How to Start a Business in North Carolina in 10 Simple Steps

Starting a business in North Carolina means you have access to a diverse array of business opportunities and markets.

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North Carolina is a goldmine of opportunity for entrepreneurs. From the rolling Appalachian Mountains to the bustling tech hubs of Raleigh-Durham and Charlotte, the state offers a vibrant landscape for starting a business.

Whether you’re dreaming of launching a mountain-crafted product or developing the next big tech solution, this step-by-step guide walks you through how to start a business in North Carolina.

Why start a business in North Carolina

North Carolina isn’t just a state—it’s a thriving ecosystem for entrepreneurs. With 1.1 million small businesses making up 99.6% of all businesses in the state, you’ll be joining a powerful community of innovators. These businesses employ 1.7 million people, representing 44.2% of the state’s workforce. 

What makes North Carolina so special? It’s a perfect blend of business-friendly policies, access to major markets, and a diverse economic landscape. Whether you’re in agriculture, technology, manufacturing, or service industries, you’ll find a supportive environment that helps businesses grow and succeed.

10 steps to start a business in North Carolina

1. Choose a business idea
2. Name your business
3. Create a business plan
4. Choose a business structure
5. Get an employer identification number
6. Obtain business licensing and permits
7. Examine insurance options
8. Understand financial considerations
9. Market your business
10. Set up a business bank account

1. Choose a business idea

Your business starts with a spark of inspiration. But turning that spark into a sustainable business idea requires careful thought and research. Deciding how you’ll make money—whether through a product, a service or both—is just the beginning.

Some key questions to ask:

Who is your customer?

Viable business ideas start with understanding your target market. To identify your ideal customer, explore:

• Conducting a competitive market analysis of other businesses
• Analyzing marketplaces where similar products or services are sold (like Amazon or Wayfair)
• Surveying potential customers
• Researching industry trends

What’s your path to profitability?

Profitability is key to business survival. You’ll need to consider:

• The best pricing strategies
• How products or services will be offered (bundled or separate)
• Whether the business will be direct-to-consumer or business-to-business
• The most effective business model
• Customer demand for your products or services
• Your break-even point—the minimum revenue needed to cover costs

2. Name your business

Before you can kick off your business in North Carolina, you need to pick a memorable name. A great name effectively communicates your business’s purpose and mission. 

When naming your business, consider:

Is the name unique in North Carolina?

The business name must be original. The North Carolina Secretary of State offers a helpful search tool to check name availability.

Is the domain name available?

Uniqueness matters when building your website. Check whether a domain name aligns with your desired business name and brand identity. Ideally, you’ll want [YourBusinessName].com, but alternative domains might work.

Are the required business identifiers attached?

Business in North Carolina require certain identifiers to signify their type:

• Limited liability companies must contain “limited liability company” or its abbreviation (LLC or L.L.C.)
• Corporations must include “corporation,” “company,” “incorporated,” “limited,” or their abbreviations 
• Avoid words that could confuse your business with government agencies, like the Federal Bureau of Investigations (FBI) or Internal Revenue Service (IRS). 
• Special approval may be needed for certain words like “bank” or “pharmacy”

Pro tip: Use the free Shopify name generator to find a unique name and grab a domain in seconds. 

Using a DBA in North Carolina

To set up a “doing business as” (DBA) in North Carolina: 

• File your assumed name with the Register of Deeds in your county
• Ensure your DBA is unique from other business names in the state

Sole proprietorships must typically operate under the owner’s surname. If you want to use a different name, you’ll need to file a DBA. The same applies to partnerships.

You can search for existing businesse names through the North Carolina Secretary of State’s office.

3. Create a business plan

A solid business plan is your roadmap to success. It’s more than just paperwork—it’s a strategic tool that guides your business forward. 

An effective business plan typically includes:

• Executive summary
• Detailed company description 
• Thorough market analysis
• Organizational and management structure
• List of products and/or services
• Customer segmentation report
• Marketing, operations, and financial plan

Feeling overwhelmed? Don’t worry. A free business plan template can be a great starting point. You can always customize it to fit the unique needs of your business venture.

4. Choose a business structure

Selecting the right business structure is crucial. It impacts everything from taxes to personal liability. 

Let’s break down your options: 

• Sole proprietorships are the simplest business structure to set up. Owned and run by a single individual, profits are taxed once at the owner’s personal income level.
• Partnerships are formed by two or more owners, and can be limited or general partnerships. Like sole proprietorships, partnerships are taxed at the owners’ personal income tax levels. There’s typically no legal distinction between owners and the company.
• Corporations, or C corps, are legally separate from ownership. This protects owners’ personal assets if the company fails or faces a lawsuit—but this additional protection brings a more complex structure with additional legal requirements.
• Limited liability corporations (LLCs) blend the benefits of partnerships and corporations. While similar to partnerships in ownership structure (one or more owners or “members”), LLCs enjoy the liability protection typically applied to corporations. In North Carolina, taxes for LLCs are handled at your personal income level. 

