Home » How to Start a Small Business » Starting a Small Business in Utah in 2024: Simplified Guide
Utah ranks in the top 10 of WalletHubs, Forbes, and CNBC’s “Best States to Start a Business in.”
The Beehive state’s consistency comes from lower than national average business costs, a friendly tax climate with a low 4.95% corporate tax rate, an educated workforce, and a robust economy (our nation’s strongest in 2022).
All combine to make Utah the 4th fastest growing state in the country, with Salt Lake City the 5th fastest growing city!
And with 99.3% of Utah’s businesses (324,821) being small businesses, with a first-year survival rate of 83.2% (again, above the national average of 81.6%), starting a business in Utah could be the best decision you’ll ever make.
But to start a business in Utah takes specific steps, all of which you’ll find right here, plus helpful government department links and funding programs.
Starting a business can be a daunting task, we created this simple step by step guide to help you get started easily.
Your first step in starting a business in Utah is choosing a business idea.
Take your time to explore different business concepts and niches. For example, will you sell a product or a service? On or off-line? Or combine both!
Also, make sure your idea suits your interests, skill sets, and passions because starting a business is a 24/7 commitment, and your motivation is 99% why it’ll succeed.
Mark Manson – Author of the best-selling book “The Subtle Art of Not Giving a F***” puts it this way:
“To want the benefits of something, you must also want the costs.”
Mark is saying to consider what you’ll need to give to your chosen business idea to ensure success before investing because your business will become an integral part of your life!
Once you have a business idea, evaluate its chances of success based on your target audience’s demographics and the needs and interests of your community.
To help you with that, here are some business ideas that often do well in Utah.
Accommodation, tourism, food services, construction, social assistance, and health care are the largest Utah employers; other popular Utah business ideas are:
Your next step is to run your business idea through a business plan to validate it and ensure it’ll be worth your investment.
A business plan is your entrepreneurial vision on paper, showing what your idea needs to start, how it’ll operate, and how it will make money.
It does it by calculating your startup costs, accessing your competition, defining your target audience, and identifying engaging marketing strategies.
It also gives prospective lenders the information they need to decide whether to invest in your business.
Two types of business plans exist, traditional and one-page, and both have 3 sections that help you validate your business idea.
Who are your customers, their demographics, and what wants or needs do they need satisfying?
You need those answers to confirm your business idea solves a problem people will pay for at the right price.
Market research answers those questions by surveying prospective customers, competitors, and industry trends.
Your marketing plan outlines your strategies for attracting your target audience by using the results from your market research over time to ensure you get the best returns from your advertising investments.
What`s your projected profitability?
Your business plan must answer that crucial question to show how, when, and how much money your business can make over a specific time (usually monthly, quarterly, and annually).
A financial plan includes 5 essential budgets:
Once you know your business idea is viable, it’s time to choose your location.
The right location is essential to most startups, especially those in the retail and food industries, which require a high footfall of passing trade, easy access, and adequate customer parking.
Your choice of location also depends on your target audience and must be in an area they expect to find it.
Utah isn’t short on options, with 5 cities in WalletHub’s top 10 list of “best small cities to start a business,” and 3 are in the top 5!
The best cities to start a business in Utah are:
Once you have a location in mind, check zoning laws by contacting your local planning/zoning department to ensure your business type can operate and which permits you might need.
Home-based businesses must also comply with zoning laws. However, most residential laws allow entrepreneurs to run a business from home if it’s non-polluting, doesn’t have regular customers, negatively affects neighbors, and the property’s primary use is residential.
Your business idea often determines whether you are an online-only business, a brick-and-mortar, or both. You can also start from one and expand later on.
Online business owners will need the following to operate and succeed in Utah:
Your next step is coming up with a catchy business name:
Your business name should be available as a domain, suit your niche and target audience, be memorable, easy to say and spell, and convey your brand’s purpose and principles.
Legal entities like LLCs must choose a business name before registering with the Utah Secretary of State.
While complying with Utah state’s business naming rules:
Sole proprietorships and general partnerships can use a doing business as (DBA) allowing them to use a brand name by applying online using the Utah Division of Corporations and Commercial Code portal or by mail using a paper application.
