Essential Steps to Start a Business in Oklahoma?

Oklahoma ranked low in Forbes’ list of best places to start a business in 2023. However, the state officials are focused on creating a favorable business environment.

By focusing on infrastructure, workforce development, and business-friendly policymaking, in addition to streamlining processes for starting a business, we are confident that the number of entrepreneurs and startups in our state will continue to grow.

For now, Oklahoma’s low costs of living and tax burdens and high quality of life make it possible for individuals to launch a successful business.

So if you want to start now, do it. According to officials, the future of business in Oklahoma looks good.

But, there are some essential aspects to tick off.

Here’s the list of steps to take when starting a business in Oklahoma -

Choose your Business Idea

Choosing the right business idea can be daunting, but it all starts with understanding your strengths and weaknesses.

Ask yourself these questions -

What interests you? What are your personal goals? What skills do you have?

If you're struggling to find an idea, don't worry. Here are some potential business ideas for you to consider:

• Online reselling
• T-shirt printing
• Online teaching
• Online bookkeeping
• Consulting
• App development
• Freelance copywriting or content writing
• Dropshipping

Take the time to research and evaluate each option, and choose the one that aligns with your interests, goals, and skills. With the right idea, you'll be well on your way to starting a successful business.

Make a Business Plan

Congratulations on coming up with a business idea! The next step is to develop a solid business plan to turn your vision into a reality. Here's what you need to do:

Think about your business name

You want to consider a business name that resonates with your customers, clearly highlights your brand, and is available in Oklahoma. Ensure to follow Oklahoma's naming rules for an LLC or corporation.

Find a business location

If you need a physical location for your business, research popular areas in Oklahoma like Durant or Stillwater. A prime location can increase foot traffic and drive customer interest.

Conduct market research

Thorough market research is crucial to understanding your target market and competitors. This can involve surveys, SEO research, or focus groups.

Market research will help you understand your target audience and competitors and craft an effective business plan.

Write your business plan

A well-crafted business plan not only helps you stay organized but also helps you obtain funding and reach important milestones.

Your business plan should answer the following essential questions -

• Product development - What problem do you solve with your business? What makes your product or service unique?
• Sales and marketing - Who are your possible customers when it comes to sales and marketing? How are you going to catch their attention and turn them into buyers?
• Partnerships - What roles will you need to fill, and what business partnerships will you need to make?
• Financial planning - How many customers or sales do you need to "break-even"? How much will it cost to get there, and where will the money come from?

With a solid business plan, you'll be well on your way to starting a successful business in Oklahoma!

Choose a Business Structure

Choosing the proper business structure is crucial in starting your own business. Every business structure has advantages and disadvantages, and it's essential to understand what they are before making your decision.

Sole proprietorship

In this structure, the business owner and their business is the one. This means that you have complete control over your business and its profits, but you are also personally responsible for any debts or legal issues that may arise.

Partnership

The partnership structure is similar to a sole proprietorship but with multiple business owners. Like sole proprietors, partners are personally responsible for any debts or legal problems that may come up.

LLCs

A Limited Liability Company, or LLC, offers the flexibility of a partnership or sole proprietorship and the personal asset protection of a corporation.

This structure is famous among small businesses as it's easy to maintain and offers favorable tax treatment.

Corporations

A corporation is a distinct legal business entity with legal rights and responsibilities. Corporations are more formal than LLCs and may be more attractive to investors.

Nonprofits

A nonprofit organization is created to further a social cause and is funded by donations instead of investors. Nonprofits are exempt from paying taxes but may still have to file with the IRS.

Register Your Oklahoma Business

After choosing the proper business structure, the next step is to form your business. No matter which business legal structure you select, there are a few common steps that you'd need to follow:

Name your business

You'll need to give your business a name. Ensure to choose a name that's memorable, easy to pronounce, and legally available in Oklahoma.

Designate a registered agent

Your registered agent will be the point of contact for legal and tax documents for your business.

Get an EIN

You must obtain a Federal Employer Identification Number (EIN) from the IRS. This number will be used to distinguish your business for tax purposes.

File your formation documents

If you want to start an LLC, you must file the Articles of Organization with the Oklahoma Secretary of State (SOL). You can do this online, by mail, or in person. It costs $100 to file.

To start a corporation, you must file a Certificate of Incorporation with the SOL and pay a minimum filing fee of $50.

Open a Business Bank Account

If you're starting a business, opening a separate bank account to manage your finances properly is important. This is essential for LLCs and corporations because it helps to maintain the legal separation between personal and business finances.

By separating your personal and business expenses, you can easily track income and expenses, manage cash flow more effectively, shield your personal assets, and confidently plan for the future.

Obtain Permits and Licenses

If you want to run your business legally, you must comply with federal, state, and local government regulations and obtain business permits and licenses.

For instance, if you're starting a restaurant, you may need health, building, and signage permits.

To find out what licenses and permits you need, you can use the following resources -

• US Small Business Administration (SBA) guide.
• Go to the Business Licensing and Operating Requirements page of the Oklahoma Department of Commerce.
• Talk to your county clerk and ask about licenses and permits for your area.

Buy Insurance

If you're starting a business in Oklahoma, it's essential to consider purchasing business insurance to protect yourself from potential risks. Different types of insurance policies can help mitigate those risks, such as:

• General Liability Insurance
• Workers' Compensation Insurance
• Professional Liability Insurance

We highly recommend that all small businesses, even home-based ones, obtain a general liability policy.

A professional liability policy is worth considering if your business offers professional services or advice, such as consulting or accounting.

Additionally, Oklahoma law requires businesses with one or more employees (excluding owners) to have workers' compensation insurance.

Get Funding

Starting a business requires funding, but before you can secure the necessary capital, there are some essential steps to take. Begin by calculating your business costs to determine the right funding source for your Oklahoma business. Create a detailed financial plan to stay organized and smart with your spending.

There are various funding options available, including:

Bootstrapping

This is a do-it-yourself approach to business funding where you use personal savings and income to provide capital for your business. As your business grows, you can reinvest the profits to keep it going.

Friends and family

Borrowing from friends and family is an easy way to secure the capital you need to start your small business. However, it's essential to establish a written agreement and repayment plan to avoid potential issues.

Small business grants

Small business grants offer funding for your business that doesn't require repayment. To qualify, you must complete an application process with the grantor.

Small business loans

You can apply for small business loans through banks or lending institutions. This funding method requires repayment but can provide the capital you need to cover startup costs or other expenses.

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