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South Carolina consistently ranks as one of the fastest-growing US states in terms of GDP, according to the Bureau of Economic Analysis (BEA). This will come as no surprise to those familiar with the Palmetto State’s legislative incentives for small business owners, including sales and use tax exemptions and tax credits for job creators. It’s an exciting business climate for fledgling entrepreneurs. Here are eight steps to starting a business in South Carolina.
1. Choose a business idea
The first thing any aspiring small business owner must do is settle on a concept for their new venture. Every solid business rests on a solidbusiness idea. Will you sell a product or service? Perhaps a range of both? Regardless, there are two key questions you should ask yourself before moving ahead:
- Who is your customer?There’s no business without customers. Profile your targetob欧宝娱乐app下载地址, survey prospective customers, analyze marketplaces, and research industry trends. Part of this equation is deciding if you’ll selldirect to consumers (B2C) or business to business (B2B). Who are your customers? What do they do? What could they use? Will you sell online, through a brick-and-mortar storefront, or both?
- What is your projected profitability?A business ultimately needs tobreak evenand then turn a profit to be successful. There are several variables to consider in your profit strategy, including pricing, distribution, and the business costs you’ll incur as you expand your company.
2. Name your business
南卡罗来纳州一个想法为你的企业,你can make your next crucial decision:naming your business. Pick a name that’s simple, memorable, and immediately communicates what you’re selling—and follow South Carolina’s naming rules. Here are a few guidelines:
- Be original.The name of your South Carolina business must be different from any other business entity registered in the state.Run a searchof existing business entities through the South Carolina Secretary of State website to see if your desired name is available.
- Include certain words.Depending on the legal business entity structure you choose for your South Carolina business, you may have to include certain words in your business name. LLCs, for example, must contain the word “Limited Liability Company,” “Limited Company,” or an abbreviation thereof (LLC, L.L.C., LC, or L.C.). Corporations should contain “Corporation,” “Incorporated,” “Company,” or “Limited,” or their abbreviations.
- Exclude certain words.The name of your South Carolina business cannot contain words that might confuse it with a legitimate government agency, such as the FBI or Treasury.
- Reserve your name.To reserve a business name in South Carolina, file a§33-4102(a) formand pay the $10 filing fee.
- Adopt a DBA.You need to file for a DBA, or “doing business as,” if you want to operate under a name different from your registered business name. DBAs in South Carolina must comply with the same naming rules as official business entity names, meaning they must also be unique. DBAs are registered at the local county clerk’s office.
- Secure a domain name and social media handles.Being online is part of doing business today.Purchase a domain name(URL) and choose social media handles that align with your business name or DBA so customers can easily find you.
3. Create a business plan
Every business needs a rigorousbusiness plan, and South Carolina businesses are no exception. A successful business plan details your business function, including thorough market research,organizational structure, descriptions of products and services, target customer profiles, and detailed strategies for marketing, logistics, and finance.
You can draft your business plan from scratch, customizetemplatesaccording to your needs, or draw inspiration fromexamples. You may opt for a traditional business plan, a lean plan (simple and agile, only includes information management needs to know), or a specific plan tailored to a certain business type, like a nonprofit.
4. Choose a business structure and get started
There are a variety ofbusiness structuresto choose from when forming your South Carolina enterprise, each with its own advantages and drawbacks. Your business structure determines how you’re taxed, what your liabilities are, and how you’ll securefundingand capital, among other factors. Here’s how the three main structures differ:
- Sole proprietorship.Sole proprietorshipsare the default designation for anyone doing business as an individual in the US. Sole proprietorships are one-person operations, meaning earnings are taxed through the owner’s personal tax return. This way, sole proprietors avoid so-called “double taxation” (taxes on income at the business level and again at the business owner’s personal income level). The downside to operating a sole proprietorship is that it is not considered a separate legal entity; you’re personally liable for most debts or legal damages incurred by your business.
- LLC.Alimited liability company, or LLC, differs from a sole proprietorship in that it can have multiple owners, known as “members.” Like sole proprietors, members are taxed at their personal income levels. The advantage LLCs have over sole proprietorships is that members enjoy personal asset protection in relation to business debts and damages. Note that South Carolina LLCs are subject to the state’s flat 5% business income tax, and are required to file annual reports.
