With abundant sunshine, beautiful beaches, and a variety of available activities, it’s easy to see why people flock to Florida to live, work, and play. If you’re thinking about opening a small business in the Sunshine State, you have several important considerations to understand. Learn more about the small business environment in Florida and the steps you need to take to start a business in the state.
Small Business Climate in Florida
Small businesses are growing in Florida. In fact, the 2.5 million small businesses in Florida account for 99.8 percent of the total businesses in the state. Additionally, small businesses employ 3.3 million people in the state of Florida, accounting for 42.2 percent of employees in the state. As these numbers show, small businesses are plentiful in Florida.
Who Owns Small Businesses in Florida?
People from a variety of different backgrounds are opening small businesses in Florida. In the state, 14.1 percent of men and 8.6 percent of women account for self-employed workers. Additionally, 9.4 percent of minorities are self-employed. Finally, 12.8 percent of veterans are self-employed, which shows that they’re finding the funding options they need to open their small business.
Advantages of Starting a Small Business in Florida
Florida offers some unique advantages for those interested in opening a small business in the state. WalletHub says Florida is the sixth-best state in the United States to start a business. CNBC lists Miami-Fort Lauderdale as the third-best city in the country to have a small business in 2018. Plus, at $854,540, Miami trails only New York City in annual revenues for businesses. If you know you’ll need employees for your business, consider opening in Hialeah, which has the third-lowest labor costs in the country.
Small Businesses in Different Industries
A record 116.5 million people visited Florida in 2017. With such a large number of visitors going to the state, it’s no surprise that a good number of small businesses are geared toward travelers. In fact, in the accommodations and food services industry, 51.7 percent of businesses are small businesses. Additionally, the retail industry has 29.6 percent of small businesses, and the percentage of businesses in the arts, entertainment, and recreation industry that are small businesses is 50.4 percent.
However, while Florida is a popular destination for visitors, it also has a growing population of full-time residents. As of July 2017, Florida’s population was at 20.9 million. That’s an increase of just over 2 million people between 2016 and 2017, which equals a growth rate of 11.6 percent. Plus, nine of the 25 fastest growing cities in the United States in 2017 were in Florida.
This growth in population means small businesses catering to residents are also prevalent. For example, 88.2 percent of the businesses in the construction industry are small businesses. Additionally, 66.9 percent of businesses in the professional services industry are classified as small businesses, and 60.7 percent of the real estate industry is in small business.
Opening a Small Business in Florida
After you read these statistics, you might decide that opening a small business in Florida is the right step for you. However, in order to be successful, you need to have a business plan, file the proper documents with the state and federal governments, and make sure you know the laws for business owners in Florida.
Creating a Business Plan
The very first step on your path to opening a small business in Florida should be to create a business plan. Not only will your business plan give you a basic guide to follow to help your business see success, but it’s also something that many investors and banks will require before approving funding for your business. When you’re creating your business plan, make sure you include these key components:
- Executive summary
- Company description
- Market analysis
- Organization and management
- Service or product line
- Marketing and sales
- Funding request
- Financial Projections
Getting the Proper Licenses and Permits
Once you have your business plan complete and have acquired the funding required to open your Florida small business, you need to make sure you have all the proper licenses and permits in place. The type and cost of permit or license you need depends on the kind of services you’re offering and the location of your business. However, it’s very important to make sure you have everything necessary, or the state could fine you or close your business. Additionally, city or county governments sometimes require additional licenses and permits.
Collecting and Paying Taxes
Once you start doing business in Florida, you want to make sure you keep up with paying your taxes. In Florida, you’ll be required to pay three different types of taxes. Sales and use tax is a percentage rate charged on taxable items. Unemployment tax is collected from payroll and used to help people who have lost their jobs and are currently looking for new employment. Lastly, a corporate income tax is charged on the profits your business makes.
Marketing Your Business
Another important consideration to give your business is how to market it. While it would be nice to think you can immediately open your doors and have customers pouring inside, it usually doesn’t work that way. Instead, you need to come up with a plan to get your business name out there. Today, many small businesses are turning to the power of social media to market and advertise their business. Not only does social media let them reach customers in their own city in Florida, but it also gives them the opportunity to reach potential customers around the country.
Once you have customers arriving, consider creating a customer retention strategy to help bring them back. A few popular types of strategies include a frequent shopper program, hosting a special event, and creating a customer relationship management system that lets you track buying habits and create personalized messages for each customer.
When you’re ready to open your small business in Florida, make sure you have the tools and information necessary to help your business become successful.