Starting a Business in New Hampshire

Starting a business is exciting. Besides allowing you to be your own boss, it can also increase your earning potential and bring you a greater sense of achievement. However, it may also come with more responsibilities, challenges and risks. One of the most challenging aspects of going into business is getting started. Other than the extensive planning, calculation and setting up you need to do, you also have to fulfill a lot of legal requirements to make your business official. Here is a comprehensive guide on how to start a business in New Hampshire.

Write a Business Plan

The first thing you need to do is write a business plan. Regardless of size, every business has to create a business plan before going forward. A business plan will set the tone for your company and keep it going in the right direction towards its goals. A comprehensive business plan should include information about every major aspect of your business, including:

Executive Summary

This section should appear right after the title page. The purpose of the executive summary is to show what you wish to achieve with your business. List the short and long-term goals of your company.

Business Description

Begin with a short overview of your company and industry, including the products or services you will be offering. Then, discuss the current and future outlook of the industry, the different types of markets within the industry and new products and developments that may benefit or hurt your business.

Marketing Plan

The marketing section of your business plan should include information about your target consumers, such as their demographics, preferences and buying habits. You also need to discuss the marketing channels and techniques you plan to use to reach out to your potential customers.

Competitive Analysis

In this section, you need to determine your competitors’ strengths and weaknesses, as well as strategies that will give you a competitive advantage.

Operations and Management Plan

The purpose of the operations and management plan is to show how your company will function on an ongoing basis. It should include information such as the duties of the management team, the responsibilities of each division of the company and the capital and expenses required to keep your business running.

Financial Plan

In your financial plan, you should discuss how you will get funding for your business, how the funds will be used and how much revenue and profit you expect to make.

Choose a Legal Structure

Before you start a business, you have to decide which legal structure to adopt. There are several different business structures for you to choose from, including sole proprietorship, partnership, limited liability company, corporation and others. Weighing their pros and cons can help you make a better-informed decision.

Sole Proprietorship

Pros

  • Low initial set-up costs
  • Low working capital requirements
  • Complete control by owner
  • All profits go to owner
  • Tax advantage for owner

Cons

  • Unlimited personal liability
  • Harder to raise capital
  • Lack of continuity

Partnership

Pros

  • Low initial set-up costs
  • Easy to form
  • More sources of venture capital
  • Limited outside regulation
  • Broader management

Cons

  • Difficult to find the right partners
  • Hard to raise additional capital
  • Unlimited personal liability
  • Divided authority
  • Lack of continuity

Limited Liability Company

Pros

  • Easier to raise additional capital
  • Flexible ownership and management structure
  • Limited liability
  • Legal entity
  • Continuous existence

Cons

  • More difficult and expensive to organize
  • More regulations

Corporation

Pros

  • Easy to raise capital
  • Limited liability
  • Legal entity
  • Specialized management
  • Transferable ownership
  • Continuous existence
  • Unity of action due to centralized authority

Cons

  • Closely regulated
  • Extensive recordkeeping
  • Double taxation
  • Charter restrictions
  • Hard to liquidate investment

Select and Register Your Company’s Name

Choosing a company name can be more difficult than it seems, but it is nonetheless an important part of starting a business. The name of your company is one of the first things people notice about your business. If it is easy to remember and leaves a lasting impression, it can make your business stand out and help you attract more customers. It is important to select a name that will reflect the nature, characteristics and values of your company.

After creating a name for your business, you have to find out if it is already taken or still available. You can do this by conducting a search at the New Hampshire Department of State’s NH Quickstart website. Once you have determined that your preferred name is available, you can register it at the site or in person at the office of the Secretary of State in Concord, NH. If you plan to do business under your own name, you are not required to register the name, but it is recommended that you do so anyway.

Register Your Business

Regardless of business structure, all businesses in New Hampshire are required to file with the Secretary of State’s Office. The filing requirements can vary significantly from one legal structure to another. If you are opening a sole proprietorship or partnership, the requirements are minimal. For a limited liability company or corporation, you must meet the following requirements.

