With the 4th-lowest labor costs in the nation, starting a business in Louisiana is a great choice for entrepreneurs. Start your business today with our simple step-by-step guide and get on the fast track to financial and personal independence.
Step 1: Choose the Right Business Idea
The first step toward business ownership is deciding what kind of business to start. Look for an idea that suits your interests, your personal goals, and your natural abilities. This will help you stay motivated when the going gets tough and will greatly improve your odds of success. We have assembled a comprehensive list of small business ideas to help you get started. Need inspiration? Here were the most popular ideas among our Louisiana visitors in 2020:
- Drive-In Movie Theater
- Gas Station
- Grocery Store
- Inflatable Bounce House Business
- Clothing Boutique
- Lawn Care Business
Our free Business Ideas Generator will help you identify great businesses that match your interests and lifestyle.
BUSINESS IDEAS GENERATOR
Step 2: Plan Your Louisiana Business
Successful businesses are built through careful planning. Before committing a significant amount of money and other resources toward your business in Louisiana, critically analyze your idea, and create a game plan. At a minimum, you should complete the following:
Name Your Business
What will you name your business? When naming a business, you'll want to choose an available name that follows Louisiana’s naming rules and resonates with your customers. Use our Business Name Generator to find the perfect brand name and website.
Find a Business Location
Do you know where your business will be located? Whether you’re opening a brick-and-mortar establishment or starting a business from home — your business location informs the type of licensing and permits you’ll need as well as your business’s growth potential. Doing your research on Louisiana’s popular areas such as Baton Rouge or New Orleans can help increase foot traffic and drive customer interest.
Conduct Market Research
Have you gotten to know your market? Before you write your business plan, conducting thorough market research is crucial. This can involve conducting surveys, doing search engine optimization (SEO) research, or holding focus groups. The goal of market research is to better understand your target market and competitors in order to craft an effective business plan.
Write a Business Plan
Have you written a business plan? Our Business Plan Generator makes writing your business plan easier than ever; just add your business’s information and you’re done!
A well-crafted business plan doesn’t just help you get organized while you start your small business in Louisiana. Business plans are used to obtain business funding and help you reach important milestones.
Here are some of the main components of a well-written business plan:
- Product Development: What problem does your business solve? What will set your product or service apart from the competition?
- Sales & Marketing: Who are your potential customers? How will you get their attention and convert them into buyers?
- People & Partnerships: What roles will you need to hire, and what professional relationships will you need to form in order to succeed?
- Financial Planning: How many clients or sales will you need in order to break even? How much money will it take to get there, and where will you get the funding?
Business Planning Resources
- Need Help? Find organizations in your local area that can assist you with planning.
- If you’re a woman in business, find funding, tools, and resources with this great Women in Business series.
Step 3: Get Funding
It’s no secret that you need funding to start a business, but before you can secure the money you need to cover startup costs, there are a few things you need to do first. Calculate your business costs before seeking outside funding. This will help you choose the right funding source for your Louisiana business’s needs. Next, be smart with your spending and get organized by creating a detailed financial plan.
Explore Business Funding Options
- Bootstrapping: This is the do-it-yourself approach to business funding which means you provide the capital for your business through personal savings as well as your current income. Once your business is in operation, profit is reinvested back into the business to continue its growth.
- Friends and Family: Financing your business through friends and family loans can be a great way to get the capital you need to start your small business. When mixing business with family and friends, it’s a good idea to establish a written agreement and repayment plan.
- Small Business Grants: Small business grants are essentially business funding for your business you don’t have to pay back. You can obtain a small business grant by completing an application process with a grantor.
- Small Business Loans: You can typically apply for small business loans through a bank or other lending institution. This funding method requires repayment but will provide you with the capital to cover startup costs or more.
Step 4: Choose a Business Structure
Registering your Louisiana company as a legal business entity — such as an LLC, corporation, or nonprofit — has two major advantages:
- Increased credibility
- Protection from personal liability in the event your business is sued
Find out which business structure is right for your new business in Louisiana.
Sole Proprietorship
A sole proprietorship is an informal business structure that isn’t incorporated or separated from its owner. This means that 100% of the business’s profits go to the owner; however, 100% of the financial liability should the business accrue debt or get sued falls on the owner as well.
Partnership
A partnership, like a sole proprietorship, is an informal unincorporated business structure but with multiple owners. Similarly, partnerships do not have liability protection that you find with a formal business structure.
