How to Start a Business in Connecticut(7 Simple Steps)

A jumping businessman in front of an outline of Connecticut

Starting a business in Connecticut is easy, just follow these 7 steps

Step 1: Make A Plan For Your Business

The first step you should take toward starting a business in Connecticut is creating a detailed business plan. Designing a well-rounded plan is crucial for securing funding, managing cash flow, and tracking your progress as your business grows and evolves.

Here are a few things you’ll want to focus on during this process:

  • Your pitch. A super-distilled one-page summary of your plan, hitting all the bullet-points below and more.

  • Your unique selling proposition (USP). A short phrase defining the core mission of your business. For example, our USP at Startup Savant is “Entrepreneurship Simplified.”

  • Your target market. Who you’re selling to (specifically) and where to find them (specifically).

  • Your marketing plan. How are you going to promote your business? Through social media? If so, which platform? Paid advertisements? If so, where, and how much do you intend to spend?

  • Milestones. What do you hope to achieve in the next 3 months, 9 months, or 2 years? Of course, these are bound to evolve over time, but setting goals is a great way to stay motivated and track your business’s performance over time.

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If you’d like to take more detailed look at business planning, check out our free business planning guide. This guide runs through all of the basics, including how to create a USP, design a marketing plan, craft an executive summary, and take care of everything else you need to include in your plan.

If you're feeling a little overwhelmed by this step, a business planning software might be the perfect solution for you. There are a bunch of programs out there that provide step-by-step guidance all along the way, and tons of tools to help you stay organized. Head over to our top business planning tools guide for details on the best programs available.

Business Ideas: Find the Idea That Fits You Image

Don’t know what kind of business to start?

Our friends over at have compiled a massive list of business ideas, ranging from personal styling to axe-throwing businesses.

If you’re having trouble finding the perfect business idea for you, we encourage you to check them out!

Step 2: Register Your Connecticut Business

Your next major task is going to be registering your business with the state of Connecticut. Before you can do that, though, you have to figure out what type of business structure you want to form: an LLC, S corp, C corp, or sole proprietorship. Then, you can read our detailed guide on naming your business. Let’s take a quick look at each of the business structures:

The first thing you need to consider is which structure will best suit your business. There are several to choose from, and each has different requirements for your business’s management structure, liability and taxes. Choosing an appropriate structure is one of the most important decisions you’ll make for your business, so it’s important to choose wisely. The main options are:

  • LLC (Limited Liability Company): LLCs are the most popular business structure because they offer the protection of a corporation without the double taxation or intensive legal upkeep. If you choose to form an LLC in Connecticut, you’ll have more flexible taxation options -- for example, if your company has at least two members, you can choose to be taxed as a partnership or corporation.

  • S Corporation: More formal structure, with up to 100 shareholders, a board of directors, and corporate officers. No corporate taxation, though, as all income/loss goes through the shareholders’ personal tax returns.

  • C Corporation: Organized the same as S corps, but there’s no limit to the number of shareholders you can have. C corps are the only structure that face double taxation, meaning the business and the shareholders are both required to pay taxes on the profits. Check out our guide for more information on how to form a corporation in Connecticut.

  • Sole Proprietorship: The least hassle, but the most risk. If you’re operating without any partners and haven’t registered a formal business structure, you’re automatically classified as a sole proprietor. No need to file articles of incorporation/organization, but you might benefit from filing a DBA.

If you’re torn between structures and need some more help deciding, take a peek at our business structure comparison guide.

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Once you’ve decided on the best structure for your business, you’ll need to select a registered agent, file formation documents with the state, and see to other legal matters.

It can be quite a task, especially if you’re trying to take it on by yourself. If you feel like you’re being stretched a bit too thin, there are some fantastic services out there that will take care of everything for you. Head over to our top 7 incorporation services for a look at our favorites.

Step 3: Determine Business Licensing and Tax Obligations

In Connecticut, general business licenses are issued locally, and they’re not required for all business types.

Connecticut Tax Registration numbers, on the other hand, are required for all businesses in order to engage in the sale of goods and services. You can apply for a TRN through the CT Department of Revenue Services.

After obtaining a general business license (if you need one) and a TRN, you may still need a few more licenses/permits in order to be compliant. Here are the best resources we’ve found on this subject on a federal, state and local level:

  • Federal: The Small Business association website has some helpful information on federal tax requirements and federal licenses and permits, and the IRS business taxes page is also a great resource.

  • State: You can apply for a Connecticut business license through their eLicense website. Additionally, the Connecticut Secretary of State website has a Business Startup Tool that offers a ton of information, including a page on all their licensing requirements.

  • Local: For information on municipal requirements, you’ll need to contact your local chamber of commerce.

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If all you need is a general business license, this step is totally doable without expert assistance. However, if you find that you need quite a few licenses/permits on a federal, state and local level, you may want to look into using a business license service. These companies specialize in helping new businesses like yours stay compliant with all regulations by doing all the heavy lifting on your behalf.

Step 4: Separate Your Personal and Business Assets

Using dedicated business banking and credit accounts is essential for personal asset protection.

