Starting a Business as a Woman in California

Starting a business can be complicated for anyone. Here are the steps to start a business as a woman in California.

A woman looking to start a business in California may have a rough time finding where to begin. Following these six steps can be extremely useful in taking the initial steps to start a business.

Create a Business Plan
Choose a Location
Choose a Business Structure
File Tax and Employer Identification Documents
Get Insured
Obtain Licenses and/or Permits
Hire Employees

Step 1: Create a Business Plan

Creating a solid business plan is essential to start a business. A business plan is a formal written document establishing business goals, including the methods for attaining those goals and the time frame for the achievement. Solid business plans should include:

An executive summary
Products and services (key product development information)
Marketing strategy and analysis (including an analysis of the competitive environment/industry)
People and partnerships (a description of the workplace roles and professional relationships)
Budget, financial planning, and other key financial information

Prior to creating a business plan, ensure the business idea suits the business owner’s interests, personal goals, and natural abilities.

Step 2: Choose a Location

Every woman needs a location to start a business in California. A business owner needing help deciding a location for a business should contact the California Business Investment Services unit of the Governor’s Office of Economic Development (GO-Biz). The California Business Investment Services unit provides a variety of select services (online and in-person) for people starting a small business.

Step 3: Choose a Business Structure

Choosing the correct business structure is vital to ensuring your business’ success, as choosing the most appropriate business entity is important for tax and liability issues, ownership concerns, and federal responsibilities. When choosing the business’ entity type, consider all aspects of the business, such as personnel needs and the business’ goals. A business in California must be registered as one of the following entities:

Corporation
Limited Liability Company
Limited Partnership
General Partnership
Limited Liability Partnership
Sole Proprietorship

Step 4: File Tax and Employer Identification Documents

Filing tax and employer identification documents is the next step to starting a business in California. Various state and federal agencies and programs help business owners with tax information and taxpayer rights. State agencies include:

Franchise Tax Board: administers personal and corporate income and franchise taxes.
California Department of Tax and Fee Administration (CDTFA):
- administers more than 30 tax and fee programs.
Employment Development Department:
- responsible for the regulation of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending, and residential mortgage lending.
California Tax Service Center:
- provides quick, helpful answers for questions concerning tax assistance, such as information about income tax, payroll tax, sales and use tax, and other taxes and fees for businesses.

Contact the Internal Revenue Service (IRS) to claim your Employer ID Number (EIN), a number assigned to help identify businesses for tax purposes and information concerning retirement plans. The IRS issues employers federal identification numbers and administers federal payroll and income taxes.

Step 5: Get Insured

In California, businesses with one or more employees are required by law to have workers’ compensation insurance, which helps business owners manage risks. The most common types of business insurance are:

General Liability Insurance:
- basic insurance coverage is designed to protect a business’s assets from a wide spectrum of risks.
Workers’ Compensation Insurance:
- designed to cover an employee’s medical expenses and other losses in the event of a work-related injury; some businesses are required by law to carry a workers’ comp policy.
Professional Liability Insurance:
- also known as errors and omissions coverage (E&O), protects against claims of inaccurate, negligent, or undelivered work.

Small businesses, including home-based businesses, should purchase a general liability policy.

Step 6: Obtain Licenses and/or Permits

Many businesses are required to obtain either licenses or permits in order to operate in California. CalGOLD helps determine needed permits and the California Department of Consumer Affairs (DCA) provides businesses with any necessary licenses.

Step 7: Hire Employees

Building a strong team of employees is crucial for any business. However, business owners should do so legally by registering with the IRS for employee taxes and reporting new hires to California’s New Employee Registry.

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If you or a loved one would like more information on how to start a business as a woman in California, get your free consultation with one of our business attorneys today!