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How To Start A Business In Oregon

How To Start A Business In Oregon

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How To Start A Business In Oregon

How To Start A Business In Oregon

The thought of becoming your own boss is exciting, but knowing where to begin is often the hardest part. That’s why we’ve put together a straightforward guide to help you navigate the first steps of starting a business in Oregon.

By tackling the steps in our guide, you’ll be setting yourself up for a better chance at success and dodging the common mistakes that trip up many new business owners.

Steps To Start A Business In Oregon

Step 1: Choose a Business Idea

The first step in starting a business is, unsurprisingly, knowing what type of business to start.

If you are looking for inspiration, I recommend looking for a business that’s not only likely to make money but also something you’re interested in. If you pick a business that matches your own interests and strengths, you’re more likely to do well. Think about what you’re good at or what you know a lot about.

You also need to do some homework on who will buy your product or service. Ask yourself: Who are my customers? What do they need right now? This helps you make sure there’s a real demand for what you’re planning to sell.

If you’re still unsure of what business to start, don’t worry. We’ve got a lot of information on different types of businesses in our business idea library, including overviews, how much it might cost to get started, and helpful tips.

Step 2: Write a Business Plan

Once a solid business idea is in place, it’s time to start working on the business plan. There is a lot of work to do a business plan right, and because of that, many people only consider writing a business plan because the bank asks for one in order to get funding. While that’s a valid reason, writing a business plan does a great job of getting the ideas out of the entrepreneur’s head and helps to refine them. The plan is also useful as it creates a roadmap to take their idea into a new business. While a great plan doesn’t guarantee success, not having one will likely result in costly mistakes that could have been avoided.

Related: How to write a business plan

Step 3: Find the Money

Once the idea is sorted out and the costs to start the business have been calculated in the business plan, the next step is to make sure you have the money needed to launch. Funding options for small businesses vary depending on factors like creditworthiness, income stability, collateral, and the amount of money needed. The most common sources include:

  • Personal savings remain a primary source many startups use, particularly during the early stages. A potential disadvantage arises when owners utilize their entire life savings or retirement nest eggs; there might not be any backup resources left over if things go awry.
  • Friends and family members who believe in you and your vision are another option. Since these funds are often interest-free or at low rates with lenient repayment terms, they offer greater flexibility compared to traditional lenders. On the downside, informal arrangements involving close connections increase the likelihood of misunderstandings, hurt feelings, or lost relationships should disputes arise.
  • Conventional bank loans from banks and credit unions are a common source of funding for small businesses. These loans typically have lower interest rates than alternative lending options but will require a personal investment, collateral, and a strong credit history.
  • The U.S. Small Business Administration (SBA) offers loan guarantee programs designed to help small businesses access capital. The SBA does not provide loans directly to a small business, but it guarantees a portion of the loan made by participating lenders, reducing the risk for lenders and making it easier for small businesses to qualify.
  • Microloans are small loans, typically up to $50,000, designed to help start-ups and small businesses with limited credit history or collateral. In Oregon, organizations such as the Oregon Association of Microenterprise Networks (OAMN) and Mercy Corps Northwest offer microloan programs and technical assistance to support small business growth. These loans often come with more flexible terms and requirements compared to conventional bank loans, but they may have higher interest rates.
  • Last, there are various types of investors that may be interested in funding your business, including angel investors, venture capitalists, and equity crowdfunding. Angel investors are high-net-worth individuals who invest in start-ups in exchange for equity or debt, while venture capitalists are firms that invest in high-growth, high-potential businesses. Equity crowdfunding platforms allow businesses to raise capital by selling small equity stakes to a large number of investors. Each investment type has pros and cons, and choosing the right investment source that aligns with your business’s goals and needs is crucial.

