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How to start a business in Connecticut in 7 steps


how to start a business in connecticut

Starting a business in Connecticut is thrilling, but can be overwhelming if you're unsure where to begin. Luckily, Connecticut is ranked as the 5th best state to launch a business by WalletHub, considering factors like the business environment, resource accessibility and costs. In this post, we'll guide you through seven essential steps to get started.


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Start a business in Connecticut in 7 steps




01. Come up with a suitable business idea


The first step is to come up with a business idea that will serve as the foundation of your business. There are several approaches you can take to generate potential ideas:


  • Identify your strengths and interests: Think about what you’re good at and what you enjoy doing. This could be a skill, a hobby or an area of expertise. Don't be afraid of unique business ideas if this is where your expertise lies.

  • Research the market: Look for gaps in the market. This could be a new product or service that helps fill an unmet need (such as starting a laundromat business in an area with a lot of renters, or starting a cleaning business in an area with a large concentration of home owning busy professionals ), or an improvement to an existing idea.

  • Consider the location: Connecticut is home to many industries, including healthcare, finance, insurance and manufacturing. Think about how your business idea could fit into one of these industries or address a specific need in the local community. Located in a small town? These small town business ideas might be worth checking out.

  • Brainstorm with others: Talk to friends, family members and colleagues about your business ideas. Get their feedback and see if they have any suggestions.

  • Evaluate the competition: Research the competition in your area and see how you can differentiate your business from theirs and highlight your unique selling proposition (USP). Explore options to provide customers with unique and valuable offerings, such as tutoring due to Connecticut's significant student population, or an eCommerce store and meal delivery service that showcases locally-sourced goods and organic ingredients.



Other business ideas include:



02. Choose your business structure


Choosing the right business type for your business in Connecticut will depend on several factors, including the nature of your business, the number of owners, liability concerns and tax implications. Here are some steps to help you choose the right business type or model for your Connecticut-based business:


  • Consider the different business structures: There are several business structures to choose from, including sole proprietorship, partnership, Limited Liability Company (LLC), non-profit, franchise, S or C corporation and more. Each has its own advantages and disadvantages, so it's important to research each one to determine which is best for your business.

  • Determine the number of owners: If you plan to run the business alone, a sole proprietorship or starting a LLC may be the best option since it provides certain corporate tax benefits. If you plan to have multiple owners, a partnership or corporation may be more appropriate.

  • Consider liability concerns: If you are concerned about personal liability for business debts or legal issues, you may want to consider forming an LLC or corporation, which can help protect your personal assets.

  • Evaluate tax implications: Different business structures have different tax implications. For example, an S corporation can provide tax advantages for certain types of businesses, while a C corporation may be subject to double taxation.

  • Consult with a professional: It's always a good idea to consult a lawyer or accountant before finalizing a business type or model. These professionals can help you understand the legal and financial implications of each option and assist you in making an informed decision. You can consider starting an LLC with Legal Zoom.



03. Choose a name for your Connecticut-based business


Selecting the right name for your business can be an important decision that can impact your brand, marketing, and legal aspects of your business. Here are a few Connecticut-specific business name suggestions to help you get a jumpstart:

  • Nutmeg Tutors

  • Greenwich Gourmet

  • Hartford Homekeeping

  • Fairfield Concierge

  • New Haven Mobile Detailing

  • Mystic Event Planning

  • CT Luxe Transportation

  • Litchfield Wellness Retreat

  • Stamford Pet Services

  • Hartford Handmade


Note that these are just suggestions. You can use Wix’s free business name generator to find other unique ideas. You’ll also want to make sure to check the availability of a name, both as a registered business and a domain name. You can check the Connecticut Secretary of State's business name database to see if the name is already in use.


Once you’ve landed on your final name, submit a name reservation on the state’s business website. You’ll have to pay a $60 filing fee.



04. Create a business plan


When writing your business plan, it's important to be clear, concise, and realistic about your plans to fund, market, and build your business. Take the time to research and analyze your industry, competition and target market to ensure that your business concept statement is based on solid data and informed assumptions. For example, if you plan on starting a laundromat, take the time to learn about laundromat business plans. And remember, your business plan is a living document that should be reviewed and updated regularly as your business grows.



