trademark will legally prevent others from using names, slogans, or logos that you have obtained. The U.S. Patent & Trademark Office (USPTO) manages the registration of trademarks. Before deciding on a name with finality, you must first check that the name you desire to use isn’t already registered to another business. You can also register with the trademark office to keep others from using the name of your business, product, or service. Companies often use a shorter version of their business name as a trademark.
5. Register your company
You can find all the necessary forms for registering your business online at SunBiz.org. Most forms can be submitted online, too. These forms cover the basic, minimum statutory filing requirements. Though, depending on the nature of your service business, you may need to file additional items.
When you register a company in Florida, you need to supply basic business information, list the owners’ names, and pay the filing fee.
The fees for entity registration in Florida are:
- For profit corporation: $87.50
- Limited liability company: $160
- Non profit corporation: $87.50
- Limited liability partnership: $1061.25
Partnerships are more expensive to register. View the fees for registering a partnership in Florida and the full fee obligations on Sunbiz.org.
6. Choose a location
Choosing the right location can be one of the most crucial aspects to your business’ success. Perhaps you’d like to run a business out of your home office, or maybe you’ve been dreaming of opening something on the main street in your hometown for years. But not all locations are created equal.
Take into account important aspects like county or city taxes, zoning requirements in Florida, and where you’ll be able to cultivate the best customer base.
From Jacksonville to Miami, think long and hard about where your business is best suited. Both licenses and permits and growth potential are ultimately dependent on your choice of location.
7. Set up your business to pay taxes
Paying taxes is an essential obligation in any business. The majority of businesses in the US pay federal, state, and local (and often city) taxes.
- Federal business taxes are collected by the IRS. These taxes generally include: income tax, estimated taxes, self-employment taxes, employment taxes, and excise tax. You are able to study all the mandatory taxes (for example, income tax is a requirement for all businesses with the exception of partnerships), notable exemptions, and all the necessary forms on the IRS website.
- State business taxes are collected by Florida’s Department of Revenue. They generally include: sales and use tax, reemployment (once known as unemployment) tax, corporate income tax, and other taxes. You have to register to collect or remit taxes online. You can register here.
- Local business taxes are collected by county tax collectors. Each county makes you pay taxes to operate within them. Here’s a list of Florida’s county tax collectors. Get in touch with yours for additional information or queries.
- City business taxes aren’t necessarily collected by every city in Florida, but certain places require you to pay taxes in order to operate within their jurisdiction. The municipal directory can assist you here; you can also contact your city officials for more information.
8. Get a business license (if necessary)
Before you launch your business in Florida, get familiar with the specific licenses your business needs; these will vary depending upon the nature of your business or service as well as location.
There are two primary licensing agencies for skilled trades: The Department of Business and Professional Regulation (DBPR) and The Department of Agriculture and Consumer Services (DACS).
The Department of Business and Professional Regulation (DBPR) provides licenses for a broad variety of professional services, some of these include: architects, barbers, geologists, home inspectors, restaurants and bars, and veterinarians.
The Department of Agriculture and Consumer Services (DACS) licenses a wide variety of businesses from private investigators to pawn shops to beekeepers to telemarketers. The comprehensive list is here.
Keep in mind, these aren’t the only licensing agencies in Florida. Businesses in or related to health professions (which can include tattoo artists as well as nurses and pharmacists) and those providing other services like financial services or daycare will need to contact other agencies.
Sales tax permits are relevant for companies selling products or certain services. These businesses will need to register for a Sales Tax Permit with the Florida Department of Revenue.
Licensing is moderated by the Florida Department of Business and Professional Regulation and the Florida Department of Agriculture and Consumer Services. In addition, it’s possible that you will need a license to operate from one of Florida’s state agencies or from one of these other licensing agencies.
There is no central licensing system in Florida, so assess thoroughly which licenses are most applicable to your business before you open up shop; it’s advisable to consult with an attorney to avoid potential issues.
9. Fund your business
Gathering enough funds is obviously a necessary part of opening a business in Florida or anywhere else. If you are in need of extra capital to get going, there are a number of options in Florida. Between crowdfunding, SBA loans, credit cards, and short-term loans, if you are resourceful, finding capital should be quite achievable.
Florida's Small Business Development Center is an ideal platform to start your search. They give free financial advising for new entrepreneurs and can assist you in selecting which funding options suit you and your business. Be mindful that not every small business loan will be available to a new business owner, but the Small Business Development Center should point you in the right direction.
If a business loan, however, is too much of a commitment or carries too much risk for you, another viable option is a business credit card with a 0% APR introductory rate. A 0% rate can act as an interest-free loan while you're starting up, as long as you pay back what you owe before your introductory period ends.
From conventional bank loans, Small Business Administration (SBA) loan guarantees, investors, grants, and many others, there are a number of options to gain capital as a business owner.
10. Get business insurance
Protecting your business from liability is crucial. Some insurance may even be mandatory, depending on the nature of your business.
