Steps to Start a Business

Step 1 - Conduct Market Research and Create a Business Plan

Conduct market research and create a business plan

Market Research: Gather information to understand the local market, customer needs, competitors, and industry trends.
Business Plan: Develop a comprehensive business plan that includes your business goals, target market, financial projections, marketing strategies, and a plan for growth.

Step 2 - Choose Your Business Structure

Decide on the legal structure for your business. Common options include:

Sole proprietorship: simple and least expensive type where the ownership can only include one person. There is no legal separation between business and the owner resulting in personal liability.
Partnership: A business owned and operated by two or more people who share ownership and responsibilities.
Limited liability company (LLC): combines the benefits of a corporation and a partnership. It provides liability protection with flexibility in taxation.
Corporation (inc.): separate legal entity offering liability protection but with more regulations and taxes.

For more information on business structures, you can consult with a business attorney or accountant.

Step 3 - Register your business name

Choose a business name that complies with state and local regulations. It should be unique and not infringe on any trademarks. You may need to register it with the Washington Secretary of State for a Trade Name (DBA – Doing Business As). You can search to see if the name is already in use and register your trade name with the state by visiting their website.

step 4 - obtain an employer identification number (EIN)

If you plan to hire employees, you will need an EIN from the IRS. It's similar to a social security number for businesses. To obtain an EIN you can apply online through the IRS website.

step 5 - register for a state business license

Once you have an EIN, you will need to register for a business license through the Washington State Department of Revenue. If you plan to sell goods or services subject to sales tax, you will also need a sales tax permit from the Department of Revenue. To apply online or learn more visit the DOR website for more information.

step 6 - apply for necessary permits and licenses

If your business is located in the City of Lynnwood, you will also need a City endorsement. To verify that your business is within city limits, check your address through this tool. There are three types of city business licenses including:

Resident Business License: For businesses operating in a physical location in the City of Lynnwood.
Non-Resident Business License: For businesses with a physical location in another jurisdiction but operating or providing services in the City of Lynnwood.
Home Occupation License: For businesses operating out of a home / residence.

The City has varying zoning restrictions and you will need to ensure that your business location is zoned appropriately for your type of business. You can search your business address to see what the area is zoned for through this online tool.

Special permits may also be required depending on your business type. These type of permits include:

Health Permits: for food related businesses. Visit the Snohomish Health Department for more information about health permits.
Building Permits: Are you planning to perform any construction or improvements to your business space? You may need a tenant improvement permit or other commercial permit. Find out more information about permits.

step 7 - comply with employment laws

If you have employees, you must register with the Washington State Employment Security Department for unemployment insurance and other employee-related taxes. Learn more.

Washington State also requires businesses with employees to have workers' compensation insurance through Labor and Industries. Learn more.

step 8 - register for local taxes

Depending on the nature of your business, you may need to pay local taxes. The City of Lynnwood does not have a Business & Occupation tax (B&O), but you may still need to register with the State. Learn more.

step 9 - set up financial systems

Open a business bank account
Consider obtaining a software like QuickBooks, Xero, or FreshBooks to manage finances, track income, and prepare for taxes.
Hire an accountant: if needed, hire an accountant or tax advisor to help you set up your financial system and ensure compliance with all tax laws.

Step 10 - purchase insurance

Businesses often need a variety of insurance types, such as:

General Liability Insurance: covers accidents or injuries that occur on your business premises
Property Insurance: protects your property from theft or damage
Workers' Compensation Insurance: this is required if you have employees
Professional Liability Insurance: This is useful if your business provides professional services.

Consult with an insurance agent to determine the right coverage for your business.

Step 11 - market your business

Consider creating a website, social media accounts to promote your business. Performing local advertising or joining the Lynnwood Chamber of Commerce is a great way to market your business.

Step 12 - open your business!

Our economic development team is available to consult with your business and help you get connected to all the resources you may need for a smooth process. Contact us at 425-550-4891 or send us an email to schedule time to meet.

The City of Lynnwood offers customized small business support to those looking to start or grow their business. The process of starting a business can be daunting, but our team is here to help. Follow the suggested steps and find resources to help start and grow your business. The City's economic development team is available to consult with your business and help you get connected to all the resources your may need to get started. Call us at 425-550-4891 to get started.

Email Us For Business Assistance