Limited Liability Company

To form a limited liability company in New Hampshire, you are required to file articles of organization or the Certificate of Formation with the Department of State and pay a filing fee of $100. Information you need to provide includes:

  • Business name, ending with “limited liability company”, “LLC” or another variation
  • Duration of the limited liability company
  • Specific purpose of the company
  • The name and physical address of the registered agent
  • Number of managers in the company
  • A statement agreeing that ownership interests will be sold or offered for sale in a way that complies with the New Hampshire Uniform Securities Act
  • Signature of a member or manager

Corporation

If you are forming a corporation, you must file the articles of corporation and pay a fee of $100. Required information includes:

  • Business name, ending with “corporation”, “incorporated”, “Inc.” or another variation
  • Purpose of corporation is optional
  • Number of shares you wish to authorize
  • Name of registered agent
  • Name, address and signature of the incorporator
  • A statement agreeing that ownership interests will be sold or offered for sale in a way that complies with the New Hampshire Uniform Securities Act

Obtain an Employer Identification Number (EIN)

After forming your business, you are required to obtain an EIN from the IRS. Also known as Federal Tax Identification Number, an EIN is a number that the IRS uses to identify a business. It is essentially the Social Security number of your company. You need to have an EIN in order to file federal and state taxes. Also, this number is a requirement for opening a business checking account in some banks. You can apply for an EIN either at the IRS website or via postal mail.

Register Your Company for State Taxes

If you are planning to hire employees in New Hampshire, you are required to register with the state’s Department of Revenue. Since New Hampshire is one of the five states in the U.S. that do not impose sales tax, there is no need to register for sales tax.

Obtain the Necessary Licenses and Permits

Many businesses do not need to apply for a license or permit. In New Hampshire, you are required to obtain a license or permit if you are operating any of the following establishments:

  • Restaurant
  • Bakery
  • Grocery store
  • Lodging establishment
  • Motor vehicle rental business
  • Business that sells tobacco products
  • Retailer of communications services

If your business requires a license, you can apply for it at the state’s licensing board. It is also important to note that certain counties or cities in New Hampshire have a general license. For information about local licenses and permits, you can contact your County or City Clerk’s Office.

In addition, if your business activities are subject to the regulations of the state or local government, you may have to obtain a specific operator’s license or permit. A regulated business may be subject to certification, accreditation or routine inspections. Examples of businesses that require permits include architecture firms, accounting firms, restaurants, childcare facilities, chiropractic clinics and others.

Open a Business Bank Account

To keep your finances organized, you have to avoid meshing your business and personal finances. The best way to do this is to open a dedicated business bank account. It can be difficult to choose the right business bank account, considering that there are so many options available. Shop around and compare the features of different national and local banks’ business accounts. Generally, a national bank with excellent online facilities will offer better features and rewards. With advanced online capabilities, such a bank will enable you to perform transactions and other financial activities more easily, efficiently and securely.

Secure Funding

New Hampshire is a great place to start a business because of its healthy venture capital and angel investor networks. Due to its tech-savvy population, it also offers many online lending options, including peer-to-peer online lending, social lending and crowdfunding. There is also a wide range of state and local lending programs available. If you prefer conventional lending, you have numerous banks, financial institutions and credit unions to choose from.

It is essential that you spend some time researching and weighing your options first before you choose a funding source. Compare the interest rates, repayment terms, maximum loan amounts, fees and eligibility requirements of different funding options to determine which one best suits your needs. Finding the right source of funding can have a significant impact on your company’s ability to meet its financial obligations.

Pick the Right Location

One good thing about starting a business in New Hampshire is that you have many great locations to choose from. The state has 10 counties, more than 200 towns and cities and 25 unincorporated places. Whether you wish to open your business in an urban or rural area, you should have no trouble finding a location that suits your needs and purposes.

However, there are certain things that you need to take into consideration when picking a location, including market conditions, competitive landscape, business infrastructure, operational costs and the availability of business support. Determining the right location requires a lot of research and evaluation, but it is an essential step that cannot be overlooked.

Market Your Business

Marketing is one of the most important aspects of your company. It will improve the visibility of your business and help you attract more customers. Depending on your target audience and your budget, you can either invest in local advertising or online marketing.

Since New Hampshire has a modern population, it is a good idea to market your business over the internet. Besides being cost-effective and versatile, online marketing also allows you to reach out to a larger pool of potential customers. You can promote your business online by setting up a website or blog, creating a strong social media presence, listing your company in business directories and joining forums. While online marketing is comparatively more affordable, you need to constantly invest time and effort to make it work.

If your business is located in a rural place with a less tech-savvy population, local advertising may be a better option. A local advertisement can be anything from a business sign on the side of the road to an advertisement in a local newspaper or magazine. Promotions and discounts are also effective marketing strategies in smaller towns.

Continue Learning

In today’s fast-changing world, business owners have to stay constantly updated with the latest developments in their industries in order to remain competitive. You need to learn about new products, technologies, trends and laws that can have an impact on your business. It is also a good idea to take a course to improve your business management skills.

With its high level of income, low-income tax rate and excellent business support, New Hampshire offers a conducive environment for doing business. While starting a business requires a lot of research, consideration, and effort, it is essential that you perform all the required tasks well. By giving your business a good start, you will lay a solid foundation for future success and growth.

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