05. License and register your business in Connecticut


The process of licensing and registering your business in Connecticut can be complex and time-consuming. You may want to consider consulting a business attorney or accountant to ensure that you’re following all necessary steps and are complying with all applicable laws and regulations. Here are some steps you’ll need to take:


  • File the Articles of Organization/Incorporation: LLCs will have to file an Articles of Organization, while corporations will have to file Articles of Incorporation with the Connecticut Secretary of State. You can file online or by mail. The filing fee for LLCs is $120, and the fee for corporations is $250.

  • Obtain any necessary business licenses and permits: Depending on the type of business you’re operating, you may need to obtain specific licenses and permits. You can check the Connecticut Department of Consumer Protection website to see which are required for your business.

  • Register for state taxes: If you plan to have employees or sell taxable goods or services, you'll need to register for Connecticut taxes. You can register for a sales tax and use permit with the Connecticut Department of Revenue Services, which will cost $100 at the time of registration.

  • Register for federal taxes: All Connecticut employers are generally required to pay federal taxes. The specific taxes that apply to your business will depend on your business entity, the number of employees you have and your business activities. But to fulfill this requirement, you’ll need to obtain a federal employer identification number (EIN) through the IRS. You can apply for an EIN online, by mail, fax or phone. The easiest—and quickest—way to obtain an EIN is to apply online.

  • Register for insurance: Though the state of Connecticut doesn’t require businesses to have insurance, there are several types of insurance that you’ll want to consider getting for your business (and some may be mandatory for specific industries and business types). These include workers’ compensation insurance, general liability insurance and more. To determine which types of insurance are best for your business, it's a good idea to consult an insurance agent or broker who can assess your specific risks and recommend appropriate coverage.



06. Find funding for your business in Connecticut


The state of Connecticut offers a variety of business funding options for business operations through various state agencies and programs. Some examples include:


  • Small Business Administration (SBA) loans: The SBA provides loans to small businesses with reasonable terms and low-interest rates. Connecticut has multiple SBA offices that can assist you with the loan application process.

  • Grants: There are various grants available for small businesses in Connecticut. You can check the Connecticut Department of Economic and Community Development website for available grants.

  • Angel investors: Connecticut has a thriving startup ecosystem, and several angel investors in the state can provide funding to small businesses. You can find these investors through networking events, online platforms (like AngelList or Gust) or referrals.

  • Venture capitalists: Venture capitalists are investors who provide funding to startups and early-stage businesses. You can find venture capitalists who invest in Connecticut-based businesses through online platforms, networking events or referrals.

  • Crowdfunding: Create a crowdfunding campaign on platforms such as Kickstarter or Indiegogo to raise money for your business.

  • Bank loans: You can apply for a business loan at a bank or credit union in Connecticut. Be prepared to provide a detailed business plan, financial projections and collateral to secure the loan.

  • Friends and family: Consider asking friends and family for investment in your business. However, make sure to have a clear agreement in place to avoid any potential misunderstandings.



07. Create a website for your business


Creating a business website can help you establish a stronger online presence, making it easier for potential customers to find your business and learn more about your products or services. It also helps you boost your credibility, save on marketing costs, and enhance customer service by providing quick answers to FAQs and easy contact options. Plus, you can gain a competitive edge and access valuable data and analytics to make informed business decisions.



How to start a business in Connecticut review


start a business in connecticut review

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How to start a business in Connecticut FAQ


How much does it cost to start a business in Connecticut?

The cost of starting a business in Connecticut can vary depending on the type of business you're starting, its size, and location. However, some of the basic costs you can expect to have to pay include:

  • Business registration fees: LLC registration fees are $120 while corporation registration fees are $250.

  • Licenses and permits: Depending on your industry and location, you may need to obtain licenses or permits from local or state government agencies. The cost of these licenses and permits can vary widely.

Is Connecticut a good place to start a business?

Best businesses to start in Connecticut?



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