Related: Understanding the different types of business funding

Step 4: Select a Business Structure

The next step to starting a business in Oregon is selecting a business structure, also referred to as a business entity. A business structure is how a company is legally organized to operate. The most common types of business structures in Oregon are sole proprietorships, general partnerships, corporations, and Limited Liability Companies (LLCs).

sole proprietorship is an unincorporated business owned and run by one person, and it’s the simplest and most common form of business entity. The owner has complete control over the business, receives all profits, and is responsible for all debts and liabilities. Pros include ease of formation, minimal paperwork, and simple tax filing. Cons involve unlimited personal liability, which means your personal assets may be at risk, and potential difficulties raising capital.

Related: How to start a sole proprietorship in Oregon

general partnership is a business owned by two or more people. In this structure, two or more individuals own and operate the business together. Each partner shares in the profits, losses, and management responsibilities, and they are all personally liable for the business’s debts and obligations. Pros include ease of formation, shared management, and relatively simple tax filing. Cons include unlimited personal liability for each partner, potential conflicts in decision-making, and challenges in raising capital.

corporation is a separate legal entity from its owners (shareholders), which means the owners are not personally liable for the business’s debts and obligations. There are two main types of corporations: C corporation and S corporation, and the primary difference lies in the tax treatment. Pros include limited liability for shareholders, easier access to capital through stock issuance, and greater credibility with customers and suppliers. Cons involve more complex formation, extensive record-keeping, and potential double taxation (in the case of C corporations).

Related: How to form an Oregon corporation

Limited Liability Company is a hybrid business entity that combines the features of a corporation and a sole proprietorship or partnership. It offers personal liability protection for the owners and the ability to choose how the business is taxed. Pros include limited liability, tax flexibility (LLCs can choose to be taxed as a sole proprietorship, partnership, or corporation), and fewer formalities compared to corporations. Cons involve more complex formation than sole proprietorships or general partnerships.

Related: How to form an LLC in Oregon

When choosing a business structure, it’s important to consider your personal liability, taxes, and management structure. Each business entity has its unique pros and cons, and it’s important to weigh these factors carefully before making a decision. For example, sole proprietorships and partnerships are easy and inexpensive to set up, but they offer little liability protection for the owners. Corporations and LLCs offer greater liability protection but are more complex and expensive to establish. By understanding the unique features of each business entity, you can choose the one best suited for your specific needs and goals.

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.

Northwest - Privacy-Focused: Free registered agent and private business address for 1 year!

ZenBusiness - Easy to use and free registered agent for 1 year!

Step 5: Register the Business

Now that the business structure is in place, it’s time to get it registered. There are several federal, state, and local rules and registrations for Oregon businesses, and each business will have different needs based on where they are located and what they do. Some common registrations include:

Oregon Business Registry The state of Oregon doesn’t have a general business license. However, corporations, Limited Liability Companies, and sole proprietors or general partnerships operating under an Assumed Name must sign up for the Oregon Business Registry through the Oregon Secretary of State website.

Business licenses: While there isn’t a state business license, many cities or counties in Oregon require businesses to obtain local licenses or permits. These requirements vary depending on your business’s location and type.

Employer Identification Number (EIN): The Internal Revenue Service (IRS) issues an EIN to identify business entities operating exclusively in Oregon for payroll taxes, filings, and other related tax matters. Partnerships, corporations, and most LLCs OR sole proprietorships with employees must register for an EIN.

Business name registration: Sole proprietorships or partnerships operating under a fictitious business name or DBA (Doing Business As) will need to register for an Assumed Name, commonly known as a DBA or Doing Business As, with the Secretary of State’s office.

Business Identification Number: A business with employees in Oregon needs to obtain a Business Identification Number from the Oregon Department of Revenue.

Occupational licenses: Numerous professions require state-issued occupational licenses. Examples range from healthcare professionals, plumbers, electricians, contractors, cosmetologists, and accountants, among others.

Related: What business licenses and permits are needed in Oregon?

