Starting a Business in Virginia
A new business in Virginia is not out of reach. So have you been wondering: how do I start a business in Virginia? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Virginia during a recession?
New Business in Virginia: Pros and Cons
Business Insider puts Virginia in the Number 9 position of the best states to start a business, according to a 2016 article. And this is for the whole country. There are potential employees with high education levels. Also, the state has a better than average opportunity share of new business owners. There is also an impressive business survival rate. It means almost double the number of companies start versus those that close.
Decent Upswing
In a 2018 article, though, Forbes put Virginia at number four. This state ranked the best for quality of life and regulatory environment. Virginia also scored well when it came to labor supply. Keep in mind, Forbes and Business Insider are using different methodology.
New Business in Virginia: Initiatives
Virginia is very strong in the high tech sector. It ranks at the very top in terms of the high tech share of all businesses. Also, Virginia is actively investing in programs to further develop its high tech industries.
At the same time, it is also investing in numerous programs specifically aimed at developing small businesses. The state is offering a variety of innovative incentives for prospective small business owners to startup there. It is a good time to start a small Virginia business.
Start a New Business in Virginia – Virginia Top Industries
Per the Prince William County Public Schools, the biggest industries in Virginia are IT and cybersecurity, and also food processing; automotive. More top Virginia industries are life sciences, aerospace, energy, and also data centers. Yet more Virginia top industries are plastics and advanced materials, and also distribution. Another top Virginia industry is corporate HQ, because Capital One and Motley Fool are headquartered there, among other companies.
Start a New Business in Virginia – Virginia Business Ideas
Smart business owners can find new opportunities. Work with bigger industries in the state. Offer goods or services such as computer support in areas like data and also programming. Another business idea is trucking for any industry. Other business ideas are food service, and also the development and distribution of safety equipment.
Here is how to start a new business in Virginia.
Start a New Business in Virginia – Virginia New Business Secretary of State Requirements
Register a Business Name
Register a business name on the official Commonwealth of Virginia website.
Corporations
Virginia corporations must have unique names. Search online records and other records to see if a name is already in use. There is a database of registered Virginia corporations available for search at the official Virginia government website.
Corporate Name Reservations
You do not need to have a corporate name reservation before you file to incorporate a small business. But if a business owner wants to reserve a corporate name before the time that they can file to incorporate, they should submit a name reservation application to the office of the Virginia Secretary of State.
Download the form at Reserve a Virginia Corporation Name at the official Virginia government website. Then the fee is $10.00 to reserve a name for a period of 120 days. Also check out Virginia Business One Stop at: Virginia Corporation Set Up on the state’s official government website.
Business Permits and Licenses
The Official Site of the Commonwealth of Virginia has data on which businesses need licenses. This includes how to apply for them.
Local Permits and Licenses
Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.
For example, in Newport News, go to the Business License Tax page on the city of Newport News website.
Start a New Business in Virginia – Business Registration
The State of Virginia offers a Business One Stop. There is also information on the website for the Virginia State Corporation Commission.
Tax Registration
Make sure to visit the Virginia Department of Taxation.
Start a New Business in Virginia – Virtual Offices
Alliance Virtual Offices offers Virginia virtual business office space in the following cities:
Alliance has office space in Virginia Beach in Eastern Virginia, and in Newport News and Richmond. And they also have space in the DC Beltway Area, Alexandria, Arlington, Fairfax, Glen Allen, Herndon, McLean, and Norfolk.
Go to DaVinci for Leesburg in Northern Virginia. In Eastern Virginia, they have offices in Norfolk, Virginia Beach, and also Richmond. In the DC Beltway Area, DaVinci has office space in Alexandria, Springfield, Sterling, and also Vienna.
For Blacksburg, Charlottesville, and Roanoke, and in other parts of the state, you may be able to try Regus. Or connect with local business owners. Also ask computer user groups for help in this area.
Other options may be virtual business office space in nearby states. These are Kentucky, Maryland, North Carolina, Tennessee, and also West Virginia.
Start a New Business in Virginia – Build Business Credit
Company credit is credit in a business’s name. It doesn’t link to an owner’s individual credit, not even if the owner is a sole proprietor and the sole employee of the company.
