The Utah economy is booming and showing no signs of slowing down. The state has the fastest-growing population in the country and is regularly named one of the best states for business. Why? Strong, pro-growth government policies and a commitment by entrepreneurs to create small businesses that find lasting success.
Want to be part of the progress? Read this guide to starting a business in Utah.
How to start a business in Utah
- Create a Utah business plan
- Name your business in Utah
- Understand Utah zoning
- Choose a Utah business entity
- Register your business in Utah
- Set up Utah business bank accounts
- Secure startup capital
- Research Utah licenses and permits
- Purchase Utah business insurance
- Invest in software tools
- Research your Utah tax obligations
- Grow your Utah team
1. Create a Utah business plan
A business plan allows you to bring your business idea to life, because it forces you to think through things like costs, goals, competition, and more. Your business plan will also act as a guide as you grow your business, and investors and lenders will ask for it before they give you any money.
A great business plan can help you:
- Determine your startup costs
- Define business goals in the short and long terms
- Understand your competition and your own competitive advantage
- Develop growth strategies
- Identify potential customers
- Create a basic marketing plan
- Brainstorm additional revenue streams
- Attract investment
2. Name your business in Utah
In Utah, sole proprietors and general partners can use their legal names as their business names. All other types of businesses must select a name that conforms to Utah Business Name Conventions and Policies.
If you’d like to operate under a different name, you can choose to apply for a “doing business as” (DBA) name, also known as a trade name or assumed name in some jurisdictions.
How to name a business in Utah
- Check availability. Use the Business Search tool to perform a business name search to check if the business name you want is available.
- Claim the name. If the name you want is available, you can claim it when you register your business.
How to reserve a business name in Utah
You can reserve a business name in Utah for 120 days and a filing fee of $22.
3. Understand Utah zoning
Zoning codes are intended to separate harmful or disruptive land uses from residential and commercial areas. Chances are good that your chosen business location will be restricted to a certain extent by zoning laws, so it’s important that you understand them before you set up shop.
Zoning in Utah is determined at the local level. You will have to check with your county or city zoning office to find out if you can operate your business type at your desired business address. For example, zoning in Salt Lake City is handled by the Planning office.
4. Choose a Utah business entity
A business entity defines how an enterprise is formed, organized, and managed, how profits are distributed and taxed, and more. Business entities are sometimes called business structures, legal structures, or legal entities in other states. Every business in Utah must choose a legal entity during the registration process.
You can learn more about legal structures in our guide to business structure types but be sure to work with a CPA or business attorney to determine which one is best for you.
In Utah, you can register one of these entities:
- Sole proprietorship
- General partnership
- Limited liability company
- Limited liability partnership
- Limited liability limited partnership
- Limited partnership
It’s easy to get started as a sole proprietor. But other business structure types, like a Utah LLC, can give you added liability protection that can keep your personal assets safer in the event of unexpected litigation or financial debt. You can find more detailed information on each type of business entity from the Utah Commerce Division of Corporations and Commercial Code.
5. Register your business in Utah
To register your business in Utah, you’ll need to complete several steps with administrative bodies at the federal and state levels.
Here’s an overview of what to expect:
- Elect or hire a commercial registered agent. This is an individual or corporation with a physical address in Utah who is responsible for receiving and distributing legal communications on behalf of your business. You can learn more about registered agents from the Utah Commerce Division of Corporations and Commercial Code.
- File forms. Depending on your legal structure, you will need to file several forms using the OneStop Business Registration system.
- 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.
Registering a business is not always an easy task so we recommend hiring a business accountant or CPA to help you get through it.
How much does it cost to register a business in Utah?
Generally it costs less than $100 to register a business in Utah, and fees will depend on your chosen business structure. For example, a general partnership costs just $27 to register. You can find a full filing fee schedule for every business type in the Utah Commerce Division of Corporations and Commercial Code.
6. Set up Utah business bank accounts
Using a business bank account to keep your personal finances and business finances separate may be a requirement of your business registration. But it will also help you track all business expenses and streamline business taxes.
