A Beginner’s Guide to Starting a Business in Oregon
Starting a business in Oregon allows you to pursue your passions, create wealth, and address local problems. Oregon’s strategic location next to bustling economies like Washington and California makes it a destination for emerging enterprises.
Agriculture, tourism, and technology contribute to the state’s diverse economic landscape. The skilled workforce in cities like Beaverton offers fertile ground for budding ventures.
Unsurprisingly, Oregon produces 99% of the U.S. hazelnut, a commercial crop that contributes to the state’s GDP of $299.1 trillion.
Ranked as the 17th wealthiest state in the U.S., its current unemployment rate of 4.1% is lower than the long-term average of 6.8%, suggesting a thriving business environment that presents opportunities beyond traditional sectors.
Here’s how you can leverage this booming economic landscape to start your business in Oregon.
1. Create a Business Plan
Running a successful business can be fraught with many challenges and complex processes.
You need a well-structured business plan when starting a small business in Oregon. It can address these challenges by preparing you and providing a ground plan to guide your business.
A business plan should include sections on its concept, market analysis, operational plan, and financial projections. Moreover, it should outline your business’s objectives and long-term goals.
It should also:
- Have an executive summary
- Include a business/company description
- State what portfolio of services or products you will offer
- Define your target market
- Map out customer demographics
- Have details on operational costs
- List funding sources
- Carry analysis of market size in Beaverton
- Identify main competitors and their market share
2. Choose a Business Name
Choosing the right name is an important part of how to start a business. It conveys your brand identity and significantly influences how potential customers perceive or receive your business.
Your business name should be unique and adequately represent the kind of service or products you offer.
Before you settle on a business name, conduct a simple business name search on the Oregon Secretary of State website to make sure the name you choose is available to register as a business entity in Oregon.
Other considerations for your business name choice include:
● Clarity
The business name should be easy to pronounce and remember. It should also translate well into the online world, making it easier to choose a domain name.
● Representation of your brand
Avoid ambiguous names. Your name choice should reflect the products or services you offer. For instance, a name with the word ‘Nutri’ in it will be inappropriate for a home decor product.
● Expansion
While your business name should be suitable for your current business offering, it should not be rigidly specific to exclude future expansion into other industries.
● Legal Considerations
Beyond Beaverton and the state of Oregon, your name choice may already exist. Conduct a general search to avoid future lawsuits from trademarks with similar names that you may be infringing on their rights.
If a name is available but you are not ready to register with the state, you can file a “company name reservation” application in Oregon. The application takes between 1-2 weeks to process and reserves the name for 120 days.
3. Choose a Legal Structure
Choosing the right legal structure for your business is important as they carry different benefits and can influence various aspects of its operations.
These legal structures are of different types and can determine the flexibility of the management and even tax implications.
● Sole proprietorships
Sole proprietorships do not confer limited liability to the owner of the business. You bear unlimited liability for any debt or legal issues that may arise and report profits and losses on your tax returns.
● Partnerships
Partnerships facilitate shared ownership and management and are particularly valuable when two entities collaborate.
Particularly, this structure spreads liability and is a prevalent structure in Oregon, where the involvement of moving companies, Beaverton is crucial for easy movement of assets.
Here, profits and losses directly impact the owners, who report them on their tax returns.
● Limited Liability Companies (LLCs)
Limited liability companies (LLCs) provide personal protection for their owners, known as members.
Registering your business as a legal entity offers protection from being liable for lawsuits against your business (limited liability protection). They have flexible taxability either as sole proprietors or as corporations.
● Corporations
Corporations have a more complex structure and robust liability. Taxing is separate from their owners. Although Oregon does not have a state sales tax, corporations face corporate income tax on profits while shareholders pay taxes on dividends.
4. Registering Your Business
After choosing your legal structure, the next step is to register your business. It establishes its recognition as a legal entity.
The Oregon Secretary of State handles all registration processes, and you can choose to file a registration online, in person, or by mail.
Moreover, the address and contact of the registering agent must be in Oregon. Sole proprietorship businesses also do not need to register unless they are using an assumed business name.
Depending on your chosen legal structure, you may need to file articles of incorporation. Other documents the Oregon business registry requires may include articles of dissolution, entity mergers, and other similar registration documents.
5. Meeting Licensing Requirements and Obtaining Permits
Oregon does not have a general business license. Obtaining one depends on your business activity and location. For instance, in Beaverton, every business within the city pays a business license fee unless exempted by state or federal statutes.
The business license fee expires on December 31st, with some modifications for businesses that obtain their license after June 30th. You can apply for the business license online or mail it with the filled-out form and payment check.
Businesses such as insurance, utility, and real estate are not required to obtain a license in Beaverton. These licenses are not transferable when you sell the business, and they do not permit it to operate outside the dictates of federal, state, regional, and local laws.
6. Explore Funding Options
The financial costs needed for your business to be operational, including fees for your small business legal requirements, can be high.
In addition to the cost of equipment, marketing, and ongoing expenses, you may need to explore various funding options. It helps to have a financial plan that demonstrates your business’s viability and helps attract investors or lenders.
- Angel Investors provide seed capital in exchange for equity in your business.
- Business loans offer funds with agreed-upon repayment terms and interest rates from financial institutions.
- Personal savings involve using one’s own money (bootstrapping) saved over time to finance a business venture. It allows you full control and ownership over funds and business.
- Oregon Small Business Development Centers (SBDC) provide tailored guidance on how to secure funding when you are starting a business in the state. These centers have access to lenders looking for qualified businesses.
7. Open a Dedicated Business Bank Account
Separating your personal finances from your business proceeds is essential in maintaining your liability protection.
Opening a business account can help you achieve this. It requires you to file for an Employer Identification Number (EIN), a 9-digit number issued by the IRS. The EIN is what identifies your business for taxes.
Bottom Line—Becoming A Founder
The processes involved can seem overwhelming when you are new to starting a business in Oregon.
But if done properly, it can be a rewarding endeavor. By following these guides, you can avoid some pitfalls that many small businesses fall into and be well on your way to business success.
Also, an extra tip for you would be this: do not hesitate to seek professional guidance as needed.