- Corporation.The main benefit of forming a South Carolinacorporationis the ease and scope of fundraising. Corporations can issue stocks to shareholders for an ownership stake in the company. Corporations also enjoy the same personal liability protection as South Carolina LLCs. South Carolina applies a flat 5% corporate tax on LLCs and corporations, and corporations in the state must file annual reports.
Applying for a federal employer identification number (EIN)
一旦你选择了一个正式的业务结构your South Carolina business, apply for a federal employer identification number (EIN). EINs are issued by the US Internal Revenue Service (IRS) and function much like an individual’s Social Security number. Federal and state tax authorities use your EIN to identify your business and assess its tax obligations. You can apply for an EINonline, free of charge.
Incorporating in South Carolina
The process for registering your business with South Carolina state authorities varies slightly depending on your business structure. Sole proprietorships, being the default designation for anyone transacting business in the US, do not require any special registration procedures. LLCs and corporations require specific forms and fees:
- LLCs. To register your LLC in South Carolina, file Articles of Organization using a§33-44-203 formand pay the $110 fee.
- Corporations. To register your corporation in South Carolina, file Articles of Incorporation using§33-2-102 formand pay the $110 fee.
5. Obtain business licenses and permits
Business licenserequirements vary depending on your location. Every city in South Carolina and nine of its counties—Beaufort, Charleston, Dorchester, Horry, Jasper, Marion, Orangeburg, Richland, and Sumter—require a generalbusiness licenseto operate locally. Any business engaged in retail sales must obtain asales and use tax licensefrom the South Carolina Department of Revenue for $50. If you plan to sellalcoholorfood, or offer certaintransportation services, you’ll be subject to specific industry-wide licenses.
6. Examine business insurance options
Anything can happen when running a business—from unexpectedsupply chain issuesto major weather events that disrupt commerce. It’s important that you purchaseinsurancefor your South Carolina business. Common policies include:
- Workers' compensation insurance. Known asworkers' comp, this insurance policy covers injuries and illnesses that employees incur on the job. Workers' comp is required in South Carolina for businesses with four or more employees.
- General liability insurance.General liability insuranceprotects businesses from liabilities resulting from third-party injuries on the job (like a customer slip-and-fall) or property damage. You're not required to buy general liability insurance under South Carolina law, but if you want to rent an office, storefront, or warehouse space, your lease may require it.
- Business interruption insurance. Business interruption insurance covers lost earning due to severe physical property damage that interrupts operations. This includes hurricanes, which are common on the South Carolina coast.
7. Understand financial considerations
Additional investments might be needed to get your South Carolina business up and running. You may want tohire professionalsor contractors, like lawyers or accountants, or pay for digital services, like social media management or a professionally designedbusiness website. If you decide to run abrick-and-mortar shopor ship items through a warehouse, you’ll need money to rent space. If all of these startup costs seem overwhelming, there arebusiness resources availableto help fund your endeavors. Consider also visiting a bank toset up a business bank accountfor handling business expenses andmanaging cash flow.
8. Market your business
Launching your South Carolina business is only half the battle. You also need tocreate a marketing strategytoget your name out.Build a brandwith carefully craftedlogos,slogans, color schemes, fonts, and marketing language, and develop that into a detailedmarketing plan. This might include:
- Paid advertising and promotion.Paid advertising is one of the more traditional, trusted methods of marketing. Ads can be print or digital, large (billboards) or small (Facebook ads). Do this yourself or hire an agency to craft ads on your behalf.
- Social media.Use social channels like Instagram, Facebook, YouTube, and TikTok topromote your products and services, and make it easier for customers to find out more about your brand.
- Public relations.Identify and reach out to local and even national media outlets to broaden your reach. Cultivate relationships with journalists and publications who can help increase your brand visibility.
- New business and customer retention.Work to build relationships with your customers tokeep them coming backand ensure they spread the word to their friends and family.
Starting a business in South Carolina FAQ
How much does it cost to register an LLC in South Carolina?
At a minimum, it costs $110 to register an LLC in South Carolina, plus a 5% corporate tax on yearly earnings and $100 to file your annual report.
Does South Carolina require a statewide business license?
There’s no general statewide business license required in South Carolina, but all of its cities and nine of its counties require local licenses. There are also industry-specific requirements, such as a sales and use tax for goods and services typically subject to sales tax, liquor licenses, food service licenses, and taxi and limousine licenses.
Do you need a license to operate a business online in South Carolina?
You only need a license if your online business is an ecommerce operation, and therefore subject to the state’s sales and use tax license requirements.