How to Start a Small Business in California

1. 

   1

   Create a business plan. This plan should include the financial, managerial, marketing, manufacturing and production information necessary to run your business successfully in the first 5 years. You will be required to present your business plan to investors, potential partners and other professionals.

   • The US Small Business Administration (SBA) and other organizations have instructional articles on how to write a business plan.^[6]

2. 

   2

   Finance your business. Many people start to look for financing before they file official paperwork. Look at California's business website for ideas on who to contact. In general, you should contact banks and other financial institutions, governments, and venture capital firms.^[7]

3. 

   3

   Choose a location. Because of its large economy, different cities in California provide access to different clientele.^[8] For example, San Diego is known for its science and engineering companies, Los Angeles supports many entertainment companies and San Jose is known for its tech companies.

   • Contact local Chambers of Commerce in these and other cities to get an idea of how the infrastructure in each place can work to your advantage.

4. 

   4

5. 

   5

   Apply for intellectual property protection. If you are going to have a unique name or logo, you may want to consider applying for trademark protection with the United States Patent and Trademark Office (USPTO). If you meet certain criteria, your trademark will protect your intellectual property into the future. You can apply online through the USPTO website.^[9]

6. 

   6

   Appoint a registered agent. This person or corporation must reside in California and will be designated to accept service of process (i.e., court papers) if you are sued.^[10]

   • There are businesses you can hire to act as your registered agent. You will pay a small fee and in return they will be your registered agent.^[11]

7. 

   7

   Draft operating agreements. It is always a good idea to draft documents that lay out how your business will run and be managed. If you are starting an LLC, you will actually be required to have one. Operating agreements touch on some, if not all, of the following subjects:

   • Members, their contributions, and their share of profits;
   • Management of the company;
   • Rights and duties of members;
   • Transfers of interest;
   • Cessation of membership;
   • Dissolution; and
   • Amendments to the operating agreement.^[12]

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