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How to Start a Business

Starting a new business is a big moment, one filled with excitement, fear, and courage all at the same time. Most of the time you've had to give up a steady paycheck to get here but now it's your turn to be the boss. Your best laid plans are before you but the process is confusing and nobody really tells you what you need to do and in what order. It's the same thing people say when they have a baby, "where's the instruction manual on this thing!"


Here are some steps to take to get the business set up and things you need to do before you hit the job.


Step One - Deciding when to start a business


The difference between a business and a hobby is whether or not there is "reasonable expectation of earning a profit." Once your side project starts becoming your main project, it might be time to start a business. If you have street and book-smarts you can make it happen but keep in mind that you will need both. The most important part is the skill- if you are confident that you can perform just as well on your own, it might be time.

Come up with a business plan and work out the numbers: how much can you make and what will your expenses be? The first thing that derails a start-up is guessing the expenses wrong. Be conservative and add 10% to whatever you are expecting. Talk to someone in your industry that has done it before and find out what you might have overlooked.


Step Two- Register your business


For Florida: , click on Start a Business

For Alabama:

For Georgia:


Sole Proprietor- Use your personal name to start a business, making you personally liable for all business activities. Business income is reported as personal income on your individual tax return. This is the quickest and easiest way to get started.

Partnership- Two or more partners offer joint services but face similar risk and taxes as Sole Proprietors.

LLC- Limited Liability Corporations allow the owner to distance themselves a bit from company debt and liability but are taxed similar to sole proprietors. Probably the most common form new businesses take our experience.

S Corporation- Distinct legal entity that can enter into contracts but taxes are passed through to the owner similar to Sole Proprietors. S Corps face higher regulations, such as bylaws, stock, Directors and Officers requirements. Unlike the previous organizations, ownership is transferrable and there is greater liability protection for the owner. If you are looking to pass a business down to someone else, this is a good option.

C Corporation- Most larger corporations (like the Fortune 500 guys) are C Corps because of the protection it gives owners, the indefinite nature of the entity, and the unlimited number of owners available through the issuance of company stock. Taxed as an entity and taxed again as an owners, this is known as double taxation and could be a burden for new organizations. This structure makes most sense for larger organizations, often ones that have grown from the earlier listed types.


Click here for more info on these from the SBA. Filing fees to form a new entity range, but are typically between $50-150 and remember, you need to keep it in compliance year after year. It's not something you set up once and can leave alone forever.


The decision of which entity to choose should be made with great care and possible with consultation from an attorney and accountant because there are legal and tax implications for all of them. If you're thinking of starting a new businesses in Fort Walton Beach, Destin, Navarre, or anywhere in the panhandle just give us a call and we can point you in the right direction.


If you know what type of organization you want, move on to step two. From an insurance standpoint, the price is based on payroll or sales so the entity type usually makes little difference.


Step Three - Licensing and Tax Collector






In Fort Walton or Destin, you can get this all done in person at the tax collectors office in Shalimar. In Miramar Beach and Walton County, your tax collectors office is in Defuniak.


Okaloosa County- 1250 N. Eglin Parkway, Suite #101, Shalimar, FL 32579

Walton County-     571 East Nelson Avenue, Defuniak Springs, FL 32433


Alcohol industry, Community Association Managers, Contractors, Hotels, Restaurants, Real Estate Brokers/Agents are among those listed with special licensing requirements. Fees range depending on the industry from $50 to thousands for the appropriate license. Again, ask someone who is in your industry that has gotten through it to learn what to expect.


Most of these industries require pre-licensing education, examinations, and applications. Be aware of these requirements, which can sometimes take months to complete. The General Contractor's license in Florida may be one of the most difficult to get due to the extensive education and testing requirements, which should be a source of pride for those who have accomplished it and a source of comfort for those hiring a contractor. Real Estate Agents and Insurance agents undergo continuous pre and post licensing education, always seeking to stay on trend with the latest changes.


Taxes- in short, 1099 forms are used for subcontractors and W2 for employees. To apply for a Tax-ID or EIN number, click here. If you're looking for a workers compensation policy, a Tax-ID number and W2 employees are preferred. It's free and you'll probably need it to open a bank account. Subonctractors should be included on the insurance policy, talk to your agent about how it should be done.


If you do business in multiple states, make sure you are in compliance with that state's licensing requirements. Go to the links above and contact that state to make sure. Click here for links to the other state licensing and permit requirements.


Step Four - Insurance


Insurance can be obtained for any of the business structures listed above and can change as your business changes. If you want to start off as a Sole Proprietor and incorporate later, that's fine but before you can get to work you'll want to ensure you have the proper insurance.


General Liability is the first step, among other things it provides coverage for the general operations of your business. If the business owns any property, such as buildings, equipment, or vehicles, they should be insured as well and can often be packaged with the liability. Some contracts require certain limits of insurance or bonds, contact your agent to make sure you're getting a policy that works for you.


Workers Comp has a lot of complications. Florida has an entire website devoted to it, click here for more than you ever wanted to know. In the construction industry, it is required for any size business; but non-construction industries must provide it if they have 3 or more employees. Exemptions are also available for owners that meet certain requirements. Your insurance agent can point you to a direct workers compensation policy or a PEO, which provides additional services such as payroll and HR.


If the business name changes or you want to add something, the insurance policy can be altered so don’t worry too much about that. Whatever the correct current information is, make sure your insurance agent has it. They will want to know what kind of work you plan on doing and how many employees you plan to have, including the anticipated annual payroll (excluding the owner) so that you can be properly covered. 


You can insure basically any kind of operation but keep in mind that there is a cost-benefit to your operation. Insurance companies generally prefer a small radius of operation and a clear scope of work. For example, if you're a carpenter you may pay a certain amount for insurance, but if you work on airplanes 1% of the time you might pay 10 times that for insurance. Keep it simple and keep diverse operations separate to save money on insurance.



Step Five - Get to Work!


If you've survived this far, you can handle anything your customers will throw at you. The main point in going through all of this is to make sure that your customers are getting the most protection possible, so it's all really in their best interests. They love to see "licensed, insured, and bonded" on the side of your van because they know you cared enough to do it right, which you now know is no easy task.


Our country is a great place, where elbow grease keeps the wheels of progress turning. If you have the right skills, you can accomplish great things. If you do things correctly, you can expect steady returns; but if you choose to stray you may see short term gains but it'll catch up to you in the end.


If you have questions about any of this, give us a call. Our staff has helped countless business get off the ground, with new ones coming through the door almost every day. We've seen startup businesses grow to multi-state, multi-million dollar companies and we would love to serve your insurance needs through it all.


The views expressed here are the opinion of the author and do not attempt to make any recommendation for insurance coverage. Eligibility is determined by the insurance carrier and not all applicants will qualify. Please contact your licensed insurance agent regarding your area's coverage and eligibility.