At the heart of America, Ohio presents an excellent business opportunity.
With its vibrant history in industries like manufacturing and farming, the Buckeye State boasts a growing gross domestic product (GDP) and an abundance of natural resources.
Ohio’s business-friendly climate features one of the lowest tax rates among all fifty states, including zero corporation tax.
The state offers a low cost of living, ranking high in “America’s cheapest states to live in”, with many amenities priced below the national average.
From the lively city of Cincinnati to the scenic landscapes of Hocking Hills State Park, there are plenty of opportunities for entrepreneurs in Ohio.
When you start your own business you need a vision, and faith in your way. But you also need knowledge, and one of the best ways to get started is by relying on the hard earned experience of other entrepreneurs.
Here are a few tried and tested business creation tips to help you kickstart your business journey.
Read on to learn more about starting a business in Ohio:
Great business ideas don’t grow on trees, specialty cider, artisan olive oil, and gourmet coffee aside.
Specific considerations go into choosing a great business idea.
For instance, your idea needs a wanting audience, beatable competition, sustainability, and accessibility.
But what if you’re stuck on developing a business idea?
No worries, here’s how to find and fine-tune your business idea.
Follow these 4 steps and uncover some business ideas worth validating.
With that in mind, let’s look at Ohio.
A proven way to choose a business idea is to serve your region’s local interests, preferences, or specialties.
Ohio’s largest industries by employment are trade, transportation, utilities, health care, education, government, and manufacturing. Those alone offer endless offshoot business ideas serving their needs.
Other popular Buckeye businesses that suit local interests and preferences include:
The last step is crucial for fine-tuning your business idea.
You validate your business idea by answering four essential questions:
Business plans come in two forms: one-page and traditional.
You’ll need a traditional plan for funding as it details your financial plan. A one-page business plan is your guide throughout and after the startup business stage.
The three most important parts of your business plan are:
Market research refines your business idea by analyzing consumer behavior and economic trends. Giving you a deep understanding of your target audience, you can avoid risks and make informed decisions when your business is still in its conceptual stages.
A financial plan outlines how you’ll achieve your financial objectives. It includes details about your revenue, expenditures, and cash flow.
And it summarizes your current financial position and outlines your long-term business goals.
Your marketing plan details how you’ll connect with your future customers and promote your product or service. It includes things like the advertising methods you’ll use and the best time to use them.
Zoning laws are rules and regulations determining which businesses can trade where, and you must apply for them before you set up shop.
Zoning laws vary from city to city, so visit your local county clerk’s office or check out Ohio.gov for further information.
Opening an online-only business is one way to avoid zoning laws and save on rent. You don’t have to be an e-commerce entrepreneur to do it.
Most product and service businesses can start online.
For example, imagine you’ve chosen a product business idea; you could sell it using Amazon, eBay, Etsy, or a website, depending on your niche. And you could run a service business idea (like a tradesman) from home and advertise and sell it online.
Many brick-and-mortar businesses start this way to reduce financial risk, allowing owners to grow their businesses sustainably.
For an online business, you’ll need:
Social media presence: Social media is no longer optional for small businesses as it’s how you reach and engage with your customers and grow your brand.
A business name is your most important asset because it creates a brand identity that defines your business, engages your audience, and separates you from your competitors.
And the more successful your brand, the more valuable your business name equity becomes.
Three ingredients make a great business name:
Memorability: Your brand’s equity relies on its audience awareness, which comes from memorability, and you create that by choosing a name that’s distinctive, easy to pronounce, and emotionally appealing.
Domain name: Your domain name controls your online identity and is essential for building consumer confidence in your brand; that’s why it must be your business name.
Ingredients aside, you must follow certain rules:
When choosing your business name, you must follow state naming laws.
Sole proprietorships, partnerships, and business entities can register a fictitious name (Doing Business As), in Ohio that allows them to operate using a catchy brand name more suited to their niche.
You can file a DBA online via the Secretary of State’s website or by mail.
Mailing address:
Ohio Secretary of State
PO Box 670
Columbus, OH 43216
A business structure is the legal framework your brand operates under and determines the ownership, liability, and taxation of your company.
Choosing the right business structure is crucial as it affects the licenses you’ll need, how you’ll run your business, and your legal and financial implications.
Sole proprietorships are a pass-through business structure where a single individual manages all aspects of the business, keeping full control over operations and reaping all profits. However, the sole owner assumes complete responsibility and liability.
A general partnership is similar to a sole proprietorship but with multiple individuals owning a business, sharing responsibilities, and splitting profits. Each partner contributes to the business’s operations, assuming shared risks and liabilities.
LLCs offer a flexible business structure that blends the simplicity of a sole proprietorship or partnership and the protection of a corporation. LLC owners, referred to as members, benefit from limited liability that shields them from debts and obligations.
Starting an llc is one of the preferred options for independent business owners, as they may offer many tax and legal benefits.
An S corporation offers limited liability protection, facilitates pass-through taxation, and allows shareholders to sell stocks, making it an attractive option for entrepreneurs raising capital.
My stepfather was a self-employed accountant for 58 years, and he told me the key to business success was balance.
Balance in accounting terms means your book’s balance at the end of each tax quarter; in other words, what you earned and spent adds up to what remains in your account. You need it to maintain a steady cash flow and pay the correct taxes.
And you achieve it by using business banking, credit cards, and accounting.
Maintaining a separate business account is crucial for tracking your income and expenses, regardless of your chosen business structure.
A separate bank account ensures LLCs, LPs, or corporations avoid breaking the corporate veil and maintain liability protection.
And non-legal entities like sole proprietorships can use a business account to project a professional image to clients and suppliers.
