How to Start a Business in Oregon in 11 Easy Steps

If you’re an entrepreneur in Oregon looking to start your next business, now is the perfect time to begin. The Beaver State is kind of a mixed bag when it comes to business friendliness, but overall, it offers some spectacular opportunities for the right ideas and founders. For example, the state doesn’t require a general business license, nor does it impose a sales tax, making it easier for startups to get off the ground. Similarly, Oregon has a wide range of climates and regions, from big metro areas to rugged coastal communities, allowing for unique businesses to thrive.

For those who are ready to make the leap and start a new business in Oregon and don’t know how, this article can act as a guideline. We’ve compiled 11 steps to transform your idea into a reality, so if you follow each step, you’ll be on the path to success in no time. Here is everything you need to know about how to start a business in Oregon.

1. Fine-Tune Your Business Idea
2. Create a Business Plan
3. Choose a Business Name
4. Choose a Business Structure
5. Set Up Banking, Credit Cards, and Accounting
6. Get Funding for Your Oregon Business
7. Get Insurance
8. Obtain Business Permits and Licenses
9. Find Your Team
10. Market and Grow Your Business
11. Open the Doors!

1. Fine-tune your business idea

Sometimes, you might be itching to start a business because you already have a great idea. In other cases, you might be looking for inspiration. If you’re starting a new company in Oregon, it’s best to rely on an idea that has the best chance of success based on the current economic climate. With that in mind, here are a few broad ideas to get you on the right path:

• Food and Beverage – Cities like Portland are foodie havens, and even smaller towns like Bend and McMinnville are starting to attract more restaurateurs. Portland also has a large population of food carts, which are more flexible and affordable than opening a full restaurant.
• Tourism – Because of Oregon’s diverse landscape, you can take advantage and offer tours of up-and-coming areas, such as the Oregon coast or the Umpqua National Forest.
• Outdoor Recreation – Both residents and visitors alike love to explore Oregon’s wilderness. You can start a business by selling or renting outdoor gear, or even providing training for specialized activities like rock climbing.
• Healthcare – Oregon has a thriving healthcare industry, and there’s a growing need for clinics and specialized medicine in the state.
• Retail – Because Oregon doesn’t collect sales tax, it offers a unique opportunity for retailers compared to other states.

2. Create a business plan

Once you have your idea ready, it’s time to flesh it out with a comprehensive business plan. This plan should outline everything related to how you will start and run your new venture. Not only can drafting a business plan help you focus your attention on what matters, but it’s an essential document for securing funding or investors, as they’ll need to see what you’re going to do with their money.

Some core components of a business plan include:

Market research

This step is crucial because it tells you what your potential market share could be, both when starting and growing your business. Ideally, you’ll have an idea that has massive, untapped market potential and limited competition. A competitor report and analysis is another critical part of this segment.

Financial plan

How will you fund your business, and how profitable will your company be in the first five years? With this section, you may have to work with an accountant or financial analyst to come up with accurate projections. Again, this is what investors or lenders will pay attention to before giving you money to start your company.

Marketing plan

No business can thrive without marketing and advertising. Your business plan should outline your core marketing strategies, including campaign ideas and costs. While these may change as you get off the ground, it’s imperative to have a clear understanding of how you will promote your products or services before opening the doors.

Choose a location

As we mentioned, part of Oregon’s appeal to small businesses is its wide range of cities and landscapes. For example, if you’re starting a retail business, you can move into a dense population center like Portland or Salem. Alternatively, if you need wide open spaces, you can start a business in Medford or Redmond.

In fact, Bend and Redmond have been ranked as two of the top 10 cities for small businesses, according to WalletHub. These spots are growing quickly and have a lot of potential, especially compared to cities like Portland that can feel a bit oversaturated, depending on the business model.

When choosing a location for your business, you must consider elements like:

• Operational Costs – What is the cost of utilities, rentals, and equipment?
• Potential Customer Base – What are the demographics of your city, and are they trending upward or downward in your favor?
• Licensing and Permitting – As we’ll discuss later, some cities may require more permits and have more regulations than others, making it more challenging to get your business off the ground.
• Zoning – Oregon has strict zoning laws, which have helped preserve much of its natural beauty. As a new startup, you have to abide by these rules, which may require creative solutions.

Determine if you’re an online-only business

In the modern era, starting a new business doesn’t mean you have to open a brick-and-mortar location. Online-only companies are much more common, and starting one in Oregon is as easy as registering with the Secretary of State (in most cases). However, Oregon also has multiple E-commerce zones. These zones make it easier for online startups to launch with generous tax incentives. So, although you may only exist online, you may want to base your business address in one of these zones to take advantage.