LLCs
A limited liability company (LLC) combines the personal asset protection of a corporation with the flexibility of a partnership or sole proprietorship. Most small businesses prefer the LLC structure due to its easy maintenance and favorable tax treatment. Find out if you should start an LLC for your small business.
Corporations
A corporation is a separate legal entity that is owned by its shareholders. continue reading this have more formal regulations than LLCs and tend to be more attractive to investors. Most large companies like Apple fall under the corporate category.
Nonprofits
A nonprofit organization is one that is funded by donations instead of investors. Nonprofits are typically created to further a social cause and are exempt from paying taxes. The Red Cross is an example of such an organization.
If you choose not to register your company as a business entity, you will be held personally responsible for the debts and liabilities of your business.
In addition, partnership and sole proprietorship business owners may need to file a DBA, known in Louisiana as a trade name. A DBA is not a business structure and does not give you and your personal belongings the protection like an LLC would.
Find out more about how to file a DBA in Louisiana with our guide.
Step 5: Register Your Louisiana Business
Once you’ve chosen your business structure, the next step is to form your business. No matter what formal business structure you choose, there are a few common steps, including:
- Naming your business
- Choosing a registered agent: an individual or business entity that accepts tax and legal documents on behalf of your business.
- Getting an Employer Identification Number (EIN): a number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes.
- Filing formation documents.
In addition to these steps, each business structure has its own requirements that are unique to that business structure.
Here are the steps you need to take to register your business:
Form an LLC in Louisiana
LLCs are the simplest formal business structure to form and maintain. With less paperwork than other business structures, you can easily form an LLC in five easy steps.
- Name Your LLC
- Choose a Registered Agent
- File Your LLC With the State
- Create an LLC Operating Agreement
- Get an EIN
To file the Articles of Organization for an LLC in Louisiana, you must submit formation documents to the Secretary of State online, by mail, by fax, or in person, along with the $100 filing fee.
Read our full guide on How to Form an LLC in Louisiana or have a professional service form an LLC for you.
Start a Corporation in Louisiana
If you think starting a corporation is right for your business, there are five steps to starting your business as a corporation. Additionally, you’ll need to decide the type of corporation your business will be, such as a C corporation or S corporation.
- Name Your Corporation
- Choose a Registered Agent
- Hold an Organizational Meeting
- File Formation Documents
- Get an EIN
To file the Articles of Incorporation for a corporation in Louisiana, you must submit formation documents to the Secretary of State online, by mail, by fax, or in person, along with a minimum $75 filing fee.
Read our full guide on How to Start a Corporation in Louisiana.
Form a Nonprofit in Louisiana
Choosing to form a nonprofit involves many of the same steps as a corporation or LLC; however, with this business structure, you can apply for tax exemption, otherwise known as 501(c)(3) status, through the IRS.
- Name Your Nonprofit
- Choose a Registered Agent
- Select Your Board Members and Officers
- Adopt Bylaws and Conflict of Interest Policy
- File the Articles of Incorporation
- File With the Recorder of Mortgages
- Get an EIN
- Apply for 501(c)(3) Status
To file the Articles of Incorporation for a nonprofit in Louisiana, you must submit formation documents to the Secretary of State online, by mail, by fax, or in person, along with the $75 filing fee.
Read our full guide on How to Form a Nonprofit in Louisiana or have a professional service form a nonprofit for you.
Step 6: Set up Business Banking, Credit Cards, and Accounting
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
You can protect your Louisiana business with these three steps:
1. Opening a business bank account:
Once you feel confident about your answers to these questions, it’s time to move onto your business name. Your business name is the cornerstone of good branding and a successful business. To learn more about creating the best name for your business, read our How to Name a Business guide.
Last but not least, try our Free Logo Generator to get a unique logo for your business in Louisiana. Our logo maker is free (no sign-ups or email address needed) and it comes in all social media sizes. It’s easy and hassle-free–with no design experience required! Or, if you want to explore your options, you can also use this free logo maker by Tailor Brands.
Step 11: Build Your Business Website
After defining your brand and creating your logo the next step is to create a website for your business.
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital (e.g., small business loans and small business grants) later on.
3. Setting up business accounting
An accounting system helps you track the performance of your business and simplifies annual tax filings. Quality accounting software lets you download your bank and credit card transactions, making accounting fast and easy. Learn more about the importance of accounting and how to get started with accounting today. Or, hire a business accountant to help you navigate all your business accounting and tax needs from payroll to sales tax.
