If you’re thinking of taking the leap and becoming your own boss but aren’t sure what to do next, our guide to starting a business in Nevada is here to help. This guide breaks down the process into manageable chunks, helping you turn your dream into reality without getting tangled in common pitfalls..
Steps To Start A Business In Nevada
Step 1: Choose a Business Idea
Kicking off a business in Nevada starts with a spark – your business idea. Whether you’ve got a concept in mind or you’re on the hunt for the perfect one, the first step is figuring out what kind of business you want.
Take a look at our collection of business ideas, where we break down the specifics of various industries, the costs of getting started, handy tips, and more.
Step 2: Write a Business Plan
Once you’ve settled on your business idea, it’s time to map out a plan, which makes a business plan the next step. A business plan is a must for any startup, as it helps refine your vision and walks you through each step of starting and growing your business.
The plan is also used to figure out how much money you’ll need to start and if your business idea is feasible – and if you need funding, banks and investors will pay close attention to your projected numbers.
Related: How to write a business plan
Step 3: Find the Money
Now that the idea is solid and a business plan in place, the next step is to make sure you can get the money to launch. Securing the necessary capital to start can be a difficult step, and understanding your options can help in your planning. Here are some funding sources to consider:
- Bank loans: Banks offer various types of loans to finance a small business startup. To qualify, you’ll need a strong credit history, a solid business plan, collateral, and a typically 15% and 25% personal investment.
- SBA loan guarantee: The Small Business Administration (SBA) offers loan guarantee programs, such as the 7(a) loan program, which can help you secure financing from participating lenders. These programs reduce the risk for lenders, making it easier for small businesses to obtain loans. SBA loans typically offer longer repayment terms but require more paperwork and a longer approval process.
- Microloan programs: Microloans are small, short-term loans designed to help startups and small businesses with limited credit history or collateral. In Nevada, organizations like the Nevada Microenterprise Initiative (NMI) or the State Small Business Credit Initiative (SSBCI) offer microloans to eligible businesses. These programs often provide business training and technical assistance along with the loan.
- Investors: Various types of investors may be interested in funding your business, such as angel investors, venture capitalists, or even friends and family. Investors typically provide capital in exchange for equity (ownership) in your business. To attract investors, you’ll need a compelling business plan and a strong pitch demonstrating growth and profitability potential.
Step 4: Select a Business Structure
The next step to starting a business in Nevada is selecting a business structure (also called a business entity). A business structure is basically how a business is legally organized to conduct business. New business owners need to understand the different types of business structures and choose the one that best suits their needs.
In Nevada, the four most common types of business entities are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC). A brief description of each is below.
Sole proprietorship: This is an unincorporated business owned by one individual. This type of entity offers simplicity and flexibility but also carries unlimited personal liability for all debts and obligations incurred by the business. This is suitable for low-risk businesses or individuals testing their business ideas.
General partnership: In a general partnership, two or more individuals own and manage the business together. The partners share profits, losses, and liabilities equally, and each partner is responsible for the other’s actions. This structure is relatively easy to set up, but personal liability can be a concern, just like the sole proprietorship.
Corporation: A corporation is a separate legal entity from its owners (shareholders). This structure provides personal liability protection for its owners and can issue shares to raise capital. However, corporations are more complex to establish and maintain, and they can face double taxation (taxed at the corporate level and again when profits are distributed to shareholders as dividends), but they can elect to be taxed as an S corporation, which avoids double taxation by passing income, deductions, and credits through to shareholders.
Related: How to form a Nevada corporation
Limited Liability Company (LLC): An LLC is a hybrid structure that combines the limited liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership. LLCs are flexible in terms of management and ownership, and they are relatively easy to set up and maintain.
Related: How to form an LLC in Nevada
Forming a corporation or LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular formation services include:
IncFile - Great service and free registered agent the first year.
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ZenBusiness - Easy to use and free registered agent for 1 year!
Step 5: Register the Business
After the business structure is finalized, the next phase is registering the business. It is important to research what licenses are necessary for your particular business before starting operations. By understanding what licenses are required, you can ensure that your business is operating legally in the state of Nevada.
While each business’s needs differ depending on what the business does and where it operates in the state, here are some common business registrations.
Business licenses: Every business operating in Nevada must obtain a Nevada state business license from the Nevada Secretary of State. In addition, many cities also require a business license to operate.
Business name registration: A sole proprietor or partnership operating under a trade name or fictitious business name like John Smith’s Handyman Service, Mr. Handyman, etc., will need to file a Fictitious Firm Name registration, also known as a DBA or Doing Business As with the county clerk’s office in the county where the business will be located.
Employer Identification Number: The EIN (sometimes referred to as the Federal Employer Identification Number or FEIN) is a nine-digit tax identification number issued by the Internal Revenue Service (IRS). This number identifies a business operating in the U.S. and is used for paying payroll taxes, filing tax returns, and more. Partnerships, corporations, multi-member LLCs, or any entity with employees will need to register for an Employer Identification Number. A sole proprietor with no employees can use their social security number.
