How to Start a New Business in Washington State
Starting a new business in Washington state isn’t difficult, but it does require you to follow specific steps carefully in order to expedite the process and avoid complications and delays.
Here’s how to start a business in Washington State quickly and effectively.
Your business name sets the tone for your business’s brand. A business name can tell customers a lot about what to expect from your company.
Your business name might be direct, funny, memorable, or a mix of these qualities. In any case, you want to settle on the right business name early on, after you’ve formed your business idea.
Take care to make sure that your chosen business name isn’t already registered. You should also consider what URL you want for your website and see if that’s available. Filing with the Washington Secretary of State is a simple process.
The Washington Secretary of State website is also an excellent resource for services, funding, and similar support. This includes the Small Business Administration and Small Business Development Center resources for economic development.
If you’re looking to create a trade name as well, you can register as many as you want on the Washington State Department of Revenue website. Every business, from a sole proprietorship to a C-corp, can get a DBA.
A sole proprietorship might opt for using the business owner’s name for business purposes. However, those operating a Washington corporation over a sole proprietorship might prefer a trade name to maintain their privacy and anonymity.
Beyond business registration, a quick Google search will tell you whether your desired URL is taken or if it’s for sale.
2. Choose a Business Structure
Choosing your business structure can be one of the many steps that aspiring business owners get hung up on.
Business structures determine tax liability, how a business is managed, and shareholder and financing options.
So, for example, you might be choosing between a Washington LLC (limited liability company), an S-corp, and a C-corp. While you’ll want to conduct comprehensive research to fully understand each, here’s a brief overview of each:
- LLC: A Washington state LLC offers pass-through taxation benefits, greater flexibility in terms of business management, fewer documentation requirements, and can be ideal for those with a growing business who don’t anticipate immediate profitability.
- C-Corp: C-corps are great for entrepreneurs who want unlimited access to shareholders, easier access to financing, and ease of selling a business later on. However, this business structure is subject to double taxation.
- S-Corp: S-corps offer pass-through taxation while still maintaining many of the benefits of a C-corp. It does face stricter shareholder limits, transfer limits, and stock limits.
It’s important to know in advance that Washington state does not have personal income or corporate tax. You will be mainly concerned with paying business and occupation tax, retail sales tax, use tax, and personal property tax.
3. Set Up Business Identity
You’ll need to establish your business physically or virtually when you start a business. This aspect of business identity will be instrumental in being able to register for licenses and permits, funding applications, and beyond.
This includes establishing a virtual office, getting a business address, establishing a business phone number, starting a website, and setting up an email address.
You should also consider useful services like a Washington registered agent service to help you stay organized moving forward.
Establish your business identity both in terms of branding and physical and virtual solutions for a seamless launch.
4. Register Your Business
A lot of what goes into a business initially is the business plan. You want to know what to do to establish your small business, develop a brand, create a marketing strategy, and so on, to bring your business idea to fruition.
Once these initial stages for your business idea are completed, it’s time to take the next steps and register your business.
Business registration needs to be done with both the state and the city.
Entrepreneurs can visit their city’s website to see what needs to be done to register there and establish their business entity.
To register your business with the state, you can visit the links provided to the Washington State Department of Revenue and the Washington Secretary of State above.
5. Apply for Licences and Permits
Chances are that you need a business license and permits to legally operate your business in Washington state.
Professional license and permit requirements can be a bit confusing.
However, there are ample resources to learn about Washington business license and permit requirements.
The Washington State Department of Revenue makes it easy to understand business license requirements and ensure you have every state business license and permit you need. They offer small business guidance by helping you:
- Determine your business license and permit requirements for your city, Washington state, and the United States.
- Learn where to go next for each Washington business license requirement.
- Help you understand your application processing fees for a state business license or permit.
- Access additional support for sole proprietors, small business owners, and entrepreneurs.
Washington business owners should conduct research on which state business license and permit requirements they’ll be subject to when creating their business plan. This way, there’s no surprise once they realize their business plan.
Take care to ensure you have every business license and permit to avoid complications with your Washington state business down the road.
6. Get an EIN
Do you plan on applying for business credit solutions in Washington state at some point?
If so, you’ll need a federal employer identification number, or EIN.
An EIN is like an SSN, with the exception being that it’s tied to your business credit rather than your personal credit.
No matter what type of loan, business credit card, or other source of funding you’re applying for, your EIN will play a primary role. This is especially true if you wish to avoid using personal credit when you start funding your small business.
An EIN is also necessary for a wide range of other essential business activities that small business owners will be engaged in. You’ll need it if you want to:
- Hire employees
- Change your business structure (like moving from a general partnership to a limited liability partnership)
- Pay sales taxes
- Get business insurance
- And engage in a wide range of other business activities
You can visit the IRS’s website to get your EIN for free in a matter of minutes.
Entrepreneurs should also get a unified business identifier (UBI) for Washington state.
7. Get a DUNS Number
Personal credit reports and personal credit scores are provided by several companies. Likewise, there are several business credit bureaus you will turn to for monitoring your business credit.
The biggest player in the game is Dun & Bradstreet. They provide what’s known as a DUNS Number, which is tied to a credit profile for your business in the Dun & Bradstreet system.
Lenders will often ask for this number to get a better idea of your credit history and creditworthiness.
Getting a DUNS Number is simple. Just:
- Visit their website.
- Select the company option that best fits your business. For example, “I have a U.S.-based business.”
- Provide them with the requested business information.
- Wait for your application to be approved or to be contacted by a D&B representative.
A DUNS Number is free, no matter whether you’re applying from Washington state or elsewhere. However, it will take up to 30 days to receive it if you choose the free option. You can expedite it for $229 and get it in up to eight days, if you’re in a rush.
8. Open a Business Bank Account
A business bank account will be a requirement if you want to start your own small business.
Once you find a bank that offers the terms and account perks you want in Washington state, you’ll need to gather your business formation documents, EIN, business licenses and permits, and ownership agreements.
You can call your bank ahead of time to see if there’s anything else they specifically request. This will help you prepare in advance so that there are no hold-ups.
Alongside bank fees and perks, consider whether this is a bank you could see yourself staying with, especially as it pertains to their credit solutions and financing products.
9. Build Business Credit
Building your business credit is instrumental to securing financing for your business. No matter what Washington’s economy looks like, you want to be able to navigate it and keep your business open.
To get started, you’ll want to:
- Leverage Vendor Credit Tradelines: Net 30 accounts are easily accessible and enable you to build business credit fast. Double-check to see if they report, as not all net 30 vendors do.
- Open a Business Credit Card: EIN-only business credit cards, like corporate cards and fleet cards, will help you finance your business and build business credit at the same time. This helps you access better financing solutions faster.
- Create a Plan of Action: Establishing a plan of action, brushing up on business credit best practices, and having your eye on each credit solution you want to apply to next will allow you to finance your business more effectively.
- Monitor Your Business Credit Reports: Mistakes can always appear on business credit reports, impeding your progress. Keep tabs on your business credit scores and reports to address any errors should they arise.
Build Business Credit with Credit Suite
Starting a business can be rather simple when it’s all broken down. Business credit can be a bit more challenging for a new business owner to understand. Credit Suite is here to help make your business credit journey easier.
The Credit Suite Fundability System offers you step-by-step guidance to improve your fundability and business credit, access to a wealth of credit issuers and lenders that you pre-qualify for, real-time credit tracking, one-on-one support, and so much more.
Get started with Credit Suite to see how we can help you build a business that lasts.
