With its beautiful beaches and massive farmlands, it’s understandable why California has been a hotspot for just about any business. In fact, the Golden State has the highest number of small businesses in the US, with 4.1 million small businesses fuelling the state’s economy. If you’re an aspiring entrepreneur looking to have a slice of The Golden State’s ever-booming business landscape, here are some things you need to know before you start your new venture in California.
Culture is thriving
One thing that sets California apart is its high regard for culture and the arts. From entertainment hubs as grand as Hollywood to areas like the NoHo Arts District, which houses theatres, dance studios, and recording studios — there’s no shortage of creativity in the state.
This has proven fruitful for many businesses, because this love of culture has opened up opportunities for more experimentation. Together with famous fast food chains, you’ll find dainty offbeat restaurants serving delicacies from various cultures; along with big names, you can also find local clothing brands that innovate and help set trends in fashion. Opening your business in the state means having an open-minded audience and having the freedom to be as original as you want to be with your ideas.
It leads in innovation
Just last year, California was named the top state in the US for innovation based on six categories: research and development intensity, productivity, clusters of companies in technology, STEM jobs, residents with degrees in science and engineering disciplines, and patent activity.
This fact is due largely to California being home to Silicon Valley, the long-time center for innovation. The presence of large tech companies in the state, such as Google, Apple, and Facebook, has strongly bolstered the economy and provided numerous business opportunities in tech and development for entrepreneurs to take advantage of.
Taxes may be a challenge
California’s general reputation when it comes to taxes may be intimidating to many. It’s understandable, though, with the state individual income tax rate at a high 13.3% for the top bracket. For California entrepreneurs with LLCs, this is in addition to an $800 annual franchise tax on the business itself. Required for all LLCs regardless of income or age, this amount is due four and a half months after you officially register your business with the state, and then on or before April 15 for every year after.
This may seem a lot for entrepreneurs who are just starting out, but there’s a lot of support for businesses in the state. The NoHo Business Improvement District has compiled a list of support and resources for financing startups and small businesses.
There’s a deep talent pool
The Golden State is known for its many prestigious universities, such as Stanford University and CalTech, whose impressive alumni have gone on to start the likes of Google and Hewlett-Packard. Not only do these universities produce very employable graduates, the sheer number of companies put up by these individuals have in turn attracted a diverse and versatile pool of talent into the state. Therefore, choosing to open a new venture in California, means you will have access to this talent, which could be crucial in the success and longevity of your business.
Starting a new business in the US requires a well-developed business plan, which asks you to consider many factors like your business objectives, how you’ll position yourself in the market, and of course, the costs that are needed to establish your startup. While the state is not the cheapest to open your new venture in, few places come close to the vibrancy of California. Its roots in arts and culture, constant innovation and technology, and its talent pool make it a great place to start a business. Along with a supportive community, it is truly worth considering California among your array of options.