Starting A Business in California in 10 Quick Steps

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The idea of starting a business in California seems pretty exciting, doesn’t it? It has to be. After all, California ranks as the 1st State in the USA to provide business entities with capital venturing access. Having a business in California is way more rewarding than you think. 

Why should you consider starting a business in California? 3 simple facts about California make it the best economic hub for starting a business-

  1. If ranked amongst the 50 States of the USA, California hold the 1st position to offer venture capital access to every business.
  2. It is the 2nd largest State to offer the best Economic climatic condition in the USA.
  3. California holds the 4th position in Entrepreneurship in the USA.

Naturally, California is a favourable place for entrepreneurs to start their business.

If you are thinking about opening a business in California, you have come to the right place. We are here to discuss some quick tips on how to start a business in California.

Points to Check while Starting a business in CA:

Before you set up your business in CA, here are some interesting facts about the state that might attract you more:

  • California has been declared as the wealthiest and largest USA state.
  • There are millions of opportunities to open a small business in CA.
  • The major industries in CA are Entertainment in Hollywood, Los Angeles, and Technology in Silicon Valley of San Francisco.
  • Worldwide renowned companies like Apple, Google, and similar have their head offices here in CA.
  • CA holds the 30th rank on the Forbes Best States for Business for the opportunities it provides to Corporations and start-up businesses.
  • The tax structure of California is comparatively higher than other states of the country for business.

So, now you know all the basics about California, that you needed to know before starting your business. Surely you are still feeling excited about the business idea here? 

In case you need some additional help apart from the tips mentioned here, you can always outsource business help locally.

10 Quick Steps to Starting a Business in California

Starting a business in CA is definitely not a one day and one-man job. Many nitty-gritty is involved in the process. Here, we will discuss 10 quick steps to start the business in a nutshell. The process is much more elaborate and complicated. But if you have the step-wise guide, it will be easier for you.

Step 1: Choosing a business idea

This is definitely the first point to consider when you start-up on your own. What do you want to do your business with? There are many fields that you might be interested in. Choose an idea that attracts you the most.

The best way to attain success in business is to choose a perfect idea. You need an idea that-

  • Matches the interests you take in
  • Keeps you motivated, even in tough times
  • Meets your goals
  • Suits your abilities to deliver
  • Meets the demand of the target market

Come up with innovative ideas and make a break-through here.

Step 2: Preparing a working plan for the business

Do you want to run a successful business? Behind every successful business, there is always careful wise planning involved. Before you invest your resources and money on your business, analyze the business idea, and prepare a proper business plan to take it forward.

Common points to consider while making a business plan are-

  • Business Name
  • Structure of the business and its type
  • The target market
  • Development of the product
  • Market competitors
  • Market demands
  • Marketing and sales planning
  • Partnership and Human Resources
  • Employment
  • Planning the finances

Step 3: Business Registration in California

Have you decided on the business structure you want to go with? There are 3 major options for you-

  • DBA or Sole proprietorship
  • Corporation
  • LLC

To start a business in CA, you need to first get it registered with the states. DBA is probably the most popular structure of business chosen in California. However, LLC is the most secure one and doesn’t involve extra taxation or paperwork.

Registration for LLC in California starts for a nominal fee of $70 only.

To have more worth in your business, it’s recommended to get yourself a registered domain as well as every business demands online presence.

Step 4: Tax registration in California

Business organizations in California are always required to procure a Federal Employer Identification Number or FEIN. This is the same as your personal Social Security number. In other words, this is your Tax ID that helps in the identification of your business during the time of filing tax.

As a matter of fact, any business organization requires the EIN as a permit to hire employees under its banner.

Business taxes applicable in CA are.

  • Sales Tax of California
  • Employer Tax for business engaging people in work
  • Withholding Tax
  • Insurance tax for disability
  • Insurance tax for unemployment

Step 5: Creation of Business Account and Credit Cards

Have you separated your personal and business accounts yet? If you haven’t, it’s time you get it done. As per the Laws of Business, this is essential and is termed as the Piercing of the Corporate Veil. This will also protect your personal assets from market risks.

To give your assets the best protection, you need to have these-

  • Banking account exclusively for the business
  • Business Credit cards
  • Business Insurance

Step 6: Accounting Setup

You have set up your basics, everything planned, and good to start. But, just starting a business is not enough. To ensure that the business plan was a success, you need constant monitoring and tracking. 

To keep track of the business performance and make the process of taxation simpler, it’s best to appoint someone for accounting. You can also invest in advanced accounting software.

Step 7: Obtaining Licenses and Permits

If you want to operate legally, you need a California Business License. There are 3 major licensures and regulations, which when obtained and complied with, allows smooth operation of a business in California.

  • Local Government
  • State
  • Federal

Depending on the type of business and nature of work, you might be required to obtain special permits like that of a permit from the Health Department of the Government for restaurants.

Step 8: Business Insurance

Do you want to protect your business from unforeseen situations and risks? Do you want the business to grow huge? The solution to this is just having business insurance.

3 major types of Business Insurances that you might consider are-

  1. Insurance for general liabilities
  2. Insurance to compensate the workers
  3. Insurance for professional liabilities

Step 9: Brand Defining

If you need a successful business, you need to define your brand well. The best way to do so is by defining.

  • The core values of your business
  • Quality products
  • Compelling marketing
  • Excellent customer service and support

Step 10: Online Presence of Your Business

If you wish to thrive in the modern international market, it is suggested that you have an online presence. The global market operates mostly in the e-commerce module, so, having a website and a business domain is highly appreciated.

By online presence, you need.

  • A website with a personal domain name
  • Social media presence and marketing
  • Online reviews
  • SEO optimization


Now that you have received a fair idea of the steps and process you need to comply to start your own business in California, it might not be very difficult to accomplish. Follow the steps and outsource assistance whenever necessary to meet all legal norms.