Rugged coastlines, dusty dunes, and craggy mountains: Oregon is known for its extreme landscapes. But perhaps the state is best recognized for being extremely unique, thanks to its largest city, Portland.
Incubator to all kinds of distinctive entrepreneurs, Oregon is a place where anyone with a great idea can launch a successful business. Are you that person? Read this guide to starting a business in Oregon to find out.
How to start a business in Oregon
- Create an Oregon business plan
- Name your business in Oregon
- Check Oregon zoning regulations
- Choose an Oregon business structure
- Register your business in Oregon
- Set up business bank accounts
- Acquire startup funding
- Research Oregon licenses and permits
- Purchase Oregon business insurance
- Invest in business automation
- Research your Oregon tax obligations
- Grow your operation
1. Create an Oregon business plan
A well-crafted business plan is essential to the success of your operation, because it forces you to think deeply about things like startup costs, business and personal goals, and your target market.
A detailed business plan can help you:
- Calculate your startup costs
- Understand ongoing business expenses
- Set your business goals
- Identify your competition
- Build growth strategies
- Outline your ideal customer
- Develop short and long-term marketing strategies
- Conceive additional revenue streams
- Attract funding
If you need help writing your business plan, you can find free templates and other great business resources from the State of Oregon Business Xpress as well as the federal Small Business Administration (SBA).
2. Name your business in Oregon
Sole proprietors and general partners in Oregon are allowed to use their legal name(s) as a business name. Other business structures, such as LLCs and corporations, must choose a name during the registration process that conforms to state naming rules.
If you want to do business under a different name, you can register an assumed business name, which is also called a “doing business as” (DBA) name or trade name.
How to name a business in Oregon
- Check the availability of your preferred name using the Business Name Search tool.
- If the name is available, you can claim it at the time of business registration.
How to reserve a business name in Oregon
If you want to hold onto an available name but you aren’t ready to register your business yet, you can reserve it for 120 days by filling out this form from the Oregon Secretary of State and paying a $100 name reservation filing fee.
3. Check Oregon zoning regulations
Regardless of where your business is located, it’s likely that zoning will affect your operation. Zoning laws are meant to keep disruptive property uses away from residences and shopping areas. But even mobile and home-based businesses are affected by zoning regulations. So it’s important that you understand the restrictions that impact your business location.
Zoning in Oregon is the responsibility of local governments. Be sure to check with yours before deciding on a business address. For example, zoning in Portland is handled by the Department of Planning & Sustainability.
4. Choose an Oregon business structure
Businesses in Oregon must operate as one of several business structures. Also called a business entity legal entity, or legal structure, business structures define how your business is organized, what kind of protections you have from liabilities, and how profits are distributed and taxed.
You can choose from these business structures in Oregon:
- Sole proprietorship
- General partnership
- Limited partnership
- Limited liability partnership
- Limited liability company
Hire a CPA to help you choose the right business structure for your business.
5. Register your business in Oregon
When you’re ready, you’ll need to register your business by filing forms, filling out applications, and paying fees to the various agencies involved. The tasks that you’ll need to complete will vary according to your business structure and the service that you’ll be providing, but in most cases, you can expect to:
- Elect or hire a registered agent. This is an individual or corporation with a physical address in Oregon who is responsible for receiving and distributing legal communications on behalf of your business. You can learn more about registered agents from the Oregon Secretary of State.
- File forms. Depending on your legal structure, you will need to file several forms with the Oregon Business Registry.
- Set up a Federal Employer Identification Number (FEIN or EIN). This is a federal tax registration requirement. You can sign up with the IRS. You’ll need an EIN for paying taxes, setting up business bank accounts, and hiring employees.
Unless you’re a pro at filling out legal documents, filing formation documents, and making sense of business law, hire a business formation service or CPA to handle business registration on your behalf.
How much does it cost to register a business in Oregon?
Most domestic business entities can be registered for a $100 fee in Oregon. There are likely to be additional fees for items such as trade name registration or registered agent declaration. You can find a complete fee schedule from the Secretary of State.
6. Set up business bank accounts
It is advisable to keep your business and personal finances separate by opening a business bank account. Your legal structure may afford some protection to your personal assets, but separating your operational funds gives you an extra layer of defense against financial liabilities. It may also be a requirement of your business registration.
You will need the EIN you created with the IRS to open a business bank account. It works like a social security number except for your business.
Open a checking account to handle everyday business banking, a savings account to save for tax season or set aside profits, and a business credit card to build a healthy credit rating for your operation.
7. Acquire startup funding
You may find that you have enough personal savings on hand to get your business up and running. If not, there are other funding options available to you.
Consider the following sources:
- Equity partners
- Friend or family loan
- Small business bank loan
- Government grants
- SBA loan or grant
- Angel investment
The Government of Oregon has a slate of helpful business development programs that they have collected on one convenient Business Oregon page, including grants, tax incentives, and more.