As a result, a business owner’s business and personal credit scores can be very different.
The Benefits
Given that business credit is separate from individual, it helps to protect a small business owner’s personal assets, in the event of court action or business bankruptcy.
Also, with two separate credit scores, a small business owner can get two separate cards from the same vendor. This effectively doubles purchasing power.
Another advantage is that even start-ups can do this. Visiting a bank for a business loan can be a formula for disappointment. But building business credit, when done right, is a plan for success.
Consumer credit scores depend on payments but also various other factors like credit use percentages.
But for company credit, the scores really just hinge on if a business pays its bills on time.
The Process
Growing business credit is a process, and it does not happen without effort. A business will need to actively work to build company credit.
Nevertheless, it can be done easily and quickly, and it is much more efficient than building individual credit scores.
Merchants are a big part of this process.
Performing the steps out of order will lead to repetitive denials. Nobody can start at the top with business credit.
Start a New Business in Vermont – Small Business Fundability™
A business has to be Fundable to credit issuers and vendors.
For this reason, a business will need a professional-looking website and email address. And it needs to have site hosting from a merchant such as GoDaddy.
Additionally, company telephone numbers ought to have a listing on ListYourself.net.
Also, the company telephone number should be toll-free (800 exchange or similar).
A business will also need a bank account devoted solely to it, and it needs to have every one of the licenses necessary for operating.
Working with the IRS
Visit the Internal Revenue Service web site and get an EIN for the company. They’re free. Choose a business entity such as corporation, LLC, etc.
A business can get started as a sole proprietor. But they should change to a kind of corporation or an LLC.
This is in order to limit risk. And it will optimize tax benefits.
A business entity will matter when it comes to tax obligations and liability in the event of a lawsuit. A sole proprietorship means the owner is it when it comes to liability and tax obligations. Nobody else is responsible.
Starting the Business Credit Reporting Process
Start at the D&B website and get a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.
By doing this, Experian and Equifax will have activity to report on.
Vendor Credit
First, you must build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start to get more credit.
These varieties of accounts tend to be for the things bought all the time, like marketing materials, shipping boxes, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are normally Net 30, versus revolving.
So, if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term. Such as within 30 days on a Net 30 account.
Details 
Net 30 accounts have to be paid in full within 30 days. 60 accounts need to be paid completely within 60 days. Unlike with revolving accounts, you have a set time. So this is when you have to pay back what you borrowed or the credit you used.
To kick off your business credit profile properly, you should get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, you can then make use of the credit.
Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Vendor Credit – It Makes Sense
Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with minimal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
You want 3 of these to move onto the next step.
Monitor Your Business Credit
Know what is happening with your credit. Make certain it is being reported and address any inaccuracies as soon as possible. Get in the practice of checking credit reports and digging into the details, and not just the scores.
We can help you monitor business credit at Experian, Equifax, and D&B for 90% less.
Update Your Record
Update the data if there are errors or the details is incomplete.
Fix Your Business Credit
So, what’s all this monitoring for? It’s to challenge any errors in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs often want you to dispute in a particular way.
Disputes
Disputing credit report inaccuracies normally means you specifically spell out any charges you challenge.
A Word about Business Credit Building
Always use credit sensibly! Don’t borrow more than what you can pay off. Monitor balances and deadlines for payments. Paying on time and fully will do more to raise business credit scores than just about anything else.
Building small business credit pays. Great business credit scores help a business get loans. Your lender knows the small business can pay its financial obligations. They recognize the company is authentic.
The business’s EIN links to high scores and loan providers won’t feel the need to ask for a personal guarantee.
Business credit is an asset which can help your small business for many years to come.
Learn more here and get started toward opening a new business in Virginia.
Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.
Virginia’s Response to COVID-19
On March 12, Governor Ralph Northam declared a state of emergency. Regional workforce teams will be activated to support employers that slow or cease operations. Employers who do slow or cease operations will not be financially penalized for an increase in workers requesting unemployment benefits.
The Governor is authorizing rapid response funding, through the Workforce Innovation and Opportunity Act. This is for employers eligible to remain open during this emergency. Funds may be used to clean facilities and support emergency needs.