Step 7: Get Insured
Business insurance helps you manage risks and focus on growing your business in Louisiana. The most common types of business insurance you should consider are:
- General Liability Insurance
- Workers’ Compensation Insurance
- Professional Liability Insurance
We recommend that all small businesses, including home-based businesses, purchase a general liability policy. Businesses selling professional advice or services, such as consulting and accounting firms, should also consider a professional liability policy.
In Louisiana, businesses with one or more employees, including LLC members and officers, are required by law to have workers' compensation insurance.
Step 8: Obtain Permits and Licenses
To operate your new business legally, you will need to comply with federal, state, and local government regulations. In many cases, this involves obtaining one or more business permits and/or licenses. For example, a restaurant will likely need health permits, building permits, signage permits, etc.
To start a business in Louisiana, you’ll need different licenses and permits depending on the type of business you’re operating. Find out the licensing your business needs by performing a business license search or by utilizing the following resources:
- Federal: Use the US Small Business Administration (SBA) guide.
- State: Visit the Louisiana geauxBIZ Business License Checklist page.
- Local: Contact your local county clerk and ask about local licenses and permits
Recommended: Use a professional service to help you obtain required licenses.
Step 9: Hire Employees
For any business (unless you plan to be your business’s sole employee), building a strong team is a crucial next step in starting a successful business. But it isn’t just about finding the right people; you need to ensure you stay compliant with requirements for hiring employees legally. This includes ensuring that you are registered with the IRS for employee taxes and reporting new hires to the State of Louisiana.
Register for Louisiana State Employee Taxes
Unemployment Insurance Tax | Withholding Tax
Once you’ve built your team, we strongly recommend utilizing a payroll service to issue paychecks, track time, and make tax season more manageable.
Step 10: Define Your Brand
The strongest and most memorable businesses are built on a solid brand. When developing your brand, you should consider:
- what your business stands for
- what are your core values
- what will earn customer trust
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own and control.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Step 12: Promote and Market Your Business
Promoting Your Louisiana Business
There are many different methods to promote your business in Louisiana, but the most effective methods are:
- Press Releases
- YouTube
Press Releases
Press releases are a great way to promote your brand and are one of the most cost-effective strategies as they:
- Provides publicity
- Establish your brand on the web
- Improve your website's SEO, driving more customers to your website
- Are a one-time cost in terms of effort and money
- Have long-lasting benefits
- Google My Business
1. Choose a Business Idea
Take time to explore and research ideas for your business. At this stage, take into consideration your own interests, skills, resources, availability, and the reasons why you want to form a business. You should also consider the likelihood of success based on the interests of your community, and whether your business idea will meet an unmet need. Read our article for more tips on how to evaluate business ideas.
After you select an idea, consider drafting a business plan to determine your chances of making a profit. When you create a plan, you will have a better idea of the startup costs, your competition, and strategies for making money. Investors and lenders will want to review your business plan before providing financial assistance, and you can be prepared by drafting a plan before you start soliciting funding. To learn more about the benefits of business plans, and how to create one for your enterprise see Why You Need to Write a Business Plan.
2. Decide on a Legal Structure
The most common legal structures for a small business are:
- sole proprietorship
- partnership
- limited liability company (LLC), and
- corporation.
There also are special versions of some of these structures, such as limited partnerships and S corporations. You'll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Read our article for information on how to choose the best ownership structure for your business.
3. Choose a Name
For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the Louisiana Secretary of State (SOS). You can check for available names by doing a business entity search on the SOS website. You can reserve an available name for either 60 days (LLCs) or 120 days (corporations) by filing a name reservation form or going online to reserve at the geauxBIZ website. There are certain name requirements for LLCs and corporations (like including a word such as "L.L.C." for LLCs or "Company" for corporations). See How to Form an LLC in Louisiana and How to Form a Corporation in Louisiana for more information.
Is your business a sole proprietorship or partnership that uses a business name that is different from the legal name of the business owner (for a sole proprietorship) or surnames of the individual partners (for a partnership)? If so, you must file an Application to Registration of Trade Name with the clerk of court in the parish where you will do business.
If you plan on doing business online, you may want to register your business name as a domain name. See Choose and Register a Domain Name for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See How to Do a Trademark Search for more information.
4. Create Your Business Entity
- Sole proprietorship: To establish a sole proprietorship in Louisiana, you don't need to file any organizational documents with the state. For more information, see How to Establish a Sole Proprietorship in Louisiana.
