Rhode Island Franchise Laws
How to Open a Small Business in Rhode Island (including Franchises)
The decision to start a small business in Rhode Island can be both exciting and unsettling at the same time. The good news is that Rhode Island has broken down the process to make it simple and easy. One of the most challenging elements of the process is figuring out the kind of business you'd like to open. After you've made your decision, everything else will fall into place, and before you know it you'll be well on your way.
1. Create a business plan. A business plan will help to organize how your business will operate, enable you to set financial goals and expectations, and provide you with a number of actions that need to be com pleted to advance your plan. You may want to consult a local organization, such as the local Chamber of Commerce, that can connect you with an organization to help guide you through developing your business plan.
2. Choose a location. To keep costs low, especially in the start-up phase, entrepreneurs will use a home office or find shared office space with other entrepreneurs of a similar industry. Such shared work spaces are called incubators. Your local Chamber of Commerce or the Rhode Island Economic Development Corporation can help locate available incubator space in your community.
3. Obtain financing. A good business plan will help you estimate the type and amount of financing you'll need to get started. Most traditional lenders such as commercial banks may want to see your business plan as well as information about your personal finances as criteria for approving your loan. In addition, the state provides financing, such as loans and grants for entrepreneurs and small businesses. Plus, there are community organizations that offer micro-financing, loans of a few thousand of dollars to entrepreneurs meeting certain qualifications. You can find out more information about micro-financing opportunities through the Rhode Island Economic Development Corporation, which also administers a micro-business emerging growth fund.
4. Register your business name with the Rhode Island Secretary of State's office. You can obtain a Fictitious Business Name Statement from their website to complete as part of the registration process. Also, you should be aware that if the name you register is the same as or similar to another business registered in Rhode Island, you'll need to either change it or add the type of business to the name. For example, Fran's Finances may need to change to Fran's Finances, LLC.
5. Declare your business type, such as a corporation, limited liability corporation or nonprofit organization and register it with the Secretary of State's office. You'll need to provide a Rhode Island business address at the time of registration. If you're unsure about what type of business to register as, contact a business tax attorney in Rhode Island who can explain the advantages and disadvantages of each.
6. Obtain an Employer Identification Number (EIN) or federal tax identification number from the federal Inter nal Revenue Service. This number is used to distinguish your business from all the rest. You'll be asked to provide this information for all formal dealings with lenders, the state and federal government and the tax authorities.
7. Apply for a business license with the state Division of Taxation. Rhode Island has an online system to register new businesses.
Tips & Warnings
Depending on the type of business you're starting, you may need to obtain operating permits. You'll want to contact a local business organization or check with the Rhode Island Economic Development Corporation to review permit requirements and other questions you have about starting your business.