Before registering your business name with Utah state, run a federal and trademark check to avoid infringement upon one registered in another U.S. state.
A business structure is a legal or non-legal entity you run your business under, and you’ve several to choose from when you start a business in Utah.
Each structure has its benefits and disadvantages; let’s look and see which suits your startup.
Forming an LLC is a popular option for small and medium businesses, but there are other options to consider.
These business structures (including S corporations) avoid double taxation because they use the pass-through tax structure, which means all profits and losses pass to the owners, members, or shareholders, who report them on their tax returns.
Learn more here about starting an LLC in Utah.
Entrepreneurs who choose a formal business structure must register with the Utah Secretary of State. Sole proprietors and general partners (informal business structures) don’t have to do this.
Here’s how to register:
Okay, great. Once you’ve chosen your business idea, its name and registered it (in cases of formal entities) with Utah’s Secretary of State’s office, your next steps are setting up your business banking and accountancy systems, applying for funding (if needed), and meeting your business insurance requirements.
For more information on registering your business in Utah, visit the Utah Division of Corporation and Commercial Code website.
Running a new business requires wearing many hats, including bookkeeping. One way to simplify the process is to open a business bank account, as it separates your startup and personal finances. Other ways are using a business credit card and an accountant to help with your taxes.
I’ll explain why next.
Entrepreneurs forming a legal business structure (like an LLC) must separate their business and personal finances to protect their liability in cases of litigation or debt.
All business owners, however, can benefit from using a separate bank account, as it simplifies tracking your debits and credits and helps maintain a positive cash flow.
Besides a business bank account, credit cards help simplify your bookkeeping duties by separating your business and personal expenditures.
Business credit cards also help you build your startup’s credit profile, which can help you qualify for cheaper business loans and lines of credit.
An accounting system is essential for record-keeping and tax compliance for every business.
Most states require businesses to keep 3 years of financial records; to comply, you can use accounting software that integrates with your business bank and credit card accounts that record your invoices, working hours, and employee wages.
Most new businesses need funding to start and run until they profit. How you get financing depends on your chosen business structure, your credit history, and your collateral.
Fortunately, you have several funding options when you start a business in Utah.
New businesses that meet specific requirements can apply for Utah business grants and incentives, along with other investment programs; let’s look at what’s available:
As a new business owner, one of your goals is to minimize your expenditures while ensuring you have everything you need to operate.
Insurance is one of those expenditures, and which policies you need depends on your business type and Utah’s mandatory requirements.
Here are the most common types of business insurance:
When you start a business in Utah and hire employees, you’ll need workers’ compensation and unemployment insurance.
Licenses allow your business to operate, and permits enable you to provide specific services in certain locations.
Which ones you’ll need depends on your niche and location. For example, 2nd hand stores will need a reseller’s license, a home-based bakery will need a health and safety permit, and a restaurant will need a liquor license to serve alcohol.
Licenses come in 3 levels, while permits are local; follow the below links to see which your business needs:
Okay, now for everyone’s favorite subject: tax!
When starting a business in Utah, your first tax requirement is registering with the state using the OneStop Business Registration online application service.
Next, talk with a Utah accountant to ensure you comply with local, state, and federal tax obligations.
New businesses are often liable for federal, state, and local taxes, and some others, depending on your business operations, such as:
Visit the Utah State Business Income Tax webpage for more information on state and local business taxes.
A business is only as good as those who help run it.
For example, if you need employees to interact with your customers, you must ensure they appropriately represent your brand. Behind the scenes, you might need an experienced Utah accountant or marketing professional.
You can hire people with the skills you need on a project basis, such as freelancers or contractors, to reduce your expenditures and liability. But for part or full-time employees, you must comply with Utah’s hiring and payroll regulations.
Business owners hiring Utah employees must report them within 20 days to the Utah Department of Workforce Services (DWS) using the Utah New Hire Registry reporting form.
Payroll regulations ensure employees comply with federal, state, and local laws that govern how they pay their employees. Employers who violate these laws can face stiff penalties or, sometimes, jail time!
