With a low cost of labor and an overall low cost of living, West Virginia is an affordable and attractive place to do business. And with a little help, you can start a West Virginia business today, and be well on your way to running the company of your dreams!
Wondering how to start a business in West Virginia? This guide will walk you through the entire process from start to finish.
Decide on a business idea
First and foremost, you’ll need to decide what kind of business you want to start. Chances are you already have something in mind, but if not, here are some things to consider:
- What are you talented or naturally skilled at? Could this talent make you well suited to a certain type of business?
- What business does your community need? Have you talked to people to find out?
- What are you interested in? Can you combine any of your passions with a business idea?
- Is this going to be a full time business, or more of a side hustle?
These are questions to ask yourself when deciding on a business idea. Once you have decided, move on to the next step.
Plan your West Virginia business
Now it’s time to start planning. This means coming up with a business plan, naming your business, researching locations, and more. There’s a lot to cover here, so let’s break it down:
Select a business name
Choosing the name you want to use for your West Virginia company is the first concrete step you should take in this process. And choose carefully — you want a name that is relevant to your industry/business, and hopefully one that will be memorable for your clients and/or customers.
You can start by making a list of any names that you are considering. You likely already have some in mind. If not, brainstorm ideas based on the type of business, its location, and how you want to brand the company.
Next, you need to see if the names you are considering are actually available. You can search the West Virginia business name database to confirm this. West Virginia requires new businesses to use names that are not already in use by another WV company.
The requirement to choose a unique name is certainly important, but it’s not the only rule to consider:
- Names for LLCs need to contain “limited liability company”, or select approved abbreviations such as “LLC” or “L.L.C.”
- Names for corporations need to contain “corporation”, “incorporated”, or select approved abbreviations such as “corp” or “inc”
- The use of certain words or phrases is restricted, and the use of some financial terms requires written permission
- Check out more info on West Virginia business name rules: LLC rules here and corporation rules here
Found the name you want to use and confirmed it’s available? You can move on to the next step. Or, if you want some time to think about it, you can reserve a business name for 120 days. This prevents anyone else from registering the name.
West Virginia trade names (DBAs)
Once you have registered your business, you also have the option to register additional trade names (otherwise known as doing business as or “DBA” names). A trade name is a secondary name that you can legally do business with, providing more flexibility in branding and marketing efforts. See this page for more information.
Register a domain name
Once you choose a name, you should immediately register a domain name for your new business. In most cases, getting a .com domain name is ideal, but there are many other extensions (.biz, .net, etc.) that are worth considering.
You can use a tool like Namechk to search for an available domain name and find a great deal on the registration cost. You may find that your desired names are taken, so you may need to get creative.
Complete market research
Once you have an idea, you’ll want to do some market research. You want to gain a better understanding of who your customers – and competitors – are. You can achieve this by conducting online research, running focus groups, sending out surveys, and more. There are also companies that can help you complete market research, for a fee.
Select a business location
Unless you plan to run a remote/virtual business, you will need to find a physical location for your company. Research commercial property in your area, and take note of typical costs. For customer-facing businesses (retail and some services), location is very important, so take your time in selecting the right area for your business.
Create a business plan
You will now need to create a detailed business plan for your new venture. This plan is helpful for your own purposes, and will also be necessary in order to obtain funding from a bank. A good business plan should contain these elements:
- Finances: How much funding does the business need to get started? How many sales does it need each month to break even on expenses?
- Product: What do you plan to sell? Is it a product or a service? What problem does your business solve, and how is it distinct from your competitors?
- Marketing: How will you drive sales? What marketing and sales efforts do you plan to employ? How much money will you set aside to fund marketing efforts?
- Staff & partnerships: How many people will you need to hire, and what skill sets do they need to have? Will you have any partnerships or arrangements with other local businesses?
If you need help, you can find business plan templates online that will help walk you through the steps you need to take to draft a detailed business plan. If you plan to seek funding, you may also wish to call your bank to see what they require in terms of business plans.
Decide on a business structure
Before you form your business as a legal entity, you will need to decide which business structure you will use. There are a few different types of businesses, each with its own pros and cons.
Sole props are single-person operations. Examples include freelancers, gig economy workers, and consultants. A sole proprietorship business is very easy and inexpensive to form, and tax reporting is also fairly simple. As a sole proprietor, your business taxes are reported as part of your personal tax return.
The downsides to a sole prop are that you cannot hire employees, and you don’t have the legal liability shield that something like an LLC or corporation would provide. 100% of the debts and liability of a sole proprietorship go to the sole owner: you.
