Starting a new local business in Sacramento is a monumental task, but can be accomplished with footwork, perseverance and knowledge. One must learn the local laws regarding businesses and figure out the dynamics to creating and running a successful company. The primary consideration a new business owner must take into account is the fact that Sacramento does not require the establishment of a city business license. Instead it requires a business operation tax account, which is paid annually.
Steps to Starting a Business
1. Figure out what type of business to start.
- Does said business require a license?
- Is there a lifelong dream project of interest?
2. Determine the startup costs.
- Assess the amount of capital it will take to build this business.
- Are there any unforeseen costs that can accrue?
3. Assess the competition.
- Where is this competition located?
- Is the market saturated?
4. Find a location.
- Establish an office or storefront.
- Furnish with necessary equipment.
5. Obtain the necessary paperwork.
- Choose a business name.
- Register the business with the state.
- Obtain a business operation tax certificate.
- Get insurance on the business.
- Website with SEO optimization.
- Social media such as Facebook and Twitter.
- Business cards.
- Radio or TV spots.
Types of Local Businesses Recognized by the City of Sacramento
1. Sales & Services
- Selling items.
- Providing a service.
- Fees are assessed annually from gross receipts.
- Requires a license from the State of California, i.e. an attorney, physician, CPA etc.
- Fees assessed by length of time and number of licenses in the same business.
- Any broker of any kind.
- Flat rate fee based with the addition of employees.
4. Commercial Rental.
- Owners of commercial property such as business buildings.
- Annual fee based on the total of gross rent.
5. Residential Rental.
- Owner of four or more rental units.
- Fee assessed by gross receipts.
- Must file with the Rental Inspection Program as well.
Obtaining a Business Operation Tax Account
1. Determine if the business will be operated out of a residence. If this is the case, the business will require a home occupation permit. This one time fee due at the same time as the business operating tax application and fee.
2. Apply to the Revenue Division of Sacramento. Your fees will be processed and the applications will be forwarded to the Community Development Department.
3. Approval of zoning occurs next. If approved, a business operations tax certificate will be mailed to the company’s address.
Building the Funds to Start an Operation
1. Choose a franchise. Many franchises are either for sale or can be established. These companies often have plans to help an entrepreneur start a business with loans.
2. Attempt to get a loan from a bank or credit union.
3. Leverage already existing property such as getting a vehicle title loan for a car.
4. Find silent partners who will invest for shares in the company.
Companies That Require Special Permits
1. Taxis require a number of forms for each of the following for the fleet association, vehicles, drivers and law enforcement.
2. Towing requires an application to start a towing company, a vehicle permit and forms for law enforcement.
3. Food trucks require a driver and vehicle application as well as forms for the police department.
4. Medical marijuana has a plethora of paperwork and goes through moratorium periods.
5. Numerous others such as billiards, fireworks tents, astrology and Christmas tree lots require permits as well.
Starting a business in Sacramento is not a process that should be taken lightly. Knowing what business would be good for the area and the owner are both important aspects of this venture. Many businesses fail, but the one’s that succeed are those that assessed the market and made proper decisions along the way.