Pick your business location
Your business location determines the taxes, zoning laws, and regulations your business will be subject to. You’ll need to make a strategic decision about which state, city, and neighborhood you choose to start your business in.
Research the best place to locate your business
Where you locate your business depends in part on the location of your target market, business partners, and your personal preferences. In addition, you should consider the costs, benefits, and restrictions of different government agencies.
Region-specific business expenses
When you calculate your startup costs, take into account the way different expenses might cost more or less depending on your location.
Local zoning ordinances
If you buy, rent, build, or plan to work out of a physical property for your business, make sure it conforms to local zoning requirements.
Neighborhoods are generally zoned for either commercial or residential use. Zoning ordinances can restrict or entirely ban specific kinds of businesses from operating in an area.
You might have fewer zoning restrictions if you base your business out of your home, but zoning ordinances can still apply even to home-based businesses.
Zoning laws are typically controlled at the local level, so check with your department of city planning, or similar office, to find out about the zoning laws in your area.
Location, location, location
John and Kelly looked at what they needed in a business location and found the best spot to open their auto repair shop.
State and local taxes
Consider the tax landscape for the state, county, and city. Income tax, sales tax, property tax, and corporate taxes can vary significantly from place to place.
In fact, some states are well-known for creating tax environments that are very friendly to certain kinds of companies. That’s part of the reason why tech startups, financial institutions, and manufacturing tend to concentrate in certain areas of the country.
Visit state and local government websites to find out what the tax landscape for your area looks like.
State and local government incentives
Some state and local governments offer special tax credits for small businesses. You might also find state-specific small business loans or other financial incentives.
Incentive programs and benefits are often related to job creation, energy efficiency, urban redevelopment, and technology.
Federal government incentives
The federal government offers benefits to small businesses that contract with the government and are based in underutilized areas. Check into the Historically Underutilized Business Zones (HUBZone) program to see if you qualify for preferential access to federal procurement opportunities.
The federal government’s goal is to award at least three percent of all federal contracting dollars to HUBZone-certified small businesses each year.
- Program benefits
- HUBZone program qualifications
- Get certified as a HUBZone business
- Maintain HUBZone certification
The government limits competition for certain contracts to businesses in historically underutilized business zones. It also gives preferential consideration to those businesses in full and open competition.
Joining the HUBZone program makes your business eligible to compete for the program’s set-aside contracts. HUBZone-certified businesses also get a 10 percent price evaluation preference in full and open contract competitions.
HUBZone-certified businesses can still compete for contract awards under other socio-economic programs they qualify for.
HUBZone program qualifications
To qualify for the HUBZone program, your business must:
- Be a small business
- Be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe
- Have its principal office located in a HUBZone
- Have at least 35 percent of its employees live in a HUBZone
You can find the full qualification criteria in Title 13 Part 126 Subpart B of the Code of Federal Regulations (CFR). You can also get a preliminary assessment of whether you qualify at the SBA’s Certify website.