Generally speaking, all you need to start an online-only business is:

• A website
• Social media profiles
• An email account

If you’re selling physical products, you’ll also need to determine how you’ll manage orders and fulfillment. For example, you may need to rent warehouse space to manage inventory and have an office to handle shipments and returns. Alternatively, it might be easier to work with a third-party supplier or vendor.

Another point to consider is whether you’ll start your business online and then move into a physical location later on. This way, you can build buzz and an audience, ensuring that your brick-and-mortar storefront will have the best chance of success.

3. Choose your business name

As the first impression people will have of your business, choosing the right name matters. However, while this part may seem pretty straightforward, it comes with a few hurdles.

For example, you want your name to be memorable and unique, but not so much that it feels restrictive, especially if you plan to grow and branch out in the future. Similarly, your company name should reflect a particular persona, such as authoritative, professional, whimsical, or family-oriented. Overall, it’s best to workshop your name and solicit feedback from others before committing to anything.

As with any other state, Oregon requires new businesses to have a unique name that is not identical to one already in use within the state. So, before working on anything like marketing materials or building a website, it’s best to perform an Oregon business entity search to check your business name with the Secretary of State and see if it’s already been taken or not.

Another point to consider is that your official business name may be different from your “doing business as” (DBA) name. For example, you may have a generic name for the company, but a more unique DBA Oregon that helps attract customers.

4. Choose a business structure

The structure of your business can have significant implications regarding how you operate and how you can grow and expand in the future. For example, forming a sole proprietorship might be the easiest option right now, but it doesn’t allow you to hire employees or separate business expenses, so you’ll need to change your company structure later on.

The other part of picking the right structure is that it can affect how your company will be taxed. Here’s a quick overview of the four common structure types and how they can impact taxation.

Common Business Structures and Their Tax Advantages

• Sole Proprietorship – In this case, you are the sole owner and employee of the business, so there’s no separation between you and your company. While you don’t have to register a sole proprietorship with the state, you don’t get any tax advantages, as all profits and liabilities are tied to you and your social security number.
• Partnership – In a partnership, you are forming a business with one or more partners. To that end, you’ll need to draft a partnership agreement that outlines everyone’s roles and responsibilities, including financial investment and equity stakes. Like a sole proprietorship, income and debts are the responsibilities of each partner. You can form a limited partnership to help separate the company from the founders, though.
• Limited Liability Company (LLC) – Most entrepreneurs prefer starting an LLC because it’s quick, convenient, and highly flexible. Also, as the name implies, you can limit your liabilities and debts by separating the company from yourself. To form an Oregon LLC, you’ll need to create an operating agreement that outlines how the business is structured and who is involved. You can also form a single-member LLC. This option is great because it offers pass-through taxation, meaning your profits aren’t taxed twice.
• Corporation – Legally speaking, corporations have rights like people, meaning they are a completely separate entity. However, forming a corporation is more challenging because of its rigid structure, including positions like CEO, CFO, and President. Also, if you form a C-Corporation, profits are taxed before they’re distributed, so you’ll get taxed twice on earnings. S-Corporations allow for pass-through income, though, to help alleviate your tax burden.

Outside of a sole proprietorship, you must register your business with the Oregon Secretary of State. Doing so involves specific paperwork and filing fees. You can look up these fees and requirements through the Business Registry Fee Schedule and submit paperwork and payments through the online Business Portal.

5. Set up banking, credit cards, and accounting

Before you can start selling products or services and earning revenue, you must have a business bank account. While you can use a personal account at first, it’s always best to separate your business finances as much as possible. Not only can this help make it easier to determine your tax burden, but it can help to limit your liabilities and debts even further.

One unique consideration for Oregon companies that have physical locations is that the state requires them to accept cash in most situations. While the idea of a “cashless” business has become more popular in recent years, it’s not feasible in Oregon, with a few exceptions (like running an online-only business). So, if you’re opening a storefront, you must have a means of exchanging, handling, and depositing cash, which often means opening a merchant bank account.

In most cases, it also makes sense to open a business credit card to pay for larger purchases or to cover any budget shortfalls. Many creditors offer lower interest rates on business cards, so if you can pay the balance quickly, you won’t have to pay as much toward interest. That said, it’s imperative to avoid overextending yourself with debt, as that can affect your cash flow and profit margin.

Finally, as you set up your banking and credit cards, it’s always smart to hire an accountant. An accountant can help ensure you’re managing your books correctly, as well as verifying compliance with state laws and tax rules. That said, you may be able to handle day-to-day accounting and then rely on a professional for consultation or tax preparation.

6. Get funding for your Oregon business

Part of what makes Oregon such a business-friendly state is that it offers a wide variety of funding options, from traditional loans to grants. Generally speaking, grants for small businesses in Oregon are the better choice because they don’t have to be repaid, but you must adhere to strict qualification requirements and submit an application. Also, because all businesses want grant money, the competition for these funds can be fierce.