Keep in mind, not every business type can benefit from startup funding. Before you start applying for funding, make sure your business plan has a robust calculation of your startup costs.
8. Research Oregon licenses and permits
Depending on the type of business you’re starting, you will likely need licenses and/or permits at the federal, state, and local levels.
To determine the licensing requirements that apply to your business, check these information sources:
- Federal. For federal regulation, check the SBA’s licenses and permits page.
- State. Search the Oregon License Directory to find out what kinds of permits and licenses you might need, including professional licenses.
- County. County business licenses and permits could apply to your business, so don’t forget to check with the county clerk in your area for more information.
- Local. At the local level, consult city hall or the local chamber of commerce to learn about and apply for business licenses and permits. For example, the City of Eugene does not ask you to get a general business license, but it does require you to apply for one if you are a solid waste hauler or payday lender.
9. Purchase Oregon business insurance
Your business needs insurance even if you don’t sell any physical products or operate brick-and-mortar premises. Liabilities and legal action that result from doing business can threaten your livelihood, and insurance is one of the best forms of professional and personal liability protection.
Here are some types of insurance you may need:
- Worker’s compensation coverage. Applicable if you intend to hire employees.
- Property insurance. Do you own the building where you do business? You probably need property insurance.
- Automobile insurance. Many service providers are mobile so their vehicles must be insured as part of their businesses.
- Professional liability insurance. In the course of your business operation, you may encounter claims of negligence, copyright infringement, personal injury, and other liabilities related to your services. Professional liability insurance can protect your assets.
10. Invest in business automation
Before launching your new enterprise, it’s a good idea to set up some software tools that will take care of some of your administrative workload, freeing you up for other tasks.
Use software to streamline these aspects of your business:
- Invoicing. Automate your invoicing and accept credit card payments to save time and hassle for you and your clients.
- Review management. Your positive reputation won’t happen by accident. Durable provides a review management tool to help you actively build a good name for your business.
- Customer relation management. To provide the best possible service, you need to understand your customers. A customer relationship management (CRM) platform tracks every interaction you have with clients so that you can give them exactly what they need at just the right time. Durable’s CRM automates many of these types of interactions, helps you stay organized, and it’s free.
- Scheduling. If you’re a service provider or business owner who has to book appointments with clients, you know that it can be a headache. Take the pain out of scheduling with an automated tool like Calendly or MeetFox.
There may be other aspects of your business that can be easily automated. A quick search online is almost certain to reveal a tool that can save you time, money, or stress, so don’t hesitate to have a look.
11. Research your Oregon tax obligations
Work with a CPA to understand your business tax requirements, including which taxes you have to pay, deadlines, and more. Taxes must be paid at federal, state, and local levels, so help from a professional is likely to save you time and money during tax season.
Here are some key business tax obligations in Oregon:
- Corporate excise tax. Most businesses are required to pay income tax to the state separately from the income tax paid to the federal government.
- Corporate Activities Tax (CAT). Businesses making more than $1 million must pay the CAT.
- Sales tax. While Oregon does not assess a general sales tax, there are a few exceptions that affect vehicle and online sales that may affect your business.
- Withholding tax. If you have employees, you will need to withhold income tax from them.
- Local tax. Some local city and regional governments may levy additional taxes on your business. Consult the revenue department in your area to find out what your obligation is.
- Specific business taxes. Some specific products and types of businesses are assessed additional taxes by the Department of Revenue, such as marijuana.
For complete tax information, consult the Oregon Department of Revenue.
12. Grow your operation
As you see success for your business, you may find that you want to expand your team. Many small business owners find that working with independent contractors is a convenient way to increase human resources without having to jump through the hoops of the hiring process.
If you decide you need full- or part-time employees, be aware that there are federal and state employment laws that you’ll need to comply with, and you should have your registrations set up before you start interviewing candidates.
Here are some employer responsibilities to keep in mind:
- Obtain an EIN. You must have an EIN from the federal government to hire employees.
- Report new hires. You must report new hires within 20 days to the Oregon Department of Justice.
- Verify employee eligibility. Once you start meeting with potential employees, you’ll need to verify that they are eligible to work in the United States by having them fill out this form.
Ready to start a business in Oregon?
With no corporate income tax or general sales tax, Oregon is ideally suited to business startups looking to maintain positive cash flow. And with Portland at the center of the Oregon economy, no business idea is too outlandish—so go ahead and get creative!
Once your business is set up, stick around and give Durable a try. Durable is a free platform with everything you need to start and grow a service business. Build your business website in minutes, and make invoicing, customer management, and review management a breeze.
Try Durable today—it’s free!
This guide is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Durable assumes no liability for actions taken in reliance upon the information contained herein.