In Utah, payroll regulations include:
Using payroll software is a proven way to help comply with your employer’s payroll duties. Another is to hire contractors!
Hiring contractors is a great way to get the skills or services your business needs without the expense of hiring full-time staff.
But in Utah, you must classify your contractors correctly; this means you can’t report an employee as a contractor to avoid your employer’s payroll obligations.
So, what is a contractor?
Contractors are independent individuals who engage in a profession, occupation, trade, or business similar to the services they provide (i.e., a plumbing contractor offers a plumbing service) and must be free from an employer’s control while performing their services.
Marketing is how you create brand awareness, drive growth and profit, attract and keep customers, and enhance your target audience engagements.
Effective marketing strategies suit your business type, ideal clients, and, most importantly, your budget.
Here are 6 worth considering:
Your business is the new kid on the block, and as consumers choose brands they already know or trust, you’re in a chicken-and-egg situation! So, how do you get that trust when you don’t have customers or reviews?
You can overcome this problem by offering special discounts that are too good to ignore, like opening day sales, group discounts, buy-one-get-one-free offers, flash sales to create urgency, and loyalty programs.
A mailing list is a collection of people’s email addresses you use to build trust by sending regular newsletters; think of it as a personal conversation between you and your ideal clients via their inbox.
You collect those emails using an opt-in box on your website and convince people to provide their addresses by offering free, unique content that helps solve some of your target audience’s problems.
Speaking of content, let’s look at what it means and how it works next:
Do you know the saying, “You’ve got to give to receive?” Well, in sales, it’s vital.
Marketing legend Zig Ziggler describes how it works perfectly:
“Give people tons of free value, and they will want to give you money.”
It’s that simple and removes the 2nd hand car salesman vibe from your marketing strategies.
All you do is provide your target audience with your unique, helpful content, and they’ll naturally associate your brand with the one that can fix their problems.
With this technique, your email list is paramount, but you can also showcase your content on platforms like TikTok, Facebook, Instagram, and YouTube, where your viewers can like and share it with their community.
Partnering with local businesses is another powerful way to create the trust you need to convince your target audience to choose your brand over your competitors. It also works online by using social influencers to promote your products or services.
Look for brands that provide a product or service complimentary to your own (known as indirect competitors), then join forces to promote each other’s businesses to one another’s customer base.
Did you hear about the new restaurant that opened on French Street? It’s amazing.
That’s Word-of-mouth marketing.
One person tells another about a service or product they bought or used in a positive light. That person then uses your brand because they trust their friend’s recommendation.
You invest in WOMM by providing excellent service, products, and aftercare sales.
Whether you’re an Amazon seller, a local restaurateur, or an Airbnb host, every business needs positive reviews to convince prospects to choose them over their competitors.
Your job is to ensure you get reviews every time someone buys your products, uses your establishment, or hires your service by asking customers to review you and providing them with links to all your review platforms, such as Google My Business, on your website, on independent review sites, and social media accounts.
You have 2 choices when launching your business in Utah: sit back and wait for people to find you, or be proactive and throw a party, and everyone loves a party!
Traditionally, big brands throw launch events to create a buzz around a new product or service. However, any business can do it to create local awareness of their opening and make those first sales.
How to throw a launch event:
Registering an LLC or corporation costs $54.
Utah state business formation times vary depending on the entity type, time of year, and volume of applications; however, it usually takes 5 to 12 working days.
Utah doesn’t have a state-wide business license, but most counties and cities do.
Yes, businesses selling tangible goods and properties or providing certain services need a seller’s permit.
Out-of-state companies can register in Utah by applying for a foreign qualification with the Utah Secretary of State.
Anyone over 18 with a Utah state physical address available to receive mail during working hours can act as their business’s registered agent.
And that’s how to start a business in Utah.
Remember to begin by validating your business idea, then follow our steps and take advantage of available Utah business grants and incentives, and before long, you`ll be in business.
I’ll leave the last words to a marketing genius.
“You can have everything in life you want if you just help other people get what they want.”-Zig Ziggler.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
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