The best resource for state and county-level funding opportunities is Business Oregon. This site allows you to browse all of the grant and loan options available, and you can sort through each one based on how it relates to your industry or business model. In addition to loans, Business Oregon can also connect you with loan guarantee programs. These programs help you secure traditional funding if you’re deemed as too much of a risk by a lender.

As we discussed briefly above, Oregon also offers business incentives, typically in the form of tax breaks and rebates. For example, operating an online-only business in a designated E-commerce zone allows you to reduce your tax burden by deducting equipment and operational expenses. The state has over 70 Enterprise Zones, so chances are your business will be located in one of them. Additionally, there are state-level funds, like the Small Business Sustainability Fund, designed to spur economic development in target industries and underserved communities.

If you can’t get state-level funding or grant money for your business, the next best option is to secure a small business loan from a traditional lender, like a bank. As we mentioned, Oregon has several loan guarantee programs, or you can work with the Small Business Administration to secure more funding as needed.

7. Get insurance

In Oregon, as with most states, all businesses are required to obtain workers’ compensation insurance and commercial auto insurance. Oregon is a bit stricter than other states, though, as it requires workers’ compensation coverage even if you only have one employee, which may be yourself. That said, if you’re operating as a sole proprietorship, you can be exempt from this rule.

As for commercial auto insurance, the minimum requirements are $25,000 for bodily injury, $50,000 per accident for bodily injury, and $20,000 for property damage. You must also have uninsured motorist and personal injury protection coverage if you’re operating passenger vehicles, such as a shuttle bus.

Although Oregon only requires two types of insurance, there are many others that can benefit your business in the event of a disaster. Some common coverage options worth buying can include:

• General Liability Insurance – This policy covers your business in the event of potential lawsuits or medical payments as a result of an accident or injury on the premises. This way, you don’t have to pay out of pocket if someone sues.
• Property Damage Insurance – If you own or rent a physical building or manage inventory, property damage insurance makes sense. This way, if a disaster strikes or a fire breaks out, you can get compensated for damages. This coverage can also cover thefts and vandalism.
• Errors & Omissions (E&O) Insurance – If you’re offering professional services, such as accounting or marketing, E&O insurance can protect you from lawsuits resulting from errors or mistakes on your part.
• Cyberattack Insurance – Cyberattacks can cripple your business and put your customers’ data at risk. Without this insurance, you may be held liable for these attacks and have to absorb any lost business.

8. Obtain permits and licenses

Another advantage of doing business in The Beaver State is that it doesn’t require a general Oregon business license to operate. That said, some cities within the state, such as Oregon City, Medford, and Lake Oswego, do require companies to obtain a license to operate within the city limits. So, before launching your new enterprise, make sure to check your city and county’s regulations to ensure compliance.

Many industries also require licensing and permitting in Oregon. Some common examples include:

• Food Service Permit – Whether you’re running a restaurant, a food cart, or a pop-up stand, you’ll need a license from the Oregon Health Authority to operate.
• Alcohol Sales Permit – Oregon has strict rules regarding who can sell alcohol and where, so you’ll need to obtain a permit before selling beer, wine, and spirits. You’ll also have to apply for permits if you’re selling alcohol at an event or temporary location.
• Contractor License – Contractors must be licensed and bonded before they can work on various projects, including electrical, HVAC, and home remodeling.
• Accounting License – Being an accountant means getting licensed by the state, but the process varies based on which type of accountant you are.
• Cannabis – Cannabis is legal for recreational use in Oregon, but the sale and distribution of it are tightly controlled and require various permits.

The state of Oregon has a fantastic licensing lookup tool that can provide information on all the permits or licenses you may require. Simply type in a keyword related to your business, and it will populate with all the various paperwork related to that keyword.

Federal and Oregon taxes

Because Oregon doesn’t collect sales tax, you don’t need to obtain a sales tax permit or license before starting your business. However, Oregon does impose other taxes, such as income tax, a corporate excise tax, and property taxes for commercial buildings. Some cities may also impose their own taxes. For example, Portland imposes a business license tax and a metro supportive housing services tax on all businesses within the city.

Overall, it’s best to utilize the services of an accountant or tax professional to ensure you’re always compliant and paying the correct amount of taxes every year. Not only do you have to pay state income and property taxes, but you must also pay federal taxes. As we mentioned, the type of business entity you choose can affect how you’re taxed, which is why it’s imperative to make the right choice for yourself and your company.

9. Find your team

No matter how talented or passionate you are about your business, you’ll need employees to make it run as smoothly as possible. It’s best to focus on hiring as an investment in raw talent that can help your company thrive. In many cases, hiring high-quality workers can save money and generate more revenue because they add value to your business. Conversely, having high turnover rates and low-quality employees can become a liability, especially if you’re running a customer or client-facing operation.

