Starting a business
There are several key steps to launching a business in the City of Sacramento and they will vary according to the type of business you intend to start. Follow these guidelines to help you move in the right direction.
1. Create a business plan and do a needs assessment – A business plan is the blueprint for your new venture. It is a guide, mapping out the course of your business. Determine what your future needs will be, where your business location will reside.
2. Establish a legal business structure – Consult an attorney or tax accountant for guidance on determining how your business is established. Depending on how you establish, it may require you to register with the Secretary of State’s Corporate Legal Unit.
3. Choose a location and check zoning regulations – Determine if you will have vendors or customers who come to you, employees, etc. you should also contact the City’s Community Development Department before finalizing location plans or lease agreements to determine if your business location is zoned for the type of business you want to run. There are other considerations for the building that you would want to discuss with them. Contact the Community Development Department or the Business Environmental Resource Center for more information.
4. Explore the options for financing a business – Financing a startup business may require personal savings, a second income stream, help from family and friends, or a combination. External financing sources are also options and a worthwhile first stop is the Small Business Administration. Visit the Business Assistance and Resources section (link to business assistance and resource webpage) for more information about small business financing.
5. Register a fictitious business name – If you give your business a name other than your own, you must file a fictitious business name (FBN) statement with the Sacramento County Department of Finance.
6. Obtain a business operations tax certificate - Once a fictitious business name has been registered with Sacramento County, a business operations tax certificate (BOT) from the City’s Revenue Division is needed. The BOT is not a license to conduct business at a specific location, but a tax levied on businesses that operate within the City of Sacramento. After filing the BOT application with the City, the Revenue Division will contact the Community Development Department to ensure that the business will be conducted in an appropriately zoned location. This process is quick and can be completed within three days.
7. Review the hiring process before you hire – Here are the basics:
- Get a Tax Identification Number. If you intend to employ anyone outside of your immediate family, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
- Contact Social Security. Those who are self-employed and employers with one or more employees must pay Social Security taxes.
- Register with the state Employment Development Department (EDD) within 15 days of hiring employees. EDD regulates state disability insurance, unemployment insurance taxes, income tax withholdings and employment training taxes.
- Obtain Workers’ Compensation information from the State Industrial Relations Department
- Contact Sacramento Works for free employer services.
- Register for State permits with the Board of Equalization – Businesses selling tangible personal property in the state of California must apply for sellers’ permit/resale numbers by contacting the state Board of Equalization.
8. Obtain tax information – Once each year, every business in the state of California is required to submit a Business Income Tax Statement to the Franchise Tax Board (FTB). For filing information, contact the FTB or a private accountant. Business owners can also download Striking Gold in California, which outlines the state tax system for businesses.
9. Obtain important local permits – Several permits may be needed to comply with local and state building codes, including:
10. Other useful resources: