New Jersey residents say the best things about New Jersey are the low crime rates, booming job market, and high quality of life.
And for good reasons.
The Garden State ranks 5th in WalletHub’s happiest states in the country and 4th for best healthcare in the US.
And it suits start-ups, ranking 1st in CNBC’s 2023 most-improved state for business.
In the current financial climate, more and more people are turning to side businesses or full time entrepreneurship to bolster their financial resilience, and this trend is only expected to increase in coming years.
But as with all the US states, you must take specific steps to start a business in New Jersey.
For any aspiring business owner, making the first steps of starting your own business can be daunting. In this article you’ll find a step by step walkthrough of all the key points to keep in mind when starting and growing your dream business.
So, if you are ready, let’s go on and learn how to start a business in New Jersey:
Entrepreneurs dream of owning profitable businesses and gaining control of their life. Allowing us to make brave decisions, follow our intuition, and own our victories and failures.
It’s a liberating experience, even the failures; trust me, I know!
But to achieve this independence and profitability, you must be self-aware, fast, and happy when choosing your business idea.
Why?
Because self-awareness ensures you don’t waste time on a lousy business idea (know your skills, strengths, and interests). Speed grabs your opportunity before someone else. And happiness in your work will motivate you to continue through tough times.
If you already have your business idea, great; if not, here are some ways to find one.
Whether you’re selling food truck Hoagies to bennies down the shore, Moz to local restaurants and delis in Hoboken, or vintage clothing on Bloomfield Ave in Upper Montclair. You’ve gotta ensure folks want what you’re selling!
Validating your business idea is part of your business plan, and the better you do it, the fewer chances you’ll take.
Your goal is to determine:
Your business plan synthesizes crucial information from different sources, like:
Infusing them to develop a solution (tell a story) to reach your goals and convince others to buy into your business idea.
For example:
You use this to find your target market size, identify your competitor’s authority and see if your idea is rising in popularity or deflating like an old helium balloon.
And help you develop a marketing plan outlining strategies to engage, attract, and convert people into loyal brand advocates.
Your marketing plan contains all the strategies you’ll use to put your brand where your target audience can see it, including implementation timelines and budgets.
Your financial section confirms whether your business idea is financially viable to ensure you can afford the start-up and running costs and, if necessary, convince others to invest.
A financial plan has 5 statements, including analysis:
The 5th is so investors can see what revenue you expect and how quickly you’ll earn it.
The Garden State teems with diversity, from natural wonders, nature reserves, and beautiful beaches to world-famous cities and thriving small towns, so it suits many niches.
Your perfect business location depends on your idea and whether you’ll rely on a passing trade like retail and restaurants, bring your service to your customers or sell online.
Other considerations are price and zoning laws.
Zoning laws determine which businesses can operate where throughout NC and include regulations for health and safety, fire certificates, building use, signage, and waste removal.
Even home-based businesses like catering and mobile ones like food trucks must comply, and each county and city sets its rules.
Contact your county clerk’s office or the relevant municipal department to learn about zoning laws and regulations.
Starting an online business is one way to reduce your start-up costs and avoid zoning laws.
Many entrepreneurs start online and progress to a brick-and-mortar store relative to demand, so keep that in mind when deciding.
If starting an online business, you’ll need:
Note:
Tax laws vary depending on your type of business, and most states have specific regulations regarding selling online. We’ll look at those a little later, but first:
Shakespeare wrote the adage, “A rose by any other name would smell as sweet.” This might be true for roses, but not for your business name.
Your business name must convey who you are, what you offer, and why your brand is sweeter than the rest.
An example of how it works.
It’s simple, right? And that’s why it’s powerful.
And you choose the right name for your business by following similar guidelines:
Sole proprietorships and general partnerships don’t register a business name with the NJ Secretary of State’s office when forming (they use their names). Still, they can use a catchy brand name by filing a Doing Business As.
Known in New Jersey as a fictitious name, a DBA enables all businesses to use a name that suits their branding, is memorable, and is available as a domain by filing a Registration of Alternate Name for a $50 fee.
A business structure describes your business setup; you can do it in 2 ways formal and informal.
Formal structures include limited liability companies (LLCs), limited liability partnerships (LLPs), and corporations, which are separate entities from their owners.
Informal structures include sole proprietorships and general partnerships, not separate from their owners.
Here’s how they work:
All use the pass-through tax system, meaning the profits and losses pass to the owners (in LLCs, its members, and S corps shareholders), who report their liability on their tax returns.
The advantage is avoiding corporation tax, which can be as high as 9% in NJ.
An S corp has further advantages, like shareholders receiving tax-free payments known as dividends, and the corporation pays half their self-employment tax liability.
There’s a checklist of necessities most businesses need to start and run efficiently; banking, credit cards, and accounting are on that list.
And even though informal entities don’t need them, they can benefit from using them.
Formal entities (LLCs and corporations) must have a business account to avoid breaking the corporate veil (mixing business and personal income) and keep their liability protection.
A business account also simplifies bookkeeping (you can see your debits and credits), which is crucial for balancing your accounts come tax season.
Credit cards also help simplify bookkeeping and give your business a professional look when dealing with vendors.
Another advantage is a credit card account can help build your business credit score and improve your chances of getting a business loan.
Accounting comes in 2 forms: daily/monthly bookkeeping duties, which you can easily do using accounting software that integrates with your business accounts.
And quarterly/annually, where you file quarterly estimated and end-of-year returns, and for those, you might need the help of an NJ tax accountant, especially for payroll taxes.