Comply with Oregon payroll regulations

When forming your Oregon business, you’ll receive a business identification number (BIN), which the state uses for tax purposes. It’s your responsibility to withhold payroll taxes for all employees and submit them to the Department of Revenue. Fortunately, Oregon also provides quarterly payroll training for employers, where you can learn more about how to withhold and submit these taxes, as well as the differences between employees and independent contractors.

Hire contractors

Employees are financially dependent on a business and must conduct themselves according to company standards and best practices. Employees also receive benefits, such as unemployment insurance, workers’ compensation, and tax withholding.

Contractors, however, are independent workers who can work for different companies and are responsible for how they conduct themselves. So, one easy way to tell if you’re hiring contractors or employees is whether they must adhere to specific guidelines or standards. If you control what they do and how they do it, they need to be an employee. If they have full autonomy regarding how they get the job done, they’re a contractor.

Some businesses are better suited for contractor work than others. For example, running a storefront means you need full-time employees to stock shelves, manage inventory, and help customers. Alternatively, if you run temporary events, you may need to hire temporary contractors based on demand.

10. Market and grow your business

All successful brands invest heavily in marketing, as it’s the best way to capture attention and drive traffic to your storefront or website (or both). Ideally, you can start marketing your business before you open the doors, as this will help validate your idea and create buzz, ensuring a successful launch.

To help you get started, here are some core marketing ideas to try:

Create a mailing list

Email marketing is still a viable option for driving sales and building an audience. The first step is creating a sign-up offer, which can be as simple as a coupon or the promise of useful information. For example, you can create a helpful newsletter for your customers or clients so they start looking to you for insights and offers.

Special offers for first customers

One way to ensure a successful grand opening is to offer discounts and deals for the first customers who buy your products or services. These can be deep discounts for the first 100 customers, a free gift, or something similar. Ideally, the offer will be so enticing that it will generate huge buzz for opening day.

Collaborate with local brands

Depending on where you’re opening your business, you can work with other local companies to build excitement and anticipation for your launch. For example, you can host a grand opening event and invite local artists, food vendors, and entertainers. Alternatively, you can create long-lasting relationships with complementary brands that offer reciprocal benefits. For example, you can partner with other startups to add value to your client services, thus promoting those other companies in the process.

Invest in word-of-mouth advertising

Sometimes, the strongest marketing is that which comes from a trusted recommendation, such as a friend, family member, or co-worker. As a business, word-of-mouth advertising can drive traffic and deliver better results than a slick digital marketing campaign.

But how do you invest in this type of promotion? By incentivizing your best customers to refer and recommend your business. For example, you may offer discounts or rewards for each referral. This way, even new customers are more inclined to spread the word.

Solicit reviews

Just as you can incentivize your customers to recommend your business to others, you can also ask them to leave a review. In many cases, online reviews are just as valuable as word-of-mouth advertising. While you can’t solicit positive reviews, you can offer special perks or rewards to customers who leave reviews on sites like Google, Yelp, and Thumbtack.

Create helpful content

Content marketing, also known as inbound marketing, is when you produce content that drives traffic to your website or helps build your mailing list. The type of content you make will depend on your business, but you can often take advantage of trending topics to build a larger online audience.

Also, consider different media, such as blog posts, infographics, whitepapers, and video content, as they can help expand your brand recognition and drive more traffic.

11. Open the doors!

Now that you have everything ready, it’s time to finally launch your business. If you’re opening a physical storefront, you can consider the difference between a soft opening and a grand opening. A soft opening is when the doors are open, allowing you to smooth out any operational challenges or difficulties before the main event. A grand opening is when you make a big deal about launching your business, typically coinciding with a temporary event or celebration.

Tips for a successful launch event

In many cases, your grand opening can offer insight into how quickly your business will succeed. So, here are some ways to ensure it is as successful as possible:

• Build Buzz Beforehand – Promote the event as much as you can, highlighting any special deals or perks that customers might expect.
• Offer Grand Opening Deals – Whether it’s a discount on the first order, a free gift, or something else, these deals can help inspire customers to get in the door.
• Create a Sense of Urgency – For example, maybe the first 100 customers get a free gift, or new customers get a discount for the first week of your grand opening. This way, people are more likely to come in as quickly as possible to take advantage.
• Use Vendors for Cross-Promotion – During the launch event, you may decide to use vendors, such as food trucks, entertainers, or other local brands. These third parties can help promote the event to their respective audiences, building buzz and driving traffic.

Conclusion

As you can see, starting a business in Oregon can be challenging and rewarding. As long as you take the time and effort to prepare yourself as much as possible, success becomes inevitable, not out of reach. With these 11 steps, you’ll be ready to take on any obstacles that get in your way, and you’ll be able to find your footing faster than if you were winging it. Good luck!

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