How to start a business in Columbus

Considering launching a business in Columbus, Ohio? This laid-back, comprehensive guide will help you understand different business structures and their pros and cons, along with the essential steps to get your venture off the ground.

Business Structures in Ohio

Sole Proprietorship

Pros:

• Cost-effective and simple to establish
• Full control over your enterprise
• Straightforward tax filing process, using your personal income tax return

Cons:

• Personal assets at risk due to unlimited liability
• Difficulty securing capital
• The business ceases if the owner passes away or becomes incapacitated

Limited Liability Company (LLC)

Pros:

• Personal assets protection through limited liability
• Pass-through taxation on individual profits
• Adaptable management structure

Cons:

• Comparatively complex and costly to establish
• Annual state filings required
• Possible self-employment taxes

Corporation (C or S Corporation)

Pros:

• Limited personal liability for shareholders
• Can raise capital by issuing shares
• The business continues regardless of shareholder changes

Cons:

• Expensive and intricate to establish
• Double taxation for C corporations (corporate and individual levels)
• Strict regulations and meticulous record-keeping

Steps to Get Started in Columbus, Ohio

1. Evaluate the most appropriate business structure for your needs, considering the pros and cons listed above.
2. Pick a unique business name and register it with the Ohio Secretary of State. For an LLC or corporation, this is part of the formation process.
3. Obtain an Employer Identification Number (EIN) from the IRS, which is necessary for tax purposes and required by most businesses.
4. Register with the Ohio Department of Taxation to handle state taxes, including sales and employer withholding taxes.
5. Investigate and secure any necessary licenses and permits from the City of Columbus and Franklin County, as requirements vary by business type.
6. Open a separate bank account to effectively manage business and personal finances.
7. Acquire appropriate business insurance, including general liability, property insurance, and workers' compensation (if hiring employees).
8. Develop a comprehensive business plan to guide your operational, marketing, and financial strategies.
9. If needed, seek financing from banks, investors, or government programs designed for small businesses.
10. Create a marketing strategy that appeals to your target audience and highlights your products or services.

Additional Tips for Columbus Businesses

• Keep up to date with federal, state, and local regulations that impact your industry, and ensure your business adheres to them.
• Stay informed about federal, state, and local tax obligations, filing and paying on time.
• Engage with local business organizations, attend relevant events, and consult with successful entrepreneurs or industry mentors for valuable advice.
• For help with specific aspects of running your business, consider enlisting professionals such as attorneys, accountants, or business consultants.

By staying well-informed and considering these factors, you'll be better equipped to make educated decisions and pave the way for a successful business in Columbus, Ohio.