Your business structure determines what type of funding you can get; for instance, banks rarely lend to start-ups without collateral or stocks, like S Corp.
Even LLCs without a proven credit history can find traditional loans hard to get; fortunately, you have other options:
NJ businesses can apply for state incentives or grants to support their growth.
When applying for tax credits or state grants, first get a business registration certificate (BRC) from the New Jersey Division of Revenue.
The SBA New Jersey division assists small businesses in getting funding (business loans) from SBA partners, often with longer repayment terms and lower interest.
Insurance helps reduce some risks when starting a business in New Jersey, and some policies are optional while others are not.
The most common forms of business insurance are:
NJ businesses with employees must have 2 types of insurance.
Permits and licenses work at federal, state, and local levels. Which ones your business needs depend on your niche, location, and if you have employees.
Although NJ doesn’t have a general business license, you might need permits or licenses at the state and local levels.
The permit and license requirements are on NJ’s Licensing & Certification Guide.
And you’ll find a municipality department list on the State’s Municipal and County Governments website.
Besides New Jersey taxes, you might need to pay federal income and employer taxes, so check the IRS Tax Guide for Small Businesses and Taxpayers Starting a Business to learn more.
New Jersey has the following taxes:
For further information, contact the New Jersey Division of Revenue or the Division of Taxation.
Hiring the right talent that can do the job you need them to is crucial when finding your team.
Let’s look at your options:
It’s no secret that employees involved in customer service, product development, or service duties can make or break your business. So, when hiring, follow a strict onboarding process to ensure you employ people that suit your brand.
Here are some New Jersey organizations that can help you:
Once you have your team, it helps to use a payroll service to track working hours, issue paychecks, and simplify your tax returns.
New Jersey state has labor laws that regulate minimum wage, overtime, payment dates, earned sick leave, and termination, and employers must follow them.
Before you hire, visit the Department of Labor and Workforce Development for payroll guidance, report new hires to NJ state, and register for employee taxes with the IRS.
Besides full-time employees, you can outsource an experienced NJ accountant on a retainer or independent contractors on a need-only basis to help you achieve your targets.
When employing contractors, you must categorize them correctly to avoid breaking New Jersey employment and tax laws. In other words, you can’t say an employee is a contractor to avoid employee taxes and insurance.
You can learn more about hiring contractors correctly on the Department of Labor and Workforce Development A-B-C test page.
The thought of marketing can be intimidating as you’ve numerous approaches to choose from.
But you must do it because a creative marketing campaign is how you’ll elevate your brand above your competitors.
Successful marketing strategies understand their audiences, have appealing messaging that elicits an emotional response and are where people will see them.
Use these 6 strategies to grow your business:
Email marketing (mailing lists and newsletter) is as old as the Appellation Mountains and just as impressive, with a $41 return for every $1 invested.
Opt-ins (those pop-up boxes asking for your email address) are persuasive CTAs (call to action) on your website offering value to your viewer, like a free ebook or mini-course.
Once you have a mailing list, you can begin your email marketing campaign to build trust with your readers and form a community eager to engage with your brand.
One way to land your first sales are special offers that provide value to your target audience.
The offers you use depend on your niche and audience needs; here are some examples:
People trust brands they’re familiar with, which can be problematic for start-ups.
One way around this is collaborating with other established businesses to attract customers’ attention and establish trust through association.
Brand collaboration also enables both businesses to cross-promote each other’s services/products, reach a wider audience, and increase sales.
Word-of-mouth marketing (WOMM) is a personal recommendation strategy.
Here`s how it works:
Person A recommends your brand to Person B, and as they trust one another, the recommendation gives your brand credibility, and you get a new customer. Not only is it free marketing, but it’s also the most powerful, as results show 92% of consumers trust WOMM.
Investing in WOMM means making your customers so happy they`re compelled to tell others how great you are; here’s how you do it:
With 90% of people reading reviews before buying a product, and 85% of consumers trusting online reviews as word-of-mouth recommendations, Asking for reviews is an essential part of your marketing plan.
Here are some ways to ask for reviews:
There’s a divide separating your brand and your audience (trust). Content (videos, podcasts, blogs, and imagery) bridges that divide.
The key is to provide interesting and valuable content that people consume and want to share.
And you do that by starting conversations:
The more you can get people talking, the quicker they’ll share your content, and that’s how you’ll build your online community.
Your last step to start a business in New Jersey is opening your doors, letting your target audience know about it, and managing your dream NJ business.
Launch events are great for creating brand awareness and even landing your first clients.
A launch event is how you create a buzz about your new business, let your local audience know you’re open, and make essential connections with prospective clients and other potential business collaborators.
How to throw a successful launch event:
Your first sale could happen in your launch event, organically online, or it might take some time until you establish your brand.
The trick is not to worry about it and focus on the solutions you provide to your audience.
Depends on the type of business. For example, formal entities (like LLCs) must file Articles of Organization with the NC state. In contrast, informal entities might only need specific permits.
The filing fee to register an LLC is $125.
Choose your business name, appoint a registered agent, and register Articles of Organization and certificates of formation with the New Jersey online business formation service.
The Garden State doesn’t have a mandatory business license. Still, depending on your niche, you might need federal or local licenses and permits.
And that’s how to start a business in New Jersey.
Follow the NJ rules for hiring, permit/license regulations, choose the right location, and brand your business.
And above all, remember.
“The proof you can do hard things is one of the most powerful gifts you can give yourself.” -Entrepreneur Nat Eliason.
So, stick with it, and your Joisey start-up could soon be making gravy.
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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