How to start a business in Idaho in 8 steps
Owning a small business in Idaho lets you aspire to earn a living doing something you love while keeping a flexible schedule. It can bring high levels of personal satisfaction and the opportunity to serve your community.
However, running an Idaho business isn’t all sunshine and roses. You must complete several steps before officially opening your doors to the public. You don’t have to be a business wizard, but following these 8 steps can give you an excellent foundation to get your business up and running.
1) Think about the type of business you want to start
The first place to start is to choose the type of business that fits your interests, goals, and skills. For example, you might dream of opening a restaurant in Boise but don’t want the hassle of a wait staff. In that case, you might consider starting a food truck instead.
You must also consider whether you need physical space for your business:
- Can you run it from home?
- Do you need a physical location?
- Will you focus on providing a service?
- Do you need space for an inventory?
Look at other companies you admire and find out what makes it work for them. Analyze processes and procedures you see small business owners using, then modify them to fit your business and industry.
If you’ve worked on the business side of things before, you may have a jump-start for product inventory, sales, marketing, bookkeeping, and other administrative tasks.
Above all, be honest about your strengths and skills. For example, suppose you want to open your own architecture design firm but don’t like the idea of making sales calls and building relationships.
Are you prepared to take on the role of a salesperson as well as a designer? Or should you hire an employee or enlist the help of a business partner for those tasks?
Starting a new business requires a lot of hours, sweat equity, and financial investment. Unfortunately, not everyone is prepared to face the less glamorous parts of a startup.
If starting your small business is something you are ready to do regardless of the obstacles and setbacks, think about the type of business you want, make a plan, and move forward.
2) Set up your legal structure
Every small business needs a legal structure to determine how it handles taxes, legal liabilities, and employees. Fortunately, the State of Idaho provides excellent business resources to help you decide.
If this is all new to you, work with an attorney, accountant, or CPA to determine the best way to structure your Idaho small business:
- Sole proprietorship: If you’re the only person working in the business, a sole proprietorship is the simplest way to start. You don’t typically need to file extra paperwork, although that depends on your industry. You may need a business license or permit. Keep in mind that sole proprietorships don’t offer much protection against personal liability.
- Partnership: Partnerships are an excellent option when two or more people want to own a business together. It’s a good choice among professionals like attorneys and doctors or groups who wish to test their business idea before moving on to a more formal business structure.
- Limited Liability Company (LLC): An Idaho LLC can include one person or several partners. It offers personal liability protection by separating business and personal assets—typically, that means someone can sue your company without your vehicle, house, and savings accounts being at risk. As a pass-through business entity, an LLC’s accounting and taxes are straightforward compared to other incorporated structures.
- Corporation: A corporation is its own legal entity—it can make a profit, pay taxes, and be held legally liable. It has a different and more complex tax structure, so it’s uncommon for small businesses to start this way. However, choosing a C corporation or S corporation can offer the strongest protection to its owners from personal liability.
- Nonprofit: Nonprofit businesses serve the community through charity, education, religious, literary, or scientific work. Typically, they are exempt from paying income taxes, and the profits are reinvested into the company’s services.
Once you settle on your small business' legal structure, write a business plan. It guides you through each stage of your business, from startup to management.
To help you outline your management structure, mission statement, market analysis, products, services, and finances, the Small Business Administration (SBA) has business plan templates available.
3) Name and register your business
With your business plan and legal structure in hand, your next step is to name and register your business with the Idaho Secretary of State.
If you haven’t settled on a name, brainstorming business names can be thrilling—here are a few things to keep in mind when naming your Idaho small business:
- Avoid using a claimed name: Check with the Idaho business search at Idaho.gov to determine if the name you want is already taken. Also, stay away from words and phrases that could imply government affiliation.
- Use an Assumed Business Name: Also called DBA ("doing business as"), an Assumed Business Name is required if you're a sole proprietor and don’t want to use your surname as the business name.
- Specific naming rules for an LLC: When forming your LLC, your business name must include limited liability company, Limited Company, LLC, LC, or Ltd Co.
- Idaho corporation naming rules: Your name must contain one of the following words or abbreviations: Corporation, incorporated, company, limited, Corp, Inc, Co, Ltd.
Register with the Idaho Secretary of State by submitting the articles of incorporation, certificate of organization, operating agreement, or other legal forms when you settle on the perfect name.
If you aren’t ready to file business formation paperwork, you can complete an Idaho business name reservation form. The state can hold the name for 4 months with this form while you get everything in order.
Lastly, register your Idaho small business with the IRS by requesting a federal Employer Identification Number (EIN). Your company’s EIN makes it easier to open bank accounts, get a loan, and submit taxes.
