For those who can deal with the chilly weather, New Hampshire offers a business-friendly environment for aspiring entrepreneurs. The Granite State placed 6th in Tax Foundation’s 2020 State Business Tax Climate Index for its lack of sales and earned income taxes. New Hampshire’s low burden allows businesses to reserve much-needed funds for other key expenses.
To help you in your pursuit of entrepreneurial success, we’ve produced the definitive step-by-step guide to starting a business in New Hampshire. We’ll walk you through all of the important steps of making your dream a reality, from writing up a business plan, to filing the necessary paperwork to become official in the state.
New Hampshire small business statistics at-a-glance
- 133,676 small businesses operate in New Hampshire, accounting for 99% of businesses in the state.
- Over half (50.5%) of the state’s workforce is employed by small businesses.
- Firms with fewer than 100 employees have the largest share of small business employment in the state.
- Healthcare and social assistance is the leading small business employer industry in the state, followed by accommodation and food services, and retail trade.
- 76.86% of startups survive to their second year in New Hampshire.
- New Hampshire startups create 3.87 jobs in their first year, on average.
- New Hampshire ranks 21st in housing affordability, according to U.S. News.
Starting a business in New Hampshire in 12 steps
1. Develop an idea
Every successful business starts with a good idea. Ask yourself these questions:
- 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?
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.
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:
- Is there a demand for your product/service in New Hampshire?
- Who is your target market?
- Do existing businesses in New Hampshire offer a similar product/service?
- What makes your business unique compared to the competition?
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 New Hampshire market for your business idea.
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 New Hampshire.
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 New Hampshire.
New Hampshire Angel Investors and VCs
- North Country Angels – An angel investment group with over 20 years of experience in seed and early-stage funding. The group is based in Vermont but invests in companies around the entire New England region.
- eCoast Angel Network – A group formed in the Portsmouth, NH area with a focus on funding companies in e-commerce, healthcare, technology, and related fields. Initial investments range from $250K-$2 million.
- 10X Venture Partners – “New Hampshire’s most active angel group” makes investments between $50K-$500K in New Hampshire businesses. Fields of interest include mobile, internet, wireless, security, med-tech, and green tech.
Additional Investor Resources
- AngelList: New Hampshire Angel Investors – An exhaustive listing of over 5,0000 angel investors with their eyes on funding early-stage New Hampshire companies.
- New England Venture Capital Association – A highly active venture capital network that has been featured in the New York Times and Bloomberg. The network comprises over 700 members in 80+ firms.
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:
- 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.
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.
6. Register your business
After you commit to a business entity it’s time to register your business with the state of New Hampshire. The steps of this procedure vary depending on the type of business you are forming.
For sole proprietorships
According to state law, sole proprietors using their legal name to do business are not required to make any special filings with the government, though if you plan to operate under a name separate from your legal name, you must submit an application for registration of a trade name.
First, perform a search with the New Hampshire Secretary of State Business Name Database to make sure that your chosen name is not already in use. Next, fill out an application for registration of a trade name and submit it to the New Hampshire SoS. The form can be found here. The filing fee is $50.
For LLCs and corporations
The process of forming these two business entities in the state of New Hampshire is similar. The first step for both is appointing a registered agent to handle process notices and other assorted government paperwork on behalf of your business. This is a mandatory requirement in all 50 states.
Anyone with a physical address in the state can be a registered agent, meaning you can appoint yourself, however, hiring a professional is affordable and recommended. The New Hampshire SoS website hosts a list of registered agents active in the state.
Next, run a business name search to make sure that your chosen business name is free to use in New Hampshire. After confirming that your name is available, you can file the necessary paperwork to make your business official in the state.
To create an LLC in New Hampshire, you must file a Certificate of Formation with the New Hampshire Secretary of State. The form can be found here. Filing can be done online or through the mail. The filing fee is $100.
In New Hampshire, a corporation is created by filing Articles of Incorporation with the New Hampshire Secretary of State. The form can be found on the SoS website. Filing can be done online or through the mail, and the fee is $100.
7. 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.
Each state has its own laws and taxes regarding businesses. To find out which taxes apply to your business, visit the New Hampshire Department of Revenue Administration website for guidance. You can also file taxes online through the site.
8. 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 New Hampshire good for small businesses
9. 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.
New Hampshire does not issue a general business license, although many professions are regulated in the state and require special licenses or permits. Visit this page hosted by New Hampshire Employment Security for an index of occupations regulated in the state. You can also apply online for dozens of licenses.
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?
The most promising New Hampshire city to start a business in is Manchester. With a population topping 100K, Manchester is the state’s largest city and is regularly recognized by national publications as an excellent place to live and work.
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
New Hampshire small business resources
- New Hampshire: NH QuickStart – Create a login and register your business online, or file a trade name.
- New Hampshire Secretary of State: Registered Agent List – A directory of registered agents active in New Hampshire.
- New Hampshire Department of Revenue Administration: e-File New Hampshire – Create a tax account for your business and file online.
- New Hampshire Online Licensing – Apply online for one of dozens of state-issued professional licenses available.
- New Hampshire Small Business Development Center – A statewide organization dedicated to aiding NH entrepreneurs through free business counseling and providing access to funding sources.
- NH Tech Alliance – An organization dedicated to boosting the state’s tech ecosystem through events, and connecting entrepreneurs with funding.
- GRDC Enterprise Center – A 10,000 square foot business incubator and coworking space located in Plymouth with plenty of space and high tech resources.
- Alpha Loft – A business accelerator developed by the New Hampshire Tech Alliance that offers consultation services.
- Women’s Rural Entrepreneurial Network – A non-profit organization started in 1994 focused on enhancing entrepreneurial opportunities for women in rural New Hampshire that lack easy access to capital and other resources.
- SCORE New Hampshire – The NH base of the nation’s leading business mentorship network.