Maryland is home to some of America’s largest companies, including Marriott International and Lockheed Martin. These two companies alone employ over a quarter of a million people. However, a bustling small business scene also contributes significantly to Maryland’s economy.
If you’re looking to start a business in Maryland, here are six steps you need to take:
Create a business plan
A business without a plan is destined to fail. You need:
- A clear idea of how your business will operate;
- Specific goals and timelines to reach them;
- To know what new your product/service brings to the market;
- To know who the main competitors are.
All of these questions, and more, should be answered in your business plan. If you have trouble working on a business plan by yourself, hire an agency to ensure your business gets off on the right foot.
Register your business
After you have a clear idea of what you want to do, it’s time to implement the plan. The first step is to register your business. You can do so with the help of the Maryland Business Express portal.
One thing you need to figure out at this stage is whether to register as a:
- Sole proprietorship – easy to set up but risky as it uses your personal assets as a liability.
- Partnership – Share the liability with one or more partners. The most popular partnership type is an LLP – which protects the partners from each other’s debts.
- Limited Liability Company (LLC) – Separate your personal assets and liabilities from your business ones. To start an LLC, you must file a Certificate of Formation with Maryland’s DAT. An LLC also comes with more taxes.
- Corporation – Complicated to start and comes with double taxation. Not suitable for the vast majority of new businesses.
Figure out if you need any special permits or licenses
Depending on the type of business you’re starting, you may need additional permits and licenses. The Maryland Department of Labor is the best source to check if you need any extra permits.
For example, if you’re opening a restaurant, you’ll need a food license. You’ll need an additional permit if you plan to serve alcohol at your restaurant. Not having the necessary permits for your business can result in hefty fines or in shutting down.
Register for a Federal Employer Identification Number (EIN)
Once you’ve registered your business and acquired all necessary permits, it’s almost time to open. However, before you can start hiring, you need an Employer Identification Number or EIN.
Getting your EIN is easy. You can do it online, and it’s free.
Abide by cybersecurity best standards
One thing many small businesses overlook is the importance of data security. As a business in 2022, using technology is unavoidable, which also means that handling sensitive data online is unavoidable. Mishandling consumer data, in particular, can be dangerous.
Maryland protects consumer data with the Personal Information Protection Act (PIPA). The Act requires organizations to notify customers whose data has been compromised. You should also be on the lookout for any other legislature regarding cybersecurity compliance.
Here are several ways you can quickly boost your cyber posture in the early stages of your business:
- Use strong passwords and two-factor authentication.
- Use a VPN to encrypt data traffic (since this tool costs money, you can start out with a VPN free trial).
- Train employees on cybersecurity best practices.
- Create backups for critical data.
Get business insurance
Business insurance protects you from worst-case scenarios like natural disasters or lawsuits. Cyber insurance is also becoming popular and should be considered, especially if you handle large amounts of sensitive data.
It’s understandable if you think insurance is just an unnecessary cost in the early stages of starting a business. However, it is absolutely necessary if you want to prevent horrible financial consequences. Having insurance can be the difference between closing down and recovering from an unexpected event.
Maryland is a great place to start a business. A few large players support the state’s booming economy, but there’s also a large contribution from small and medium-sized businesses.
To start a business in Maryland, you have to follow the typical protocols you would encounter anywhere. Legally, you must register the business and establish the business structure. You then need to acquire all the necessary permits and licenses specific to your business. But once all the paperwork is done, you’ll be free to grow your business to reach the top of the industry.