Seller’s Permit: Businesses selling products and certain services will need to register for a Seller’s Permit with the Nevada Department of Taxation.
Occupational permits: Some occupations, such as contractors, child care providers, cosmetologists, and others, require licensing from the state of Nevada.
Step 6: Open a Business Bank Account
Now that the business is legally set up and registered, you are going to need a place to keep all of the profits. While you could use a personal account for business funds, keeping business and personal funds separate is important for a few reasons.
First, it helps to ensure that you are able to accurately track your business expenses and income, making it easier to file taxes at the end of the year. Second, especially for corporations and LLCs, keeping your business and personal funds separate can help protect your personal assets from any potential liabilities that may arise. Finally, distinguishing between your business and personal finances can help you watch business spending closer.
Step 7: Hire Employees
If hiring employees is a part of your plan, there are a number of actions to take.
First, a new employer will register with the Nevada Department of Employment, Training & Rehabilitation, and Internal Revenue Service.
Next, there are some laws and regulations that apply to employers in Nevada. A few things that employers need to understand include minimum wage requirements, overtime pay rules, and other labor laws.
Employers are also responsible for reporting new hires, verifying employees are eligible to work in the U.S., income tax withholding, unemployment insurance, unemployment taxes, and payroll withholding taxes, including Social Security and Medicare.
Step 8: Obtain Business Insurance
The next step is figuring out whether to purchase insurance. As a small business owner, there are a number of risks, and business insurance can help protect your business from lawsuits and financial losses.
Every business has different needs, but here are some common types of insurance policies to consider when starting your business in Nevada:
- General liability insurance: This insurance protects your business against claims related to bodily injury, property damage, and personal or advertising injury.
- Property insurance: Property insurance covers your business’s physical assets, such as buildings, equipment, furniture, and inventory, in case of damage or loss caused by fire, theft, vandalism, or natural disasters.
- Workers’ compensation insurance: In Nevada, businesses with one or more employees are required to carry workers’ compensation insurance. This policy covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses.
- Commercial auto insurance: If your business owns, leases, or uses vehicles for work purposes, commercial auto insurance provides coverage for accidents, theft, and other damages involving those vehicles.
- Professional liability insurance: Also known as errors and omissions (E&O) insurance, this policy protects businesses that provide professional services or advice against claims of negligence, errors, or omissions.
Step 9: Track Income & Expenses
Setting up a bookkeeping system should be the next step in starting a business. By keeping accurate and up-to-date financial records, you are not only better prepared to deal with taxes, but you have better insights into your company’s financial health.
There are a few ways to keep track of income and expenses. You can establish a paper filing system by assigning each type of document its own folder or binder for easy retrieval when needed. Another way to use accounting software such as QuickBooks, Wave Accounting, or Xero, which allows you to easily track income and expenses. Finally, if you don’t have the time or resources to handle the bookkeeping process in-house, consider outsourcing it to an experienced professional who can help ensure accuracy and provide valuable insights on improving your organization’s financial performance.
Related: Setting up accounting for a business
This material is property of StartingYourBusiness.com
Common questions when starting a business in Nevada
What are the steps to starting an LLC in Nevada?
How much does it cost to start an LLC in Nevada?
The cost to start an LLC in Nevada is $425 to file the Articles of Organization with the Nevada Secretary of State.
Does a sole proprietor need a business license in Nevada?
Yes, in Nevada, a sole proprietor (or any business structure) needs a business license to operate legally. Even if you’re running the business by yourself under your own name, Nevada requires most businesses to have a state business license issued by the Nevada Secretary of State.
Additionally, depending on the nature of your business and where it’s located, you may also need to obtain local licenses or permits from the city or county where your business will operate. It’s important to check both state and local requirements to make sure you have all the necessary licenses to run your business in Nevada legally.
Nevada Small Business Resources
There are 312,702 small businesses in Nevada, which is 99.2% of all businesses in the state,1 and 42.5% of Nevada employees work for a small business.2 Because of the economic impact of small businesses in the state, there are a number of small business resources to help Nevada businesses start and grow. Some of these include:
- SilverFlume: This is a portal set up by the state of Nevada where you can register your business.
- Nevada Small Business Development Center: The SBDC provides advising and workshops to new and existing businesses.
- SCORE: SCORE offers mentoring from experienced business professionals.
- StartupNV: StartupNV is an incubator that provides resources and workspaces for startups.
- Nevada Procurement Technical Assistance Center: The PTAC assists Nevada businesses to go after contract opportunities with federal, state, and local government agencies.
- Nevada Veterans Business Outreach Center: The NVVBOC supports veteran entrepreneurs with resources, guidance, and support.