- Partnership: To create a general partnership in Louisiana, you don't need to file any organizational documents with the state. Although not legally required, all partnerships should have a written partnership agreement. The partnership agreement can be very helpful if there is ever a dispute among the partners. For more information, see How to Form a Partnership in Louisiana. To form a limited liability partnership (often used by professionals), you must file an Application for Registration with the Louisiana SOS. For more information, see How to Form a Limited Liability Partnership in Louisiana.
- LLCs: To create an LLC in Louisiana, you must file Articles of Organization with the Louisiana SOS. You will also need to appoint a registered agent in Louisiana for service of process. In addition, while not required by law, you also should prepare an operating agreement to establish the basic rules about how your LLC will operate. The operating agreement is not filed with the state. For more information, see How to Form an LLC in Louisiana and How to Form a Professional LLC in Louisiana (for professionals).
- Corporations: To create a corporation in Louisiana, you must file Articles of Incorporation with the Louisiana SOS. You will also need to appoint a registered agent in Louisiana for service of process. Although not legally required, you also should prepare bylaws to establish your corporation's internal operating rules. Bylaws are not filed with the state. S Corporations must also file IRS Form 2553, Election by a Small Business Corporation, with the IRS. For more information, see How to Form a Corporation in Louisiana.
5. Apply for Licenses and Permits
Tax Registration. If you will be selling goods in Louisiana, you must register with the Louisiana Department of Revenue (LDR) to collect sales tax. If your business will have employees, you must register with the LDR for employer withholding taxes. You can register for both types of tax (as well as other business taxes) online via the Business Registration page of the LDR website.
EIN. If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business's name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.
Regulatory licenses and permits. These cover areas such as:
- selling particular items
- providing particular services
- providing particular services
- the environment; and
- agriculture.
Different regulatory licenses and permits are issued by different state agencies. At the geauxBIZ website, which is run by the SOS, you can create an online account and then sign in to create a business license checklist. For information about local licenses and permits, check the websites for any cities, parishes, or counties where you will do business.
Professional and occupational licenses. These cover people who work in various fields. The licenses section of the state government's website lists these various professions and occupations.
6. Pick a Business Location and Check Zoning Laws
You'll need to pick a location for your business and check local zoning regulations. Before you commit to a location, take time to calculate the costs of running your business in the desired spot, including rent and utilities. You can refer back to your business plan to evaluate whether you can afford your desired location during your company's early months. It is important to verify that the spot is zoned for your type of business. You might find zoning regulations for your town or city by reviewing your local ordinances and contacting your town's zoning or planning department. Read our article for more tips on picking a location.
One alternative to opening your business at a new location is running your company out of your home. If you decide to run a home-based business, again check your local zoning laws. In addition, review your lease (if you rent your home) and homeowners association rules (if applicable), either of which might ban some or all home businesses.
7. File and Report Taxes
Louisiana taxes every kind of business. See Louisiana State Business Income Tax for more information on state business taxes in Louisiana.
Sole proprietorships. Sole proprietors pay state taxes on business income as part of their personal state income tax returns (Form IT-540).
Partnerships. Partners pay state taxes on partnership income on personal tax returns. In addition, some Louisiana partnerships also must file Form IT-565, Partnership Return of Income.
LLCs. Members pay state taxes on their share of LLC income on personal tax returns. In addition, LLCs themselves may have to file an additional state tax form — either a partnership return or a corporation return. The specific form used (if any) will depend on how the LLC is classified for federal tax purposes. Louisiana LLCs also are required to file an annual report with the Louisiana SOS. See Louisiana LLC Annual Filing Requirements for more information.
Corporations. Shareholders must pay state taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, the corporation itself is subject to Louisiana corporation taxes (both a corporate income tax and a corporate franchise tax). And, finally, corporations must file an annual report with the Louisiana SOS.
If you have employees, you must also deal with state employer taxes.
And, apart from Louisiana taxes, there are always federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business.
8. Obtain Insurance
Business insurance can protect your company and your personal assets from the fallout of unexpected disasters, such as personal injury lawsuits or natural catastrophes. An insurance agent can help you explore the different coverage options for your business, which may include general liability insurance to protect you against claims relating to bodily injury or property damage, or malpractice insurance for professionals such as doctors and lawyers. To learn more, see Nolo's article, What Types of Insurances Does Your Small Business Need?
9. Open a Business Bank Account
No matter the type of business you form, you should consider opening a separate business account to make it easier to track your income and expenses. For some business types, like LLCs and corporations, a separate bank account is necessary to maintain your liability protection. To learn more, see Opening a Business Bank Account.