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Starting a Business in Tennessee

A complete step-by-step guide to start your business and get on the fast track to financial success.

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Doing Business In Tennessee

Business facts:

The Nashville region is home to more than 1.9 million people and more than 40,000 businesses. Middle Tennessee is defined by a diverse economy, low costs of living and doing business, a creative culture and a well-educated population.

Increasing foreign direct investment and exports keeps the Nashville region on the leading edge of international business. 

Reasons to select Tennessee’s business-friendly environment: No personal income tax on wages and salaries. A right-to-work state. A long history of fiscal responsibility that crosses party lines. Lowest state debt per capita in the country, per The Tax Foundation. Second lowest in the U.S. for state and local tax taxes paid per capita, per The Tax Foundation.

Small business and Startup environment

Tennessee has 471,316 small businesses, according to the most current federal data available.

Of those 471,316 small businesses in Tennessee, 106,729 have employees. The remaining 364,587 are Tennessee small businesses that have no employees.

Cultural diversity, unique neighborhoods, a variety of industries and a thriving creative community make Middle Tennessee among the nation’s best locations for relocating, expanding and startup companies. 

Nashville may be known as the country music capital, but a slew of ethical fashion brands, Pinewood Social, and an $84 billion health care economy are transforming its reputation as an emerging tech hub.

Launch Tennessee is a public-private partnership that supports entrepreneurs from ideation to exit, guided by a vision of making Tennessee the most startup-friendly state in the nation. 

STEPS TO STARTING A BUSINESS IN TENNESSEE

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Step 1: Choose A Business Structure

The most common business structures are sole proprietorship, partnership, limited liability company (LLC), and a few different types of corporations—the standard corporation (often called a C corporation or “C corp”), the small business corporation (often called an S corporation or “S corp”), and the benefit corporation (often called a B corporation or “B corp”).

The most common business structures are:

Step 2: Choose The Right Business Name

Choosing a business name is important, you want to make it easier for your customers to remember it, here are some tips:

  1. Avoid hard-to-spell names.
  2. Don’t pick a name that could be limiting as your business grows.
  3. Conduct a thorough Internet search.
  4. Search and purchase a domain name.
  5. Use a name that conveys some meaning.
  6. Conduct a trademark search.

Step 3: Register Your Business

Depending on the business structure you chose you will need to register your business.

Tennessee Resale license 

Tennessee Business Entity Search

Step 4: Obtain an EIN Tax Number

With limited exceptions, most businesses require an Employer Identification Number (EIN), also known as a Tax ID Number. An EIN is used to identify a business in its federal tax filings. Without an EIN, you can’t hire employees or open a business bank account.

Click Here to Apply for EIN number online

Step 5: Open A Bank Account

– Open a business bank account:

  • Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

– Get a business credit card:

  • Helps you separate personal and business expenses.
  • Builds your company’s credit history, which can be useful to raise capital later on.

Step 6: Licenses & Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

Here are some links for Tennessee Businesses:

Selling products? Check Tennessee Resale Permit

Business Licensing for the State of Tennessee

Step 7: Branding & Marketing

Your brand is the image customers have of your business, so it’s important to determine who is your audience and what is the message that you want to project. That way, your company’s image will be what you intend it to be. It should be strategic and intentional.

Step 8: Establish a Web Presence

Creating an optimized website helps you to gain important visibility for the right terms. A website is a powerful sales tool and one that allows you to address your customers’ concerns, give them the information they need to make a decision and create compelling calls to action.

In addition to a website, you should also consider other avenues for promoting your business online:

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