To open a business bank account in Ohio, you’ll need an EIN.
I used a $1000 credit card to start my first online business because I couldn’t get a bank loan.
Ten years later, I still use it even though I don’t need it because it provides a useful credit line. As I pay it off on time, it improves my business credit history.
Another reason to use one is that vendors prefer doing business with you when using a business credit card.
Accountants are costly, but most business owners need one to file their income and payroll taxes.
You can do everything else using accounting software and handy apps that integrate with your business and credit card accounts. You can even use them to send invoices, track employees’ working hours, and send reminders to late-paying clients.
Starting a business requires funding, but there are important steps to take before securing the money to cover costs.
Begin by calculating your business expenses to help you choose the right funding option for your business. And be mindful of your spending and stay organized by creating a detailed financial plan.
Business funding comes in several forms:
Small business owners can apply for business incentives in Ohio, such as tax credits and grants.
Here are some resources to explore:
Insurance is essential for every business, but the coverage you need depends on your business niche and Ohio state insurance regulations.
Let’s first look at the common insurance options:
Ohio requires employers with one or more employees to have workers’ compensation insurance from the state, not a private insurance company.
Exceptions include sole proprietorships, partnerships, or LLCs designated as sole proprietorships or partnerships.
For further information on Ohio’s insurance requirements, visit the Ohio Department of Insurance.
To do business in Ohio, all companies must register with the Ohio Secretary of State, which provides a business license.
Depending on your business’s niche, you might need additional licenses or permits at a federal or local municipality level.
Your municipality can help you with local licenses and permits, and the Ohio Business Gateway provides a list of licenses you might need.
You can also read more about business licenses required in Ohio.
Like all US states, Ohio has specific regulations for different business types.
For example, Ohio does not require legal entities to file an annual report or pay inventory or state income tax, making it an attractive place to start a business.
However, all businesses must register with the Ohio Department of Taxation at Tax.Ohio.gov.
Traditionally, small business owners hired full-time employees to help run their operations, which still applies to service businesses like the trade and food industries.
But in our modern business environment, you can now outsource many duties, such as bookkeeping, web design, and advertising. This allows you to avoid payroll taxes and enables you to reinvest in your business.
However, you still need to find the right team and comply with certain regulations:
People are the backbone of the business
Anyone who’s run a business knows the importance of finding the right people for their team. After all, our employees run our daily operations and liaise with our customers, making them the backbone of our business.
But support goes further than in-house employees, such as gaining advice from an experienced accountant and learning from other business owners who can help you navigate your journey from a startup to a successful brand.
Hiring employees brings responsibilities such as payroll regulations and specific filing duties; here are some most business owners must follow:
You can learn more about your responsibilities as an employer by contacting the Ohio Bureau of Workers’ Compensation.
One way to avoid Ohio’s payroll regulations is by hiring contractors on a part-time basis, like an accountant, lawyer, or online marketing specialist.
Contractors are self-employed people who run their businesses and pay their own taxes and health insurance.
When hiring contractors, you must clearly distinguish their status as contractors to avoid Ohio employee liabilities.
Every business needs a marketing strategy to reach, engage, and convert its target audience into customers.
The good news is, many of these strategies are free and help turn one-time buyers into lifelong lovers of your brand.
Opt-in emails are a form of inbound email marketing where people choose to receive messages from your brand. You’ve probably seen them on a website with a pop-up box asking for your email address before you leave.
Well, they work, but to convince people to give their contact details, you must provide an enticing offer or value, such as a free ebook or a special offer.
Consider making special offers to attract your first customers. Special discounts are a great way to attract new customers and build brand loyalty.
Some you can use are:
Brand collaboration is when two or more businesses join forces to develop a product or service that appeals to the same customer base, increasing sales or engagement rates for each brand.
Another benefit of local business collaboration is reaching a wider audience and recommendations from a business whose customers already use and trust it.
Word-of-mouth marketing (WOMM) happens when customers share their enthusiasm for your product or service through everyday conversations on and offline.
It’s unpaid advertising, driven by positive customer experiences, often exceeding their initial expectations.
Reviews are crucial for establishing a positive reputation and fostering trust with your target audience. Always ask your customers to leave a review and make it easy across all of your marketing platforms.
Analyzing what people say in their reviews helps you see what you’re doing right or wrong. It provides genuine feedback from real people, which enables you to align your business to meet their needs.
Creating valuable content is an effective way to increase audience engagement, enhance brand visibility, and boost sales.
The strategy works by addressing the questions and concerns of your audience. Doing so shows you care about your customers and go the extra mile to help them resolve their pain points.
Now that you have completed all the steps, all that’s left is to open your doors and start managing your dream Ohio business.
Launch events, including launch parties, are your first chance to introduce your business to the media, local businesses, and potentially your first clients.
If you’re launching your startup soon, a meticulously planned and branded event is a great way to generate a buzz for your new brand.
Registering an LLC in Ohio costs $99. And there’s an annual $500 Ohio franchise tax most business entities must pay.
Businesses must register with the Ohio Secretary of State to operate within Ohio.
Filing Articles of Incorporation in Ohio costs $99. If you opt to expedite the filing process, you can pay an additional fee of $150.
Forming an LLC in Ohio takes on average 3-7 business days. Ohio LLC owners can submit their articles of organization online, in person, or by mail. The Ohio Secretary of State provides three expedited service options, each incurring an additional fee.
The processing time for a DBA registration with the Ohio Secretary of State is 3-7 business days.
Now you understand how to start a business in Ohio.
Follow the steps and gain legal advice regarding taxes and insurance, especially if hiring employees.
And most importantly, validate your business idea to ensure there’s a demand and you can afford the startup costs.
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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