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.
You should open a checking account that will allow you to conduct daily business transactions. A savings account is also a good idea so you can set aside profits or save for tax time. And a business credit card will help you build a positive credit rating for your organization—provided you pay it off in full each month.
Check out all the financial institutions available to you, whether local, credit union, or national. Many have regular promotional offers that could be advantageous to your business.
7. Secure startup capital
Some entrepreneurs have enough personal savings to start a business without help. If that doesn’t sound like you, don’t despair, there are other funding options available.
Consider the following startup capital options:
- Equity partners
- Friend or family loan
- Small business bank loan
- Government grants
- SBA loan or grant
- Angel investment
Before you start looking for capital, make sure you have a well-crafted business plan that includes your business’s capital requirements.
8. Research Utah licenses and permits
It’s likely that you’ll need to apply for licenses and permits at the federal, state, and local levels in order to operate your business.
See which Utah business permit and licensing requirements apply to your business:
- For federal regulation, check the SBA’s licenses and permits page.
- Utah does not require a general business license. Instead, licensing is administered by local governments. Check with the county clerk or city government in your area for more information.
- Professional licensing is handled by the Utah Department of Commerce Division of Occupational and Professional Licensing.
- Some products require an additional license or permit to allow legal sales, such as alcohol, which is administered by the Utah Department of Alcoholic Beverage Services.
9. Purchase Utah business insurance
Businesses of all kinds need insurance to protect them in case of liabilities. Even businesses without anything to steal or damage could be subject to legal proceedings in cases of injury or malpractice, so be sure to protect yourself with the appropriate insurance coverage for your enterprise.
Businesses commonly need these types of insurance in Utah:
- 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 software tools
Small business ownership comes with a lot of administrative work that can take up a huge portion of your time. You can limit the time lost to business processes by setting up some simple software tools that will take care of the grunt work for you.
Consider using software to speed up these tasks:
- Invoicing. Automate your invoicing with a free invoicing software and accept credit card payments to save time and hassle for you and your clients.
- Customer reviews. Your reputation online isn’t just a matter of hoping for the best. Durable provides an online review management tool to help you build a good name for your business.
- Customer relationships. To provide the best possible service, you need to know 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 free 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.
These are just a few of the tools available to you and chances are there are other processes in your business that can be automated quickly and easily. Be sure to look online to see what kinds of tools are waiting to help you find success.
11. Research your Utah tax obligations
If you’re not an accountant, be sure to work with a CPA when determining your tax responsibilities. You will have to pay taxes at local, state, and federal levels, and it can get complicated, so professional expertise can be a big help.
Here are some key business tax obligations in Utah:
- Corporate income tax. The Government of Utah levies a 4.85% corporate income tax on businesses operating in the state.
- Sales and use tax. You will likely need to collect a 4.7% sales and use tax on behalf of the state. Local jurisdictions are permitted to collect an additional 4% sales tax on top of the state tax, for a maximum rate of 8.7% in some areas.
- Withholding tax. If you have employees, you will need to withhold income tax from them.
For complete tax information, consult the Utah State Tax Commission.
12. Grow your Utah team
It can be complicated to hire employees. That’s why many small businesses choose to work with independent contractors when their operations are new.
If you need to hire full- or part-time employees, make sure you are set up to receive them long before you start the hiring process. Federal and state governments have employment requirements, and you’ll need to comply with them all.
Keep these employer responsibilities in mind:
- Obtain an EIN. You must have an EIN from the federal government to hire employees.
- New hire registration. You must register with the Department of Workforce Services and report newly hired employees.
- 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.
You can get a complete breakdown of employment laws from the Department of Workforce Services.
Ready to start a business in Utah?
Utah is growing. Are you ready to grow with it? The state government is committed to encouraging small businesses, helping them thrive with funding programs, a thriving business climate, and a convenient one-stop business registry. All you need to do is follow the steps in this guide to learn how to start a business in Utah.
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!