There’s no better time than the present for entrepreneurs to launch a new business venture in Nevada. The state boasts one of the ten fastest growing economies in the nation, and is tied for first with Idaho in population percentage growth among U.S. states. With the influx of capital and residents to Nevada comes entrepreneurial opportunity.
Operating a business in the Silver State doesn’t present a crippling tax burden, either: Nevada ranks 7th in Tax Foundation’s 2020 Business Tax Climate Index due to the fact that it levies no personal income tax or corporate tax, and boasts a low property tax rate, as well.
Now that you’re convinced of Nevada’s status as an ideal state to launch a company, read our comprehensive guide to starting a business in the state. We’ll walk you through all the steps of turning your idea into a reality, from drafting a business plan and pitching to investors, to registering with the state government and obtaining a business license.
Starting a Business in Nevada? Check out our ranking of the Best Cities to Live in Nevada.
Nevada small business statistics at-a-glance
- 254,337 small businesses operate in Nevada, accounting for 99.1% of total businesses in the state.
- 474,535 Nevadans are employed by small businesses, which is 42% of the state’s total workforce.
- 71,827 Nevada small businesses are minority-owned.
- Accommodation and food services is the leading small business employer industry in the state, followed by healthcare and social services, and construction.
- 92.49% of Nevada entrepreneurs start a business by choice rather than necessity, which is the 4th highest rate in the country.
- In their first year, Nevada startups generate an average of 6.39 new jobs, the 5th highest average amount in the country.
- 77.40% of Nevada startups survive their first year of existence.
- Tax Foundation rates Nevada’s income tax rate the 5th most favorable for business, and its property tax the 7th most favorable.
Sources: U.S. Census Bureau: Statistics of U.S. Businesses, Kauffman, Tax Foundation
Starting a business in Nevada in 12 steps
1. Develop an idea
Every successful business starts with a good idea. Ask yourself these questions:
Determine your personal strengths and interests: developing an idea that suits your personality and positive traits will provide motivation to put in the long hours necessary in addressing the myriad challenges you’ll face in getting your business off the ground.
Figure out how to market your expertise: if your business idea is not something you totally believe in and can sell effectively, it will be much harder to succeed.
- Which product or service can your business provide that doesn’t already exist on the market?
- How does your business idea refine an existing product or service?
2. Do the research
Once you have an idea, it’s time to put it through the wringer and decide if it’s viable in the market. Conduct market research to arrive at answers to these key questions:
Coming up with satisfactory answers may require refinement, or even a total overhaul, of your original idea. Be patient: you’ll only want to proceed with the next steps after determining that a niche exists in the Nevada market for your business idea.
- Is there a demand for your product/service in Nevada?
- Who is your target market?
- Do existing businesses in Nevada offer a similar product/service?
- What makes your business unique compared to the competition?
3. Draft a business plan
Now it’s time to write the blueprint of your business. A great business plan should chart the path of your company from infancy to success while being able to attract investors to provide financing.
Your business plan ought to include the following sections:
- Executive summary – An overview of your business and why it will be successful
- Description of business – Explain the advantages of your business and the problems it solves
- Market research – Provide research on your industry, target market, and potential competitors
- Organization and staff – Detail the nuts and bolts of your business; how it’s structured and who will run it
- Product or service description – State what you are selling or offering
- Marketing plan – Explain your strategy for attracting customers
- Fundraising – The money you’ll need in the next five years to grow your business and how you’ll spend it
- Financial forecast – Data and balance sheets providing a financial forecast for your business
- Appendix – An optional section with supporting and/or requested documents like resumes, letters of reference, permits, etc.
4. Secure funding
Every business needs money to get off the ground. In fact 82% of businesses that fail do so because of a lack of cash flow, U.S. Bank found in a recent study. Your business plan should include a detailed estimate of the funds you’ll need to cover expenses for at least a year, so now it’s time to acquire the money.
If you aren’t wealthy enough to self-fund your business, you can choose from a number of other funding options. These include a loan from the U.S. Small Business Administration, taking out a loan from a commercial bank, launching an equity crowdfunding campaign, or securing funding from an angel investor or venture capitalist group active in Nevada.
An angel investor is a wealthy individual who invests their personal finances in a startup, typically in the beginning stages, whereas a VC is a group of investors that will fund a business throughout its existence.
Which route you choose depends on the specifics of your business: angel investors typically invest smaller sums to help get a startup off the ground, while VCs invest larger sums of money in exchange for a greater say in the operations of a business. Smaller startups usually opt to pursue funding from angel investors. Plenty of both types of investors are operating in Nevada.
Nevada Angel Investors and VCs
- Sierra Angels – Founded in 1997, Sierra Angels is one of the longest-running and most successful angel investment groups in the state. Boasting a membership of over 50, the group has funded around 100 companies in a wide range of industries.
- Reno Seed Fund – An investment fund based in Northern Nevada’s largest city with their eyes on businesses in the fields of software, advanced manufacturing, consumer products, and the internet.
- Battle Born Venture – An evergreen VC program affiliated with the Nevada Governor’s Office of Economic Development that invests in businesses in many sectors, including agriculture, healthcare, logistics & operations, and more. Applications are accepted through the Gust platform.
- Ozmen Ventures – A seed and early-stage VC fund based in northern Nevada. So far, the fund includes 7 companies in its portfolio.
Additional Investor Resources
5. Decide on a legal business entity
The form of business entity you choose will affect many factors going forward. There are 3 main options to decide from:
Nowadays, LLCs are the option of choice for small business owners as they are easy to manage and provide the benefits of a corporation while lacking their complex structure. Taxwise, they operate more like a sole proprietorship.
You may want to consult with an attorney to help decide which entity works best for your business.