Step 6: Open a Business Bank Account

Opening a separate bank account for your business is the next step once you’ve decided on its structure and registered the business. This dedicated account helps you manage your business’s finances by keeping your business transactions separate from your personal ones, making it much simpler to track your income and expenses.

To open a business bank account in Oregon, you’ll typically need the following documents:

  • Employer Identification Number (EIN) or Social Security Number (for sole proprietors)
  • Business formation documents (such as Articles of Incorporation or Articles of Organization)
  • Ownership agreements (if applicable)
  • Business license or permits (if required)
  • Personal identification (such as a driver’s license or passport) for all account signatories

Step 7: Hire Employees

If you plan to hire employees as a new employer, you will need to register with the Oregon Department of Revenue, Oregon Employment Department, and Oregon Department of Justice. In addition, most employers will also be required to carry workers’ compensation insurance.

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.

Related: Steps to hiring your first employee in Oregon

Step 8: Obtain Business Insurance

Another important step when starting a small business is to consider the risks and unexpected events that can occur while running your business. That’s where insurance comes in. Investing in the right types of insurance policies protects your business and assets from potential legal and financial issues.

Each type of business faces different risks, but a common example is if a customer slips and falls in your store, you could face a lawsuit that could bankrupt your business. With insurance coverage, you can rest assured that you’re covered for legal expenses and potential damages.

Related: Types of insurance your business may need

Step 9: Track Income and Expenses

Setting up a good bookkeeping system for your business is important to ensure long-term success. Bookkeeping is the process of recording, organizing, and maintaining financial transactions, which is used to track your business’s financial health, ensure tax compliance, and make informed business decisions.

Related: Setting up accounting for a business

This material is property of StartingYourBusiness.com

Common questions when starting a business in Oregon

What are the steps to starting an LLC in Oregon?

There are three main steps to starting an LLC in Oregon. These include:

1. Making sure the LLC name is available
2. Appointing an Oregon Registered Agent
3. Filing the Articles of Organization

Here are more details about starting an LLC in Oregon.

How much does it cost to start an LLC in Oregon?

The cost to start an LLC in Oregon is $100, which is the Oregon Secretary of State’s filing fee to submit the Articles of Organization with the

Does a sole proprietor need a business license in Oregon?

Yes, as a sole proprietor in Oregon, you may need a business license, but it depends on the type of business you’re running and where it’s located, not the type of business structure.

In Oregon, business licensing is often managed at the city or county level, so the requirements can vary. For example, if you’re opening a restaurant, you’ll need different licenses than if you’re starting a consulting business.

It’s important to check with your local city or county government to find out exactly what licenses or permits you need. Some types of businesses also require state licenses, especially those that are regulated industries like healthcare, construction, or food services.

Oregon Small Business Resources

There are 397,422 small businesses in Oregon, which is 99.4% of all businesses in the state,1 and 54.1% of Oregon employees work for small businesses.2 Because of the economic impact of small businesses, there are a number of small business resources to help Oregon businesses start and grow. Some of these include:

  • Business Diversity Institute: This organization focuses on enhancing the growth and success of minority-owned and woman-owned businesses in the region.
  • Business Oregon: As the state’s economic development agency, Business Oregon provides financing and assistance to businesses.
  • Government Contracting Assistance Program: GCAP helps businesses navigate the complexities of federal, state, and local procurement processes.
  • Oregon Minority Business Development Agency: OAME helps minority-owned businesses increase their revenue and secure government, state, and local contracts.
  • Oregon Small Business Development Center: The SBDC offers a range of services to support small businesses in Oregon.
  • Oregon Startup Center: With a mission to train, mentor, invest in, and support the growth of Oregon startups, the Oregon Startup Center works closely with local communities, angel investors, service providers, and economic development officials.


  1. Small Business Administration ↩︎
  2. Census Bureau ↩︎


  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

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How To Start A Business In Oregon

How To Start A Business In Oregon

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