Here are some of the common types of small business insurance recommended and required in the state of Florida:
Workers’ compensation insurance
This is required in Florida if your business employs four or more people. Workers’ compensation covers medical costs of employees who become injured or sick on the job.
General insurance
By far the most common business insurance coverage, general insurance protects against third-party bodily injury and property damage, as well as personal and advertising injury.
Commercial auto insurance
You’ll need this insurance coverage if you utilize your car or vehicle to deliver supplies or travel between job sites.
Professional liability
Florida businesses that provide professional services should strongly consider this coverage. It protects businesses from claims of professional negligence, both actual or alleged, and helps pay for legal defense costs. It’s also often called errors and omissions insurance (E&O).
Business owners policy
A BOP combines property and liability coverage into one easy-to-manage policy. It’s frequently used among purveyors of small and medium-sized businesses that rent or own the building where they do business.
Learn more: What type of small business insurance do I need?
11. Hire employees
Here are the necessary steps you’ll need to take to hire employees in Florida.
Check local municipalities before you post your job
When you start advertising for job openings, it’s essential to be aware of the average salary or wage and the cost of living. The average salary in Florida is $60,000, and the average hourly wage is $17.75 according to PayScale. Florida’s cost of living is about the median in the US. As a point of reference, you should also keep an eye on other Florida job postings and compare salaries with your own.
When reviewing other posts, look for any trends in job titles, descriptions and keywords. These will likely be what people are searching for on job boards. To ensure that your job shows up in a candidate’s search, make use of the related keywords in your advert and provide a clear and intriguing job title.
Follow Florida hiring guidelines
As the applications come in, make sure to comply with Florida hiring guidelines. Finish the appropriate new hire forms, file reports on time, and create an efficient payroll system. Have an awareness of the type of employee you’ve hired; contractors, for instance, don’t need to be reported as they’re not technically employees, although they may act as such. Other kinds of employees, minors for instance, will have some restrictions to the tasks and duties they’re able to do and/or the types of reports required.
Florida new employee forms
When you hire new employees, you’ll have to complete the necessary Florida new employee forms; these include tax documents, payroll information and individual employment contracts. As an employer it is best to provide your new hire with a package inclusive of all the relevant information of their role.
Additionally, as an employer in Florida, you’re required to complete two forms for your own records. Complete IRS Form W-4 to withhold tax from employee pay and USCIS Form I-9 to verify an employee’s work eligibility in the United States.
Report all new hires to the Department of Revenue
It is mandatory to report all new employees to the Florida Department of Revenue within 20 days of their hiring date, including rehired employees that have not worked for 60 consecutive days; new hires must be reported even if they have not completed any work hours. New hire reports can be done online through the Services for Employers portal.
Set up payroll
Once you have successfully onboarded your employee and reported them to the appropriate government agencies, a payroll system must now be established. Certain types of payroll software can help you to manage your hours, records and other important information. Depending on your budget and time, you can do this or pass it on to an accountant.
You’ll also need to decide when your pay period starts and how often you’ll pay your employees, such as biweekly, monthly or bimonthly. Take into consideration how you manage pay variables and deductibles, such as health insurance, taxes and overtime.
Post required signage in the workplace
Employers in Florida are required by law to display federal and state employment posters outline employee rights and responsibilities. The details for the state posters are discussed here; and the details for federal posters are on the official Department of Labor website.
12. Open a business bank account
Unless you operate a sole proprietorship, you must open a separate business account to make it convenient and easy to track your income and expenses; as well as to isolate personal assets. (To be clear, although you are technically allowed to use your personal bank account for business use under a sole proprietorship, opening a business account is still strongly recommended.) In fact for some business types, like LLCs and corporations, a separate bank account is necessary to maintain your liability protection.
Some banks may also require you to obtain an EIN before you can open a business bank account. You’ll use your EIN in place of your social security number to indicate that this account is completely separate from your personal finances.
From there, opening a business bank account becomes a matter of personal preference. Figure out which bank works best for you based on their fees, location, level of service, and structure. Local, national, and neo banks all have their perks and privileges.
Acquiring a business credit card can also be a good move. Used properly, it can help you build your business’ credit history, which in turn can potentially help you raise extra capital later on.
The bottom line on starting a business in Florida
Despite the usual red tape, it is relatively easy to start a business in Florida—hence the high percentage of entrepreneurs. Filing fees are low, a large chunk of the registration process can be done online, and an ample supply of local resources are available to help you get started.
The state’s government keeps regulatory requirements and business taxes low. There are no personal income, capital gains ,or death taxes; many of the state’s higher education institutions even work closely with the business community to build programs that assist Florida industries.
Whether you’re a local resident who’s dreaming about starting a Florida business, or you’re an out-of-state entrepreneur looking to relocate to a warmer, tax-friendlier location, learn how to start a business in Florida with the steps in this guide.