Tax considerations

• LLCs: No separate corporate tax return
• Corporations: must file CD-405, taxed at 2.5%
• Sole proprietorships and Partnerships: pay 15.3% self-employment taxes
• Additional taxes may include sales tax, use, employee withholding, and equipment taxes

Incorporating in North Carolina

To formally launch your business, you’ll need to file articles of organization with the North Carolina Secretary of State. Be prepared to provide:

• Business name with correct identifiers
• Registered agent’s name and address
• Contact information for the person filing the documents

The filing fee is $125. Take your time to research and choose the structure that best protects your interests and supports your business goals.

5. Get an employer identification number

After deciding on your business type, it’s time to get your employer identification number (EIN). Think of it as a Social Security number for your business. You can apply for an EIN through the IRS website.

An EIN is a nine-digit number that helps you:

• File taxes at federal and state levels
• Secure lines of credit
• Open business bank accounts and obtain credit cards
• Establish your business’s official tax identity

North Carolina state tax authorities will use this number to track your business. It’s an essential step in setting up your official business infrastructure.

6. Obtain business licensing and permits

Every business in North Carolina needs the right business licenses to operate legally. The specific licenses depend on your industry, so there’s no one-size-fits-all approach. 

Your best resource is the state’s directory of occupational boards. They can guide you through the specific licensing requirements for your business. Each industry has its own set of rules, so take the time to research thoroughly.

Pro tip: Don’t wait until the last minute to secure your licenses. Start the process early to avoid any potential delays in launching your business.

7. Examine insurance options

Starting any business comes with risks. The right insurance can protect you from unexpected financial challenges that could derail your journey. While some business structures like corporations and LLCs offer personal asset protection, additional insurance is critical.

If you’re planning to hire employees in North Carolina, you’ll need workers’ compensation insurance. The Small Business Administration recommends several types of business insurance:

• Workers’ compensation insurance: Offers wage replacement and medical benefits for work-related injuries
• General liability insurance: Covers financial losses from property damage, and helps protect against job-related injuries
• Product liability insurance: Shields you from financial losses related to product defects
• Professional liability insurance: Protects against malpractice suits in specialized fields like law, accounting or medicine
• Business owner’s insurance: Bundles typical coverage options for small businesses in one package
• Unemployment insurance: Protects your company from financial liability if an employee files for unemployment benefits

8. Understand financial considerations

Starting a business involves more than just a great idea—it requires careful financial planning. You’ll likely need to invest in:

• Retail space or office rent
• Professional website design
• Advertising
• Business equipment and software
• Professional services like lawyers and accountants

Finding startup funding can help cover these initial expenses. Options like business loans can assist with:

• Marketing costs
• Inventory purchases 
• Payroll expenses 

9. Market your business

A solid marketing plan is your roadmap to success. Key elements include:

• Market research: Thorough market research is the key to better understanding your target customers and identifying valuable market opportunities.
• Advertising and promotion: Spread the word about your products or services through targeted advertising campaigns. You can do this yourself or hire a marketing agency.
• Social media presence: Build profiles on multiple platforms, including Facebook, Instagram, and YouTube. Consistently publish brand-aligned content to build an engaged customer base.
• Public relations: Cultivate media relationships within North Carolina and nationally to increase visibility.
• Customer relationships: Build genuine connections with customers that encourage customer loyalty and turn customers into brand advocates. 

10. Set up a business bank account

Setting up a business bank account is essential for separating personal and business finances and simplifying tax filing. 

Look for banks or credit unions that offer business-friendly services, then gather required documentation, including your EIN and business registration details. Complete the application, make an initial deposit per the bank’s minimum deposit requirements, and set up online banking. Order checks and debit cards to simplify your business transactions.

Pro tip: Accurate financial records are the foundation of a successful business. Take time to set up your banking systems carefully—time spent now will pay off in the long run.

Start a business in North Carolina FAQ

How much does it cost to start a small business in North Carolina?

The cost of starting a business in North Carolina varies depending on industry and structure. For an LLC, the state filing fee is $125. Additional expenses include permits, business licenses, insurance, equipment, and marketing. Expect initial costs ranging from a few hundred to several thousand dollars, plus ongoing expenses like taxes and operations.

How much is an LLC in NC?

Registering an LLC in North Carolina costs $125. This is the required filing fee to establish your LLC.

Can you operate a business in NC without a license?

Not all businesses require a general license, but many industries—like construction, health care, and food services—do. Local governments may also require permits. Check with the North Carolina Department of Revenue and local authorities to confirm what applies to your business.

What are the requirements to start a small business?

To start a small business in North Carolina, follow these steps:

1. Choose a business structure (e.g., LLC, sole proprietorship).
2. Register with the NC Secretary of State if needed.
3. Get an EIN from the IRS.
4. Apply for required licenses and permits.
5. Register for state/local taxes.
6. Comply with employment laws if hiring staff.

Can I file taxes without a business license?

Yes, you can file taxes without a business license, but you still must:

• Report business income to the IRS.
• Report income to the NC Department of Revenue.
• Use the correct tax forms (e.g., Schedule C for sole proprietors).

Warning: If your business requires a specific license to operate legally, failing to obtain one can result in penalties or fines. Always verify your specific industry requirements.

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