Starting a business in Rhode Island is easy, just follow these 10 steps
Step 1: Make A Plan For Your Business
The first and most important step is professionally planning your business venture. Financials, objectives, strategies, your target market and pitch, etc. 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 ones who are serious.
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.
Don’t know what kind of business to start?
Our friends over at howtostartanllc.com 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 Rhode Island Business
Your next major task is going to be registering your business with the state of Rhode Island. 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:
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: Determine Your Tax Obligations
Navigating the Rhode Island tax code is smooth and invigorating unless you’re starting a solar energy company or something along those lines. In large part it depends on what kind of business structure you create, how many employees you have, etc. Don’t forget to investigate incentives, credits, and kick-backs because some may apply!
Take Action: Head to the State of Rhode Island Business Taxes, Division of Taxation section, and sign up to get your tax ID number. Bookmark their Online Services page as well because it’s going to come in handy.
Step 4: Obtain Necessary Business Licenses And Permits
Rhode Island was the first state to declare its independence and the first to pass anti-slavery laws so their regulatory environment is very pro-people, which includes entrepreneurs. Over the last few years they’ve been making it better and better to do business in the state, despite its small size.
- For DYI’ers create an account on RI.gov’s Business Registration section after you have your RI tax ID to see if you’ll need to get licensed.
- If you need help with this step, a Business License Service is what we recommend. They determine everything required on Federal, State, County and Municipal levels, get the forms, and provide step-by-step filing instructions.
Step 5: 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 three steps:
- 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 and national banks, like Chase, both have their perks.
- 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.
- 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.
- 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’ finances!
Step 6: Choose A Location For your Business
Rhode Island is the hidden gem of the northeast with one area code but easily some of the most stunning coastline, from Warwick more inland to Newport and Charlestown. You’ve got Boston just to the north, New York to the southwest and Hartford right next door so what more could you ask for when choosing a location for your business?
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: Fund Your Business
Because of where it’s located you have access to everything from VC networks and angel investment funds to private/state-level programs, conventional lenders, credit options, social lending, and so forth. Then there’s the internet with options like CrowdFunding, so get busy. Just be sure you know exactly how much is needed to get your business off the ground.
Take Action: The email course we mentioned in Step 1 really comes in handy here because planning and finances go together like peas and carrots. You can also browse our guide on How to Finance a Business to start generating ideas.
Step 8: Create Your Business Website
Somewhere along the line you’re going to need to design and publish a professional website to represent your brand in the digital sphere. It also REALLY comes in handy in our next step to starting a business in Rhode Island which has to do with brand expansion. Remember, it’s about simple navigation and catering to your ideal user - not being expensive or complicated.
Take Action: The first step is finding the right platform, which thankfully there are some great options out there. Head on over to our reviews of the top two in our book (Wix and Weebly) to get a head start if you don’t already have this in the bag.
Step 9: Market Your Business
This part of the journey can be as quick and painless or as complex as you want it to be. The absolute truth is there’s no right or wrong way to market, not in reality. Crony capitalism aside, the free market determines a brand’s fate but you can increase your odds by continuously using your brand as a way to open doors of opportunity – network!
Take Action: Each and every day, and this goes as much for you as an individual as an entrepreneur, try to make a legitimate connection with an ideal customer/user/client. How does your product or service make their life better and more efficient?
Step 10: Continue Learning And Stay Inspired
Consider the Startup Savant team in your corner, always at the ready to keep you on your toes and motivated. This platform we’re building can be a reliable source of valuable info and insight from fellow change-makers, dreamers, visionaries and ambitious creatives.