Published By Janet Gershen-Siegel at April 16th, 2019
A new business in Louisiana is not out of reach. So have you been wondering: just how do I start a business in Louisiana? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Louisiana during a recession?
Business Insider in a 2016 article puts Louisiana in its middle ten when it comes to starting a new business. And this is for the whole country. Many people have turned to starting businesses.
There are also a lot of potential employees available to work. But those potential employees’ educational levels tend to be low. Plus the state’s corporate income tax is in 5 brackets.
Louisiana also has a burdensome sales tax. It is on vital business components like leases and utilities.
In 2019, Dollar Sprout calculated Louisiana to the number three state for starting a new business. Keep in mind, their methodology differs from Business Insider’s.
Dollar Sprout noted the biggest draws are lower labor costs and a tighter labor market. A somewhat modest cost of living and a steady growth rate were also favorable factors. However, sweltering summers could be a turnoff to out of state employees looking to relocate.
In Louisiana, business owners and business partners can operate under a fictitious name filing, also known as “Doing Business As” or a DBA. Using such a fictitious name filing, an employer can name the business. And they can operate it under a name different from the owner’s full legal name, the names of business partners, or the name under which the business is officially registered. It is not necessary for a sole proprietor to register a DBA with the state.
According to Louisiana Economic Development, the top industries in Louisiana are agribusiness, advanced manufacturing, and aerospace. More top Louisiana industries are energy, entertainment, and software development. Still more Louisiana top industries are automotive, water management, and process industries. Plus Louisiana – New Orleans in particular – has a great deal of tourism.
Smart business owners can find new opportunities and take advantage of the bigger industries in the area by offering goods or services such as catering, transportation, and hospitality. Other options are trucking for any industry. Still more business ideas are to do data and other types of computer work. There is also even potentially operating taverns and larger concert venues.
Here is exactly how to start a new business in Louisiana.
Louisiana business owners can register their new business name on the Louisiana Secretary of State’s website.
A Louisiana corporation must have a unique corporate name. Before a business owner can file to incorporate, they will need to be sure that the name they want is not already in use.
By searching online records and other databases, they can find out if the name they want is already in use by another corporation. Search a database of Louisiana corporations online at the official website of the Secretary of State: Louisiana Corporation.
If a business owner would like to reserve the corporate name they want until the time that they can file to incorporate, they can submit an application to the Louisiana Secretary of State. Find the application online at Reserve Louisiana Corporate Name. The filing fee is $25.00 and then the name will be reserved for a period of 60 days.
Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.
For example, in Shreveport, you will need to go to the Business Startup page on the Shreveport city website.
Register a business at the Louisiana Secretary of State.
For other areas of the state, ask local business owners. Or they can ask computer user groups to find help in this area. Other choices for virtual business office addresses could be in nearby states. These are Arkansas, Mississippi, and Texas.
Small business credit is credit in a business’s name. It doesn’t link to an entrepreneur’s individual credit, not even if the owner is a sole proprietor and the only employee of the small business.
Because of this, a business owner’s business and individual credit scores can be very different.
Since business credit is separate from personal, it helps to secure an entrepreneur’s personal assets, in the event of legal action or business insolvency.
Also, with two distinct credit scores, a business owner can get two different cards from the same vendor. This effectively doubles buying power.
Another benefit is that even startups can do this. Going to a bank for a business loan can be a formula for frustration. But building business credit, when done right, is a plan for success.
Individual credit scores are dependent on payments but also other considerations like credit use percentages.
But for business credit, the scores actually merely hinge on if a business pays its debts timely.
Establishing company credit is a process. A small business has to be fundable to lending institutions and merchants.
That is why, a company will need a professional-looking website and email address. And it needs to have website hosting from a supplier like GoDaddy.
And also, company telephone numbers must have a listing via ListYourself.net.
Also, the business telephone number should be toll-free (800 exchange or similar).
A small business will also need a bank account dedicated strictly to it, and it needs to have every one of the licenses necessary for operating.
Visit the Internal Revenue Service web site and acquire an EIN for the business. They’re totally free. Choose a business entity like corporation, LLC, etc.
A small business can get started as a sole proprietor. But they should switch to a type of corporation or an LLC.
This is in order to lessen risk. And it will take full advantage of tax benefits.
A business entity will matter when it pertains to tax obligations and liability in the event of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and tax obligations. No one else is responsible.
Begin at the D&B web site and get a cost-free D-U-N-S number. A D-U-N-S number is how D&B gets a company in their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
By doing this, Experian and Equifax will have something to report on.
First, you need to build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start to get more credit.
These types of accounts tend to be for the things bought all the time. Like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first of all, what is trade credit? These trade lines are credit issuers who will give you initial credit when you have none now. Terms are often Net 30, instead of revolving.
Hence, if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.
Not every vendor can help in the same way true starter credit can. These are merchants that will grant an approval with marginal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
You want 3 of these to move onto the next step.
Know what is happening with your credit. Make certain it is being reported and fix any mistakes ASAP. Get in the practice of checking credit reports. Dig into the particulars, not just the scores.
Update the details if there are inaccuracies or the info is incomplete.
So, what’s all this monitoring for? It’s to dispute any inaccuracies in your records. Errors in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way. Disputing credit report mistakes generally means you specifically spell out any charges you dispute.
Always use credit responsibly! Never borrow more than what you can pay back. Keep an eye on balances and deadlines for repayments. Paying punctually and fully will do more to boost business credit scores than virtually anything else.
Building small business credit pays off. Great business credit scores help a small business get loans. Your credit issuer knows the small business can pay its financial obligations. They recognize the small business is bona fide.
The company’s EIN attaches to high scores and lending institutions won’t feel the need to demand a personal guarantee.
Business credit is an asset which can help your company for many years to come.
Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.
Here is how Louisiana is dealing with COVID-19. From March 13 – 16 there was a declaration. And then there were two additions to it. Governor Mark Bel Edwards declared a state of emergency. Legal deadlines were postponed until at least April 13. Driver’s license expiration dates are postponed until May 20.