How to start a business in Alabama

10 Simple Steps

STEP 1) PLAN YOUR BUSINESS IDEA

Write a Business PlanAt Startup Savant, we believe the first most powerful step to any successful Alabama venture is the business plan; your brand’s map into the future. Along with being required to secure funding, a professional business plan also supports growth, helps manage cash flow and distinguish fly-by-nights from the real McCoys.

Take Action: Check out our 100% free Business Planning Guide designed to get you from A-to-Z as pleasantly as possible. Plus, we provide access to tons of other great tools along the way.

STEP 2) CHOOSE BUSINESS STRUCTURE & REGISTER

How to Choose a Business StructureThe next step is to decide which business entity is right for you and then register it with the state. Regardless of the type, once incorporated you and your brand will be protected and gain a variety of tax breaks. Most importantly, your personal assets (house, personal bank account, etc) will be protected.

Most entrepreneurs form an LLC because it has all the benefits of a Corporation without the disadvantages like double taxation, board of directors or corporate officers. However if you’re trying to take your company public or raise substantial outside capital, you should probably form a Corporation.

Take Action: Since this step is so important and expensive if it’s not done correctly, we highly recommend investing 10 minutes to go over your options through our business structure comparison guide. You’ll get a better idea of the advantages and disadvantages of each while building a solid legal foundation for your business.

STEP 3) TACKLE ALABAMA TAX OBLIGATIONS

Small Business TaxesNice! Once you’ve named, registered and incorporated tax time’s going to be much less of a hassle. From low sales and income tax rates to competitively priced utilities, you’ll likely find Alabama to be very hospitable. They’re about smart-incentives that promote growth and development.

Take Action: Head over to My Alabama Taxes (MAT) through the Alabama Department of Revenue. Consider it your one-stop-shop for all their eServices. Be sure to thoroughly understand your tax obligations as an Alabama small business so you’re totally compliant and don’t run into any issues later.

STEP 4) OBTAIN LICENSING & PERMITS

Business LicensesTruth is, you might not need anything but a general business license. For example let’s say you’re just going to rent some office space to support your ecommerce store. Or maybe you intend on opening up a food joint? Point is, in order to conduct business in the state you’ll need to finish off the paperwork/red tape.

  1. For the DIY’ers you’ll be able to get all your ducks in a row through the MAT Business Licensing Section. Just be sure you know what you’re doing and reach out to them if you have any questions.
  2. If you need help getting everything together, a Business License Package is very helpful. They determine everything required on Federal, State, County and Municipal levels, get the forms, and provide step-by-step filing instructions.

STEP 5) OPEN A BUSINESS BANK ACCOUNT

Best Business Bank AccountYour company needs its own official business bank account to leverage the many benefits (depending on the institution you bank with) and to ensure your business financials are all in one place. This keeps your personal and business assets separate so you’re fully protected as a business owner.

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STEP 6) PICK A STELLAR ALABAMA AREA

How to Choose a Business LocationThe Heart of Dixie’s got it all, from the bustle of Birmingham to strong job markets like Auburn or Prattville outside Montgomery; from the mountains in the north to southern beaches around Mobile Bay. So what’s it going to be? Where will you open your doors?

Take Action: We know picking a spot can be tough if it doesn’t somehow happen naturally through your personal/professional networks. If you’d like to brush up on everything that goes into making this decision, refer to our friendly guide on How to Choose the Perfect Location.

STEP 7) FINANCE YOUR BUSINESS

How to Finance a BusinessSooner or later, chances are your brand will need outside funding and Alabama is again, very hospitable. There’s a strong small business development network throughout the state you can tap into early on or approach later. Don’t forget about social lending and CrowdFunding though, as both are great resources for Alabama startups.

Take Action: The email course we mentioned in Step 1 really comes in handy here because planning and finances go together like fried chicken and biscuits/waffles. You can also browse our guide on How to Finance a Business to start generating ideas.

STEP 8) BUILD A BUSINESS WEBSITE

Build a Business WebsiteIf you already have a great website in place, well done! If not, then it’s time to tackle this aspect of modern business. You’ll be taken far more seriously, it’ll add tons of credibility and really expand your marketing potential.

Take Action: The first step is finding the right platform, which thankfully there are some very good options. If you’d like our recommendation, grab a free trial to Wix or Weebly. They’re the easiest to use and have the best prices. No previous tech-skills required.

STEP 9) MARKET YOUR BUSINESS

Social Media ChannelGet out there! Start mingling with your marketplace, both online AND offline. Alabama has a lot of traditional bones in her body that go WAY back. Remember, this truth will never change: “It’s who you know and how you know them.” Start shaking some hands.

Take Action: Make it a point every single solitary business day to really connect with at least one current or potential client/customer. Where are they? What activities are they interested in? What’s their commute like? There’s no marketing like understanding your prospects.

STEP 10) CONTINUE LEARNING & STAY INSPIRED

Sign Up For Entrepreneur InterviewsTo help you keep chugging along when the going gets tough, Startup Savant continuously interviews fellow change makers from across the country. We believe there’s no greater source of education than listening to those in the trenches, building tomorrow.

Take Action: Follow us on Facebook and Twitter to tap into our daily feed filled with tips, lessons, and inspiring stories directly from entrepreneurs like you.

Alabama Startup Toolkit

Out of all the resources available to help you start a business in Alabama, here are the two we believe in most. With an online incorporation service and business plan software, you'll take the first steps toward bringing your idea to life and having a solid plan behind it.

Incorporation services register your business with the state and handle all paperwork. For as low as $49, they'll bring your business to life by registering your LLC or Corporation in record time.

See The Top 7 Options
And

One of the most important aspects of starting a business can also be the most tedious: the business plan. A business plan software will walk you through the entire process in half the time.

See The Top 7 Options