Now that you’ve made it through registering and setting up taxes and licensing for your business, you’ll need to take steps to protect your personal assets and establish your business as an independent entity.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

You can go a long way in protecting your assets with these five steps:

  1. Open a business bank account.

A business bank account separates your personal assets from your company's assets, which is necessary for personal asset protection. A designated business bank account also makes accounting and tax filing easier.

To open up a bank account for your business, you’ll need to obtain an EIN (Employer Identification Number). You’ll use your EIN in place of your social security number so that this account is completely separate from your personal finances. After this, start doing your research on various business bank accounts. Local options, like Liberty Bank and Webster Bank, and national banks, like Chase, both have their perks.

Recommended: Read our Best Banks for Startups and Entrepreneurs review to find the best online bank, eCommerce banks, the best for tech startups, real estate investment banks, and more.

  1. Get a business credit card.

A business credit card helps you separate personal and business expenses. A business credit card will also build your company's credit history, which can be useful to raise capital later on.

Learn about the best small business credit cards here.

  1. Designate an authorized representative.

Make sure all documents are signed by a representative of your LLC and not by you (or other LLC members) directly. This will help separate you from liability incurred by the LLC.

  1. Keep your accounting and bookkeeping up to date

Make sure to sync up your banking and credit card accounts with an accounting software like QuickBooks as soon as you get the chance. It’s never too soon to start organizing your business’s finances!

  1. Learn how to build business credit

A good business credit score will help establish your business’s fundability. It can help with many things, including credit cards that are issued in your business’s name and score instead of depending on your personal credit score, better interest rates on loans, higher lines of credit, and more.

Step 5: Fund Your Business

Now that you have a financial foundation in place, it’s time to figure out how to fund your business.

There are tons of funding opportunities out there, including angel investors, microloans, trade credit, crowdfunding, and many more. However, some funding opportunities will suit you better than others depending on the size of your company, your level of financial security, whether or not you’ve established credit, and some additional factors.

Our guide on how to finance a business outlines all the major strategies to help you decide which ones are most likely to work for you. We highly recommend giving it a read when you’re ready to start researching funding opportunities.

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Step 6: Build Your Business’s Brand

You’ve taken care of most of the initial paperwork by now, so it’s time to work on building your brand.

Creating a professional brand that appeals to your target market is essential to effectively marketing your business and bringing in the right customers. There are a number of things that impact your brand image, but two of the major ones are your business logo and website.

When you’re ready to start designing your logo, keep the following objectives in mind:

  • Capture the essence of your business. Design a logo that reflects the nature of your company. Think about what your color, imagery and font choices will imply about your brand, and what else they’ll bring to mind for your target audience.
  • Differentiate yourself. Before designing your logo, take a look at some of your primary competitors’ logos. You want folks to be able to differentiate your business from the competition, so it’s a good idea to choose a color scheme and other physical characteristics that will help you stand out in the market.
  • Make it memorable. Aim to create a sleek, bold design that will leave a lasting impression in people’s minds.
  • Hire a professional. Unless you’ve got a professional designer on staff, it’s a wise idea to outsource this task. Designing a logo is a significant step for your business, so it’s worth investing a few bucks to get it professionally done.

You can also use our free logo generator tool to make a logo yourself! No design experience necessary!

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Your business website is another hugely important aspect of your brand image. A great way to create a beautiful, professional website for your business is to use an existing web-building platform like GoDaddy. This way, you won’t have to expend the time or money involved in building a website totally from scratch. Head over to our top business website builders for our recommendations.

Step 7: Market Your Business

The final step of this guide is one that never ends: marketing your business.

Marketing will play a major role in the trajectory of your new business, and it requires consistent effort and care in order to be successful. Here are a few things to keep in mind during your marketing journey:

  • Know your target market. In order to effectively market your business, you need to know who your target demographic is. Sure, you could invest in ads on YouTube or FaceBook, but if the content isn’t crafted with your target audience in mind (or if they aren’t even active on that specific platform) you’ve just wasted your time and money.
  • Don’t spread yourself too thin. There are tons of marketing approaches out there, but that doesn’t mean you should try them all. Instead of making half-hearted attempts at content marketing, social media, SEO and email campaigning all at once, concentrate on one and do it well.
  • Be willing to evolve. Once you’ve established a marketing strategy, you should definitely stick with it long enough to see if it gets results -- but if it doesn’t quite pan out as planned, don’t be afraid to switch it up. You should be willing to make adjustments, or even switch gears completely if that’s what you have to do to reach your target market.
  • Don’t get distracted by vanity metrics. Sure, it’s great to get clicks, likes and views, but if your marketing efforts aren’t generating any sales, it’s time to head back to the drawing board.
  • Leverage software. Marketing a business is hard work, but you don’t need to do it all on your own. There are tons of free/inexpensive programs out there that can help you schedule social media activity, craft professional emails, calculate ROI, and more.
Resource Recommendation:

There’s so much more to say on this topic, but it’s too much to cover here. We encourage you to read through our definitive guide to marketing a business for an up-close look at all of the topics we discussed above, and many more.

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