How to start a business in Washington, DC
Small business owners seeking a diverse and educated workforce, steady economy, and excellent infrastructure can find all that and more in Washington, DC. The US capital is an increasingly popular city for startups and companies from various industries due to its proximity to the federal government and ready access to R&D money—an attractive benefit for tech entrepreneurs in particular.
When you’re ready to start your new District of Columbia business, you’ll begin your journey by developing a detailed business plan, conducting market research, and figuring out startup costs. After that, you’ll need to comply with DC’s regulations, including selecting the right business structure, registering your business with the municipality, and filing your taxes correctly.
Sound daunting? Our straightforward, step-by-step guide will explain how to set up a Washington, DC business compliantly.
1. Name your business
You need a great business name for your idea before you can set up shop. However, before you officially settle on one, there are a few regulatory compliance steps you need to take. Here’s what to do:
- Check the Washington DC Business Entity Search online database to make sure the business name you chose is available. You’ll need an Access DC account to use CorpOnline, the city government’s online portal that allows you to register new domestic and foreign corporations, order good standing certificates, and perform other regulation-related business functions.
- Ensure your business entity’s name meets the district’s naming criteria. Among other rules, Washington, DC prohibits using words like “Treasury” or “FBI” in business names to prevent them from sounding like official government institutions. You’re also restricted from using terms for financial institutions, like “bank” or “credit union,” without the Mayor’s approval.
- Do a search on the US Patent and Trademark Office website to ensure the business name you chose hasn’t already been trademarked.
If you’ve selected a business name but aren’t ready to register it, the District of Columbia allows you to reserve the name for 120 days. Just fill out the proper forms on CorpOnline and submit them—along with a filing fee of $50—to the Washington, DC Department of Consumer and Regulatory Affairs (DCRA). Incidentally, the DCRA is the department you’ll actually register the name with when you’re ready to go through the process and make your business name official.
Additionally, it’s good practice to register a web domain name and social media accounts right away so nobody else can use them.
If a business name doesn’t contain the full legal names of the owner(s), you’ll need to register a trade name—DC’s term for a fictitious name or a “doing business as” (DBA) name—through CorpOnline with your Access DC account. Under DC regulations, this applies to all business types, regardless of structure.
2. Explore your funding options
As you decide how to fund your business idea, make sure you look into District of Columbia grants, small business loans, and federal programs before you settle on a choice. You can read more about the current funding opportunities on the website of the Office of the Deputy Mayor for Economic Planning and Development, but here’s a brief overview:
- Vitality Fund. This DC government grant is intended to attract high-growth employers to the District by providing funding for companies with 25 or more employees that commit to hiring locally and settling their business in a specified area of the city.
- Creative and Open Space Modernization Grant. This grant is specifically focused on tech companies, with the intent of attracting technology startups and entrepreneurs to the District and creating jobs.
- Federal loan programs. In addition to local government grants, the federal Small Business Administration (SBA) offers a variety of resources to new business owners and small businesses, including start loans and access to business coaching. You can learn more on sba.gov.
3. Decide on your business structure
The business structure you choose for your company determines a lot of things, including your personal liability, how much you pay in taxes, and what types of investment opportunities you’re allowed to offer, so it’s crucial to pick the right one. Below, we’ll go over the six major business entity types in DC.
If you are starting a small business, there is no shortage of advice on the steps you should take: registering your business name, getting a Tax ID, deciding on a business structure and applying for the needed permits and licenses. While these are all very important steps to take, a business plan will be central to how you start, grow and develop your business.
Here are 5 reasons why you need a business plan:
1. It will help you steer your business as you start and grow.
Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan like a GPS for how to structure, run, and grow your new business. It’s a way to think through and detail all the key elements of how your business will run.
2. It’s not as hard as you think.
A business plan is a written tool about your business that projects 3-5 years ahead and outlines the path your business intends to take to make money and grow revenue. Think of it as a living project for your business, and not as a one-time document. Break it down into mini-plans – one for sales and marketing, one for pricing, one for operations, and so on.
3. It will help you to reach business milestones.
A well-thought-out business plan helps you to step back and think objectively about the key elements of your business and informs your decision making as you move forward. It is essential whether you need to secure a business loan or not. Keep in mind that the plan does not have to be like an encyclopedia and does not have to have all the answers.
4. It can help you get funding.
Business plans can help you get funding or bring on new business partners. Having one in place will help investors feel confident that they will see a return on their investment. Your business plan is the tool you will use to persuade others that working with you (or investing in your business) is a smart decision.
5. There’s no wrong way to write a business plan.
There is no right or wrong way to write a business plan. You can pick a plan format that works best for you. What’s important is that your business plan meets your needs. Most business plans fall into one of two common categories: traditional or lean startup.
Traditional business plans are more common, use a standard structure, and encourage you to go into detail in each section. Traditional plans tend to require more work upfront. Lean startup business plans are less common, but still use a standard structure. They focus on summarizing only the most important points of the key elements of your plan. They can take as little as one hour to make and are typically just one page.
Because knowing where to start can be challenging, the SBA has tools to help make writing a business plan less intimidating and time consuming. The SBA offers a Business Plan Tool that helps simplify the process. The tool consists of eight easy-to-follow steps to help create a well-prepared plan.
To learn more about putting your business plan together, go to the SBA’s online Learning Center and take the self-paced course on How to Write a Business Plan. The course explains the importance of business planning, describes the components of a plan, and provides access to resources and sample plans. You can also take a look at the SBA’s Business Planning Guide for more information and to view business plan templates.
If you want a more hands-on approach, you can get assistance from an SBA resource partner to help complete your business plan. Working with a mentor or counselor from SCORE, a Small Business Development Center or a Women’s Business Center can help with all aspects of starting, growing or expanding your business.
How to start a business in Washington, DC
5 reasons you need a business plan
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