4) Apply for licenses and permits
In the excitement to start your business, don’t overlook state business licenses and permits. There isn’t a one-size-fits-all answer to what you need—it can vary by location and industry.
In Idaho, your business must complete the Business Registration (IBR-1) if you’ll collect sales tax or have employees. This form establishes your need to register with the Idaho State Tax Commission and have Workers' Compensation requirements and insurance, among other things.
After that, you can apply for a business license at your city clerk's office and check with the city, county, and state governments about industry-specific licenses and permits that your business might need. For example, starting a restaurant in Idaho Falls can have different requirements than opening a clothing boutique.
Check with your county clerk’s office or a local legal professional to discover other licenses or permits that might apply to your business.
Be sure to organize and budget for the applications and filing fees you submit. Typically, permits and licenses expire every year or two. Mark your calendar, so you don’t miss a renewal date.
5) Choose a location
Choosing a location can be exciting, but try not to get ahead of yourself. Even if you found the perfect place, don’t put the cart before the horse by signing a lease before you’re ready.
Before settling on a space, consider your business needs:
- What type of business are you running?
- Will you hire one or several employees to start?
- How fast do you want to grow?
- How much competition is in the area?
You must also think about zoning restrictions. So, don’t rush into setting up your storefront before you’re ready.
6) Open a bank account and prepare for future taxes
No one enjoys an IRS audit, so set up your finances properly by opening a business bank account and preparing for business taxes when launching your business.
If you’re a sole proprietor, you may be able to use your personal bank account. However, a bank account that’s separate from your personal account makes filing taxes easier. A different business account is required for LLCs and corporations.
Applying for a business credit card might also make sense for your business.
If you did not already request an EIN from the IRS, now is a great time to do it. You’ll use your EIN when applying for bank accounts, credit cards, and small business loans.
Unless you have bookkeeping experience, consider outsourcing this task to a professional. Accountants offer a high level of organization and assistance, especially when tax season rolls around.
7) Purchase business insurance
Getting your Idaho small business up and running is exciting. However, protecting yourself and your business from financial catastrophe is a crucial step to launching your company.
Nearly every state requires workers' comp if you have at least one employee. This insurance covers lost wages and the cost of medical treatment if your employee suffers a work-related sickness or injury.
Idaho small business insurance safeguards your venture from unforeseen events. Depending on your business, you may have greater risk exposure and want to consider:
- General liability insurance: Liability insurance protects your company from a lawsuit resulting from property or bodily injury.
- Business interruption insurance: Suppose a customer crashed into your storefront, and you had to close for repairs—business interruption insurance helps cover lost income during repairs.
- Business and personal property insurance: Also called commercial property insurance, this coverage is 2 types of insurance policies that protect your business property (building or storefront) and business personal property (items inside the building).
Huckleberry offers a convenient Business Owner's Policy bundle that conveniently offers all 3 types of coverage. The proper insurance can give you peace of mind, so you can focus on growing your business, not "what-ifs."
8) Create a marketing plan, hire employees, and more
You might have a steady stream of customers from the initial buzz around opening your company—but don’t wait to set up a marketing plan and advertising budget. The right marketing plan can draw in customers and boost your business.
Don’t wait to set up a solid online presence. Purchase a domain name to launch your company’s website, print some business cards, and post on social media to get customers excited about all you have to offer.
When you’re ready to start hiring employees, the Idaho Department of Labor has dozens of resources. You’ll discover guidance on recruiting talented staff, managing employee taxes, hiring veterans, and labor laws.
Social media can get prospective employees excited about your business and your mission. Be sure to check online classifieds like Craigslist, Monster.com, and Indeed for candidates, too.
If you are part of a local chamber of commerce, put out the word you’re looking for help. Your fellow business owners may know of local people who might be a great fit.
Keep in mind that Idaho requires businesses to report new hires within 20 days, so take the time to prepare and process the forms. Typically, to be compliant, you will need:
- Signed copy of the offer letter or agreement
- Employee's personal information like full name, address, phone, emergency contacts, and Social Security Number
- IRS Form W-4 and I-9
- Idaho state withholding form
- Insurance forms, such as health insurance selection and life insurance enrollment
- Signed copies of the employee handbook or job description
Depending on your industry, you may require additional paperwork—such as a non-disclosure agreement or other forms.
Great job! Launching a startup is no small feat, but you're well on your way. And now that you’re a business owner, protect your business from the unexpected with small business and workers’ compensation insurance.
Huckleberry wants to make purchasing Idaho small business insurance easy, so you can get back to what matters most—running your company. That’s why we make it fast and easy to get a quote in minutes and finish everything online.