- Sole proprietorship – The name for running a business by yourself. Legally, you and your business are one and the same, with no separate legal entity for your business. A partnership is legally identical to a sole proprietorship, except that it comprises two or more people.
- Corporation – A complex legal structure that is a separate entity (providing legal protection to owners) from the owner and comprises directors, officers, and shareholders.
- LLC – AKA “Limited Liability Company”, this is a hybrid entity between a sole proprietorship and a corporation that possesses advantages of both. An LLCs provides the liability protection of a corporation, yet isn’t subject to double taxation as the profits go through your personal tax return.
6. Register your business
Settling on the entity your business will take means that it’s time to register with the state of Nevada. This process varies whether you are establishing a sole proprietorship, an LLC, or a corporation.
For sole proprietorships
Sole proprietors are allowed to run their business in Nevada without filing with the state if they are operating under their legal name. However, if your business name is different from your legal name, you must file a fictitious name certificate.
First, use the Nevada Business Search to confirm that the name you’ve selected for your business isn’t too similar to a company already exists in the state. Next, visit the county clerk in the county your business is located to submit an application for a fictitious name certificate. Here is an example of this form from the Clark County Clerk’s office. The filing fee is typically $20, but the amount varies between counties.
For LLCs and corporations
The procedure for forming either of these two entities is similar, except for the form that must be submitted to the Nevada Secretary of State.
First, you must appoint a registered agent to handle process notices and other government correspondence, such as tax forms, on behalf of the business. This is a mandatory requirement in all 50 states. Click here for a list of registered agents in the state compiled by the Nevada SoS.
Next, run a search to verify that your chosen business name isn’t already in use. If the name is free to use, you can file the necessary documents to form your business in the state.
To form an LLC, you must file Articles of Organization with the Nevada SoS. This can be done through the mail, or by using the Silverflume Business Portal hosted by the state government. The fee to file this document is $75.
A corporation is created through the filing of Articles of Incorporation. You can do this through the mail or online via the Silverflume Business Portal. The fee depends on the number of shares your corporation is eligible to issue upon creation, beginning at $75 for $75,000 shares or under.
7. Get the necessary licenses and permits
Depending on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. For example, a restaurant will need a liquor license, and a pawn shop will need a reseller’s license. The paperwork may prove a hassle, but it’s a necessary ordeal that will protect you from fines, lawsuits, and other legal hazards.
Nearly all businesses in Nevada must acquire for a state business license. Visit the state government business forms portal to find the appropriate form for your business. The fee for most types of businesses, including sole proprietorships and LLC’s is $200, though the fee for a corporation is $500. Licenses must be renewed annually for the same fee paid in the initial application.
8. Acquire federal and state tax IDs
Now you should obtain a Federal Employer Identification Number (EIN), which is like a social security number for a business and allows you to open bank accounts, handle payroll, and file taxes.
For sole proprietorships, an EIN is optional, although it is required for corporations and LLC’s. You can apply online for your EIN through the IRS website, or fill out and mail this form.
Nevada doesn’t have a standard corporate tax or personal income tax, however, it does administer a Modified Business Tax that most employers must pay. The MBT is a type of payroll tax of 1.475% on wages after deductions have been made. However, the initial $50,000 of gross wages is not taxable. Visit the Nevada Department of Revenue for more information, and use Silverflume to make tax payments.
9. Open business banking and credit accounts
Opening a bank account for your business is crucial because it allows you to separate company assets from your personal assets, and makes filing taxes a lot easier. This is a recommended step, even if you are operating a sole proprietorship.
It’s also a wise idea to obtain a credit card for your business because it will help you isolate business expenses and build up credit for your company, which may help in securing investment in later stages.
Banks operating in Nevada good for small businesses
10. Choose a location
Whether you are running an online business or opening a restaurant, location is everything. Be aware of the demographics of the neighborhood or town that you are considering: Are the local residents likely to visit your business? Will nearby competitors take a share of your potential profits?
Most of Nevada’s population resides in a handful of large cities, with the neighboring cities of Henderson and Las Vegas being the largest population centers. All businesses started in Nevada take advantage of the same tax breaks, regardless of the city they are founded in.
Based on its high quality of life, affordable cost of living, and recent economic and population growth, Reno, Nevada’s major city in the north, is our choice of the best Nevada city to start a business in.
11. Get insured
No matter what type of business you form, buying insurance coverage to protect yourself in the case of property damage or legal action is a good idea. In fact, businesses with employees are required by the federal government to have two types of insurance, while others are strongly encouraged, or required at the state level, depending on your business type. Consult with a licensed insurance agent to find out which types of insurance you should get.
Required forms of insurance:
- Workers’ compensation: Covers medical costs and disability benefits if an employee is injured or becomes ill on the job.
- Unemployment insurance: Provides benefits to workers after a loss of job through no personal fault.
Recommended forms of insurance:
- Professional liability insurance: Covers losses as a result of property damage, medical expenses, libel, slander, and negligence claims.
- Commercial property insurance: Covers property damage to business owned properties and possessions as a result of fire, theft, or storm.
- Disability insurance: Provides short-term benefits for employees suffering an illness or injury. Required in certain states such as California, New York, and Hawaii.
12. Develop an internet presence
Establishing an identity on the web is an important investment in a business’s future development. Here are some key steps in the process:
- Register a domain name for a company website (You can use domain.com, Bluehost, GoDaddy.com, Namecheap.com). Design the website and fill it with content.
- Create profiles on the popular social media services (Twitter, Facebook, Instagram)
- Register a Google profile for your business
- Create accounts on review sites such as Yelp, Google Reviews, and TripAdvisor
Nevada small business resources