A general partnership is an unincorporated business structure similar to a sole proprietorship, except with two active owners/participants. Partnerships do not have liability protection.
Limited Liability Company (LLC)
A limited liability company, or LLC, is a popular choice for business owners because it provides liability protection to the owners. It separates the business from the owners, which means the personal assets of owners will not be at risk if the company gets sued or goes into bankruptcy.
LLCs are also a bit easier to form than corporations. Even so, there is definitely more work involved with an LLC than there is with a sole proprietorship.
A corporation is owned by its shareholders and is a separate entity. There are a few different types of corporations (C-corp, S-corp, etc), with the main differences being the way they are treated tax-wise.
Corporations are more regulated than LLCs, which makes them more attractive to outside investors. For this reason, most large companies are corporations. The downside is that it takes more effort, and more paperwork, to form a corporation.
A nonprofit is a legal entity that is set up with charitable status, meaning that its goal is not to make a profit, but rather to address a certain cause. Nonprofits are funded by donations, rather than investors, and are subject to many regulations. They are exempt from most forms of taxation, although tax returns must still be filed.
Register your business in West Virginia
Next, the time has come to formally register your new company with the state of West Virginia. This process is handled by the WV Secretary of State, either through the mail or online through the One-Stop Business Portal.
There are two ways to go about this process: Do the work yourself, or use a service. For those doing the work themselves, the section below describes how.
If you choose to use a business formation service, some good options are Northwest Registered Agent, ZenBusiness, and Incfile. These companies guide entrepreneurs through the business formation process, ensuring everything is completed efficiently and accurately.
You will pay a bit extra to use a service, but it can save a lot of time and hassle.
If you complete the steps on your own, the basic process includes:
- Naming your company
- Choosing an agent for service of process (called a registered agent in most other states). This agent is tasked with receiving legal documents on behalf of the business. You can be your own agent, appoint an employee, or use a service
- Filing paperwork with the state
- Registering for state franchise and excise taxes
- Obtaining business licenses and permits if necessary
- Applying for an EIN from the IRS
There are different specific steps for each business entity type:
Form a West Virginia sole proprietorship
Follow these steps:
- Determine if you will operate under your own legal name, or use a trade name
- If you plan to use anything other than your legal name, you will need to register a trade name/DBA
- Register with the West Virginia State Tax Department
- Apply for a business license and/or other necessary permits from local governments (city/county), as needed
- More information here
Form a West Virginia LLC
Follow these steps:
- Name your new LLC (see notes above)
- Choose an Agent for Service of Process (or use a service such as Northwest Registered Agent). Your Agent will receive legal documents and notice of lawsuits on behalf of the company.
- File the LLC Articles of Organization online or by mail, and pay the $100 filing fee
- Draft an LLC operating agreement
- Apply for an EIN with the IRS
Form a West Virginia corporation
Follow these steps:
- Decide on your desired corporate tax structure (S corp or C corp)
- Name your new corporation
- Choose an Agent for Service of Process for your business (or use a service)
- Hold an organizational meeting and appoint directors
- File the West Virginia Articles of Incorporation online or by mail, and pay the $100 filing fee
- File an initial report with the state
- Apply for an EIN from the IRS
Our picks of the best registered agent services
Apply for business licenses and permits
Registering your business and forming an LLC or corporation is an important part of starting your business – but in order to operate legally, you will likely also need to obtain certain permits and/or business licenses.
The specifics vary depending on the type of business you are running, as well as your location. For example, restaurants will need health permits, bars will need liquor licenses, and medical service providers will need various professional licenses and federal permits. You will need to research the specifics that relate to your business type.
There are different requirements at each level of government:
- Local: Cities and counties may require certain business licenses or permits. Contact your county clerk for details.
- State: West Virginia may require additional permits and/or licenses in order to operate legally in the state. See the WV License, Permits and Renewals page for more information.
- Federal: Federal permits/licenses may be required for certain regulated industries, such as construction, medicine and legal services. Check the Small Business Administration (SBA) guide for more details.
At this time, you should also apply for an Employer Identification Number (EIN). An EIN is a federal tax ID that is required to hire employees. You can apply for an EIN online with the IRS – the application is free and quick.
For most businesses, some startup funding will be necessary in order to get started. In step #2, you should have calculated your funding needs while drafting a business plan. Use this information to determine how much funding you need to raise.
For bootstrapped companies, you may be able to get by with your own personal savings, or some seed investments from friends and family. If your funding needs are small, this is likely your best route.
