Opening a Business in Los Angeles
Opening a business in Los Angeles can be a lucrative venture with the right planning and there are benefits who are looking to start a business in the area.4 min read
Opening a business in Los Angeles can be a lucrative venture with the right planning. Los Angeles offers a number of benefits to small business owners who are looking to start a company in the area.
Financial Reasons to Open a Business in Los Angeles
The Los Angeles County of Economic Development (LAEDC) puts annual visitors at around 45 million people. Visitors, along with the 10-million-plus residents and people who come to the city to work every day, offer an enormous potential customer base. Since the city is more spread out than others, it's important to research the area where you want to open your business to understand its demographics and see where your business would be a good fit.
Los Angeles offers different incentives to attract new business owners. The LAEDC's website lists potential federal, state, and local incentives that you may be eligible for. There are also funding opportunities for small businesses as well. If you are confused about where to begin, contact the Los Angeles Office of Small Business and learn what options might work with your intended business model.
The city is full of non-traditional businesses, and it's an ideal market for imaginative business owners. Los Angeles visitors and residents are receptive to fresh and innovative business ideas, and most creative entrepreneurs find the city's business climate to be very welcoming.
Starting a Los Angeles Business
Start by choosing the best business idea. The initial step is to decide what business you should open in the city. Narrow down ideas that showcase your best talents and fit your overall goals. If you aren't interested in the business, it will be hard to stay motivated if things get tough.
Next, be sure you are doing some careful planning. Prior to spending a lot of money and dedicating resources for this new venture, you need to develop a business plan and do a critical analysis of your idea.
Create your business by registering as an LLC or corporation, which has advantages like some personal liability protections and increased credibility in the industry. Utilizing the LLC business structure is a great option for small business owners. They are easy to establish and offer favorable tax treatment. If you opt not to register your business as one of these entities, you may be faced with personal responsibility for the debts and liabilities of your business. Non-registered businesses may still need a DBA or trade name on file.
Get registered for your taxes. Most businesses will require a Tax ID or EIN. California has special tax rules as well. You will need to register for sales tax in California if you sell products and employer taxes if you have employees.
Set up bank accounts. Use a separate business bank account and credit card if you have an LLC or corporation. Otherwise, you could open yourself up to personal liability by co-mingling funds.
Set up your accounting books and purchase software with a high rating, which will also help simplify your federal and state tax filings.
File for necessary licenses and permits, which will vary by business type. You may need health permits, signage permits, building permits, etc.
Purchase insurance, which may include professional liability, general liability, and workers' compensation coverage. Even home-based businesses should have general liability coverage, and California requires businesses to have workers' compensation insurance if you have one or more employees.
Business Questions to Ask Yourself
Before opening a business in Los Angeles, you should be able to answer a series of questions about sales and marketing, product development, and professional contacts. Ask yourself:
- Does your business solve a problem that consumers need resolving?
- What will you do to set your service or product apart from your competition?
- Who is your potential customer base?
- What marketing techniques will you use to get their attention and turn them into purchasing customers?
- What personnel will you need to hire?
- What professional relationships are needed to succeed?
- What is your break-even point?
- How will you get to that point, and where will you get the funding?
Marketing and Web Presence
Once you have your business plan in order, you need to focus on marketing efforts. How will you define your brand? Memorable, long-lasting businesses are built on a solid brand. When developing yours, think about what message your business wants to send. You also need to establish your web presence. Doing so is critical for the long-term success of any business, regardless of the industry. In addition, set up social media accounts and review-site profiles.
If you need help with opening a business in Los Angeles, you can post your legal need on UpCounsel's marketplace. UpCounsel only accepts the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.