Maryland is a great place to start a business. The state offers many resources and programs to help businesses get started, including how to write a business plan, how to register your business, and how to find funding.
In addition, Maryland has a diverse economy and strong workforce which makes it ideal for businesses of all types. If you’re thinking about starting a company in Maryland here’s what you need to know.
14 Steps to Starting a Business in Maryland
Starting a business can be an exciting and rewarding experience, but it’s also a lot of work. Before you start your business, there are a few things you need to do to make sure everything is in order. Here are the steps to starting a business in Maryland.
1. Conduct Market Research
Before starting your business, you need to conduct thorough market research about your target market and competitors. You can learn how to differentiate yourself from competitors, how much customers are willing to pay for your product or service, and how much it will cost to start your business.
2. Write a Business Plan
When starting any business, one of the most important things you can do is write a business plan. A business plan will help you map out your business goals and strategies, and it will also help you secure funding from investors or banks. There are many resources online that can help you write a business plan, including the Maryland Small Business Development Center (SBDC).
Your business plan should include the following essential components:
- Executive Summary
- Company Overview
- Market Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Plan
3. Choose a Business Structure
As the new business owner, you need to choose a business structure. The most common business structures are corporations, limited liability companies (LLCs), and sole proprietorships. Each business structure has its own set of benefits and drawbacks, so you need to choose one that fits your business model and goals.
- Pros: informal business structure, easy and inexpensive to set up, less paperwork, tax reporting is simple
- Cons: owner is personally liable for debts and obligations of the business, no limited liability
Limited Liability Company (LLC)
- Pros: formal business structure, business owners have personal liability protection against the debts and obligations of the business, can be taxed as a partnership or corporation
- Cons: more paperwork than a sole proprietorship, must file articles of organization with the state
- Pros: formal business structure, owners have limited personal liability for the debts and obligations of the business, can be taxed as a partnership or corporation
- Cons: more paperwork than a sole proprietorship, must file articles of organization with the state
Business structures that require registration with the state also require a filing fee to complete the process. To learn more about the impact of the business structure with the tax filing status in Maryland, visit the Maryland Department of Assessment and Taxation website.
4. Choose a Business Location
When starting a business, one of the most important things you can do is choose a location. The right location can help your business thrive, while the wrong location can lead to financial disaster. When choosing a business location in Maryland, you need to consider the following factors:
- Population density
- Proximity to customers
- Proximity to suppliers
- Cost of real estate and rent
- Tax rates
- Local regulations
5. Business Licenses and Permits
When starting a business in Maryland, you need to obtain a variety of business licenses and permits. The specific licenses and permits you need will depend on your business structure and the type of business you’re running. Some common licenses and permits for businesses in Maryland include the following:
This is a general license that all businesses in Maryland are required to obtain. It allows you to conduct business in the state.
Tax ID Number
All businesses in Maryland are required to have a tax license, which is used to track business income and taxes.
Fire Marshal Inspection
All businesses that deal with food, explosives, or flammable materials must receive a Fire Marshal Inspection.
All businesses with employees are required to maintain the health and safety of their employees. Learn more about the requirements here.
The permits and licenses are specific to the type of company you’re starting, so it’s important to choose a business structure and location that fits your needs. To learn more about how to start a business in Maryland, contact the SBDC, or visit the Maryland Comptroller website for information on how to obtain licenses and permits.
6. Open Business Bank Accounts
Once you’ve registered your business and obtained the required licenses and permits, you need to open a business bank account. This will allow you to keep your personal and business expenses separate, which is important for tax purposes. When opening a business bank account in Maryland, you’ll need to provide the following information:
- Business name and address
- Owner’s name and Social Security Number
- Type of business and relevant licensing
When choosing a bank, be sure to compare interest rates, business banking fees, and other services offered. You also want to make sure the bank has a strong online presence so you can manage your finances from anywhere.
7. Learn About Intellectual Property Ownership
When starting a business, one of the most important things you can do is protect your intellectual property. This includes your trademarks, copyrights, and trade secrets. It’s important to understand how these protections work and how to enforce them.
Trademarks are created when a company uses a name, slogan, or logo to identify its products or services. A trademark can be registered with the US Patent and Trademark Office for protection. If someone else uses your trademark without permission, you can sue them for trademark infringement.
Copyrights are automatically granted to the creator of an original work of authorship. Copyrights protect works such as books, articles, songs, and software. If someone copies your copyrighted material without permission, you can sue them for copyright infringement.
Trade secrets are any type of information that gives your business an economic advantage over competitors. The law does not protect trade secrets in the same way it protects other forms of intellectual property, but you can use confidentiality agreements to prevent others from using or disclosing your trade secrets. You also need to be diligent about how you handle trade secrets. For example, you should make sure employees and contractors sign confidentiality agreements before disclosing any trade secret information.
If someone else is using your intellectual property without permission, you can sue them for infringement or misappropriation.
8. Get Business Insurance
When starting a business, it’s important to protect yourself from liability. One way to do this is by getting business insurance. There are many different types of business insurance, so be sure to choose one that fits your needs. Some common types of business insurance include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: This can cover a single vehicle or a fleet of vehicles. If you have employees, it’s especially important to get auto insurance because your employees drive business vehicles.
- Workers’ compensation insurance: If you have employees, it works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Professional liability insurance: This protects your business against claims of professional negligence, such as income tax errors.