If your business plan indicates that substantial funding is needed, you will likely need to apply for a loan and/or a grant.
- Small business loans are offered by banks, credit unions and other lenders. They can range from as little as a few thousand to hundreds of thousands. Specifics will depend on your business, as well as your personal creditworthiness. Most small business loans are issued in a lump sum, and paid back on a monthly basis, with interest.
- Small business grants are offered by government agencies and some nonprofits. They are essentially business loans that don’t need to be paid back – but they usually have substantial fine print. It’s worth looking into, however, as there may be grants available, particularly for businesses serving an important social need, or for underprivileged entrepreneurs starting their first business.
Set up your business finances
Beyond securing funding, there are other routine tasks that you need to take care of to get your business’ finances in order. This includes:
- Opening a business checking account. You should have a separate business bank account that you use solely for business purposes. You can open this account at most banks, credit unions and financial institutions. Call ahead to see what documents will be required to open this account.
- Open a business credit card or line of credit. This is not strictly necessary, but most businesses can benefit from having a business credit card, and/or a business line of credit. This can be used for day-to-day expenses and purchases, and may also earn you some rewards.
- Set up your accounting system. As a business owner, you will need to keep very detailed records about all revenue and expenses. To do this, you’ll want to set up the proper foundation from day one. This could be investing in an account software such as QuickBooks or Xero, hiring a bookkeeper, or at the very least establishing a spreadsheet to track everything. If you do not have any accounting experience, it’s wise to hire a professional to help.
- Purchase business insurance. Most businesses should have some form of liability insurance, and potentially other forms of business insurance as well. Insurance policies can help protect your equipment and buildings from costly damage, and help shield your company from liability if a worker or customer is injured or otherwise harmed. Speak with a local business insurance provider to get started.
Create a business website
In this day and age, having a solid web presence for your business is very important. And social media profiles, while important, are no replacement for an actual website. You will want to build a professional business website that you can use to drum up business, inform your customers, and stay connected with your clientele.
The simplest way to build a website is to use a website builder from a web hosting provider. When you register a new domain name, look for a provider that also offers web hosting and a site builder, so that you can purchase everything at once and get your site set up quickly.
Our picks of the best website builders
Building a strong team of employees is essential to the success of your business. Unless you plan to operate a solo business (with you as the only worker), you will likely need to hire some employees to make your business dreams a reality.
Before you hire anyone, the IRS requires that you obtain an Employer Identification Number (EIN). You can apply for an EIN online in just a few minutes (and it is free to apply). You’ll also need to apply for federal employer tax accounts.
West Virginia has their own requirements for employers, as well. You are required to report new hires to the state within 14 days of the hire date. This can be done online or using this paper form.
Employers also need to register for WV employer taxes, including WV withholding tax and unemployment insurance tax.
Finally, you will need to set up a payroll system or use a payroll service, to ensure that
Run and grow your business
Now it’s time to get down to business and engage with the day-to-day activities that are sure to bring your business success. This means marketing your products and services, maintaining good relationships with your return customers, and setting yourself apart from the competition.
West Virginia business FAQs
Still have questions about running a business in West Virginia? Here are some answers to frequently asked questions.
What are some business resources in West Virginia?
There are many useful resources available to WV entrepreneurs. The West Virginia Small Business Development Center (SBDC). The WV SBDC offers a variety of free and low-cost resources to business owners, including no-cost business coaching and consulting, and more. The SBDC also maintains a list of other useful resources in the state. Business owners can also check with the West Virginia District Office of the US Small Business Administration (SBA).
What is the minimum wage in West Virginia?
The West Virginia minimum wage is $8.75 per hour for most businesses. Small firms with fewer than 6 employees may pay the lower federal minimum wage ($7.25 per hour), but any business with 6 or more employees will be subject to the WV minimum wage of $8.75 per hour.
There are some exceptions to the rule, such as for employees who earn tips. See the WV minimum wage fact sheets for more information.
Keep in mind that it is possible for cities or counties to establish their own minimum wage laws, which may exceed the West Virginia minimum wage. Check with city/county officials to ensure that you are complying with all applicable labor laws in your area.
What business taxes does West Virginia have?
Any business selling taxable goods or services in West Virginia will be subject to the West Virginia sales and use tax (which varies by jurisdiction).
Companies with employees must register for and pay WV employer taxes, including WV withholding tax and unemployment insurance tax. And most businesses will be subject to corporate income tax.
There may be other tax requirements depending on your business activities and industry. See the West Virginia State Tax Department website for details.
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