- Product liability insurance: This covers damages caused by defective products.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
Be sure to do some research before choosing an insurance plan and/or company, as there are many different providers with various coverage options. Some companies even give discounts for purchasing multiple types of insurance through them.
9. Establish Your Accounting and Tax Filing System
When starting a business, you need to set up a system for accounting and taxes. This will help you stay organized and ensure that you’re meeting all of the requirements of the Internal Revenue Service (IRS).
The most basic accounting system is the cash basis system. Under this system, you only record transactions when cash changes hands. This can be a good system for small businesses that don’t have a lot of transactions.
If your business has more complex accounting needs, you may want to use the accrual basis system. Under this system, you record all transactions, even if cash hasn’t changed hands yet. This system is more common among businesses.
You also need to set up a system for tracking tax accounts, payments, and filings. The IRS has a list of who needs to file taxes and how often. You can use Tax Form Requirements for Business Structures to find out how often you need to file taxes.
You’ll also need to file an Employer Identification Number (EIN) application with the IRS. This is how the IRS identifies your business, so you’ll need it to file taxes and open a bank account. You can apply for a federal Employer Identification Number (EIN) online or by mail.
10. Create a Marketing Plan
When starting a business, it’s important to have a marketing plan in place. This will help you identify your target audience and how you plan to reach them. It will also help you track your progress and make adjustments as needed.
There are many different types of marketing, so be sure to choose one that fits your business. Some common types of marketing include:
- Paid and Pay-Per-Click Advertising (PPC): This includes traditional forms of advertising, such as TV, radio, and print ads. It also includes online advertising, such as Google AdWords and Facebook Ads.
- Public relations (PR): This includes activities such as press releases, media interviews, and social media outreach.
- Search Engine Optimization (SEO): This is the process of optimizing your business website for search engines, so you show up in relevant search results.
- Social Media Marketing (SMM): This includes building a following on social media sites, such as Facebook and Twitter.
Most businesses use a combination of marketing strategies. However, your marketing plan may also include more unconventional ways to reach potential customers, such as hosting in-person events.
Once you have your plan in place, you need to make sure everyone on your team knows how they can help market the business. You should also regularly check how well your marketing strategies are working to make sure that you’re reaching the right people for the best price.
11. Obtain Funding For Your New Maryland Business
Starting a business can be expensive, and many entrepreneurs need to obtain funding in order to get their businesses off the ground. There are a variety of ways to obtain funding, and the best option will depend on your business and its needs.
Some common business funding options include:
- Personal savings
- Family and friends
- Business credit cards
- Angel investors or venture capitalists
- Small business loans from banks or other lenders
No matter how you obtain funding, it’s important to create a budget and track your expenses closely. This will help you stay on track and make sure you’re using your resources efficiently.
Depending on the type of funding you are seeking, you may need a Certificate of Status from the state showing you are in “good standing”.
12. Recruit and Hire Employees
Finding the right employees is essential for any business in Maryland. You’ll need to find people who are passionate about what they do and are a good fit for your company culture.
There are a few ways to recruit employees:
- Job boards: Job boards are a great way to find qualified candidates. You can post your job openings on websites like Indeed, Monster, and CareerBuilder.
- Social media: Social media is a great way to reach potential candidates. You can post about your open positions on your company’s Facebook page or Twitter account. You can also search for keywords related to your job opening on social media sites like LinkedIn and Twitter.
- Referrals: Word of mouth is still one of the best ways to find quality employees. You can ask current employees to refer their friends or family members for open positions.
Once you find qualified candidates, here are a few things to consider:
- Do their personalities match the company culture?
- What are their qualifications? Do they have the necessary skills for the position? If not, how can they be trained?
- How will this person contribute to the team dynamic?
- Will you need to hire additional employees to support this new employee?
13. Stay Organized
Running a business can be a lot of work, and it’s important to stay organized to make sure you don’t miss any important tasks. The best way to stay organized is to create a system that works for you and stick to it. Here are a few tips:
- Make a list of all the tasks you need to do each day, week, or month. This will help you stay on track and ensure that you don’t forget anything important.
- Create folders or folders on your computer for different types of documents. This will make it easy to find what you’re looking for when you need it.
- Use a calendar or planner to keep track of appointments, deadlines, and other important dates.
- Set up a filing system for your records. You can do this digitally or by using filing cabinets.
- Create a schedule that works for you, and be consistent with how you use your time to avoid wasting any opportunities.
14. Open for Business
Once you have all of the above in place, you’re ready to open your business. There are a few things to consider when opening for business:
- Is your website ready? Have you checked your links? Have you completed any marketing campaigns that will help drive traffic to the site?
- What’s in your store or how is it set up? Think about how customers can find what they’re looking for easily.
- If you have employees, how can they best assist customers? Have you trained them on how to answer common questions?
- Have you communicated to the public how they can contact you? Have you created a customer service policy and how customers should expect to be treated?
If you’re concerned about how to start a business in Maryland, there are many resources available. You can connect with other entrepreneurs by joining your local chamber of commerce or starting an online professional network.
If you want to connect with government officials and get information on how to start a Maryland business, visit the Maryland Business Express website. You can learn how to write a business plan, how to register your business, how to find funding and more.
There are also many other resources available:
- Small Business Administration (SBA) | Baltimore Division
For more information on opening your own business in Maryland, visit the Maryland Business Resources website.
How to Finish Your Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!