Ranked as the sixth top U.S. state for business by CNBC, Tennessee is a popular launchpad for businesses across various industries. With laws and regulations that are favorable to entrepreneurs, the state fosters a pro-business environment and invests in a thriving entrepreneurial ecosystem.
But as exciting as starting a business in Tennessee sounds, it can also be daunting without proper guidance. In this blog post, we’ll cover the seven essential steps for getting started so that you don’t have to go into it blindly.
Start a business in Tennessee in 7 steps
01. Come up with a business idea
Many different types of businesses can be successful in Tennessee, depending on factors such as location, market demand, personal interests and skills. Before finalizing an idea, you’ll want to conduct market research, plus consult business experts who can validate your idea. Here are a few business ideas we've come up with to consider:
Food and hospitality: If you have a passion for food and customer service, starting a restaurant or catering business—or even a bed and breakfast—could be a great opportunity in Tennessee.
Tourism and outdoor recreation: Take advantage of Tennessee's natural attractions and start a business that caters to tourists like a tour company, outdoor equipment rental business, or camping or RV park.
Healthcare and wellness: With an aging population, the demand for healthcare services and products is on the rise in Tennessee. Starting a business in the healthcare or wellness sector—such as a home healthcare agency, fitness center or spa—could be worth looking into.
Technology and innovation: Tennessee's growing number of technology startups and research institutions has fed its culture of innovation. The state is thereby ripe for new technology-based businesses.
Agriculture and manufacturing: Known for its fertile land and diverse natural resources, Tennessee is an ideal location for agriculture and forestry-related businesses. Think: crop and livestock farming, timber and logging, a farm-to-table restaurant or a manufacturing facility.
02. Choose the type of business you want to start
Choosing the right type of business is crucial when starting a business in Tennessee. Each structure has its pros and cons. The choice you make will depend on various factors like your personal liability, tax implications and the size and complexity of your business. Consider these popular business models:
Franchise: Under this model, you can tap into an established brand, proven business model and ongoing support from a franchisor. This allows you to minimize your risk and capitalize on a successful concept.
Online: Play your hand at eCommerce, online services or selling digital products—each of which can be sold through your own branded website and/or established marketplaces (like Amazon).
Service-based: Tennessee's population has been steadily increasing over the years, leading to a growing demand for various services. Examples of service-based businesses include consulting, hair salons or pet care.
Home-based: Save on expenses and enjoy a flexible schedule by starting an online business (such as eCommerce, consulting or tutoring services) that can be done from home.
Social enterprise: Focus on solving social or environmental issues while generating income. Some ideas: a sustainable clothing brand or a non-profit that runs a for-profit business to fund its mission.
Subscription-based: Build a loyal customer base and enjoy predictable revenue by offering subscription-based services, like meal delivery services, streaming services and software-as-a-service.
03. Choose a name for your Tennessee-based business
Finding the right business name is an important decision, as your name has the power to shape the first impression that customers have of your brand. You can use Wix’s free business name generator to get the creative juices flowing.
Here are a few things to consider when evaluating names:
Make it memorable: Choose a name that is easy to remember and stands out from the competition.
Make it descriptive: Consider including keywords that describe what your business does, such as "Tennessee BBQ" or "Nashville Music Store."
Keep it simple: Avoid complex or confusing names that are difficult to spell or pronounce.
Check for availability: Before finalizing your name, check that it’s not already in use by another business. You can check the Tennessee Secretary of State's business name database to see if the name is already in use, plus use Wix’s domain name search to check that it’s available as a website name.
Consider your brand image: Your business name should align with your brand image and values, so choose a name that reflects the tone and personality of your business.
Get feedback: Put your name in front of friends, family and potential customers to get feedback on how it's perceived and make adjustments as needed.
04. Write your business plan
A solid business plan is essential for starting a successful business in Tennessee. It serves as the foundation for your business and outlines your path to profitability. Your plan should include an executive summary, funding plans, management and hiring decisions. It should additionally include details about your marketing and advertising plans.
A business plan is instrumental in keeping your business on track to reaching its goals, plus outlining your vision for potential partners and investors.
05. License and register your business in Tennessee
Before you can open the curtains to your new business, you’ll have to register your business and obtain the proper licenses. We recommend consulting a business attorney or accountant who’s familiar with Tennessee laws and regulations.
For starters, here are some steps you’ll need to take in Tennessee:
Choose your business structure, be it a sole proprietorship, LLC or corporation.
Register your business with the Tennessee Secretary of State by mail or online. The exact paperwork will depend on your business type. For example, LLCs will have to file an Articles of Organization. Filing fees and service fees may apply.
Obtain necessary licenses and permits from the state, county or city (requirements vary depending on your business type). The Tennessee Department of Revenue provides more information on this. You can also check out the Tennessee Department of Commerce & Insurance for info on industry-specific certificates and business licenses.
Register for a sales tax certificate with the Tennessee Department of Revenue if your business will be selling taxable goods or services. You may also need to register for other types of taxes, such as employer taxes or franchise and excise taxes.
Obtain business insurance. While generally not required, it’s highly recommended that you get business insurance to protect you from unforeseen events. There are various business insurance policies to choose from, including general liability insurance, property insurance, professional liability insurance and cyber liability insurance.
06. Find funding for your business
Tennessee offers several business funding options through various state agencies and programs, including:
Small Business Administration (SBA) loans: The SBA provides loans to small businesses with favorable terms and low-interest rates. Tennessee has multiple SBA offices that can assist you with the loan application process.
Grants: Explore various grant options available through the Tennessee Department of Economic and Community Development. Check their website to see what grants are currently available.
Angel investors: In Tennessee, there are angel investors who can provide funding to small businesses. You can find them through networking events, online platforms (like AngelList or Gust) or referrals.
Crowdfunding: You can use crowdfunding platforms like Kickstarter or Indiegogo to raise funds for your business.
Bank loans: Consider applying for a business loan at a bank or credit union in Tennessee. To secure the loan, be ready to provide a detailed business plan, financial projections and collateral.
Friends and family: Consider asking friends and family for initial capital, but be sure to establish clear agreements to avoid misunderstandings.
07. Create a business website
Creating a business website is always a good idea, whether you choose to launch online or with a physical location. Websites are also a powerful tool for building a brand and providing one designated place for people to learn more about your business.
To simplify your work, consider using a business website template, which can be customized according to your needs. Read up on how to make a business website, and tap a platform like Wix to streamline everything from website design to your business setup (did you know: Wix offers a plethora of back-office tools to help your eCommerce, subscription or other type of business get off the ground).
Business examples in Tennessee
Explore some Tennessee-based businesses that have created their websites using Wix, such as Birdie Bros and Lucas Swinehart.
Birdie Bros is a Nashville-based business that provides unique golf-themed products, including apparel, accessories and gift items. Their products are designed to cater to both golf enthusiasts and casual golfers alike. They have a Wix website that showcases their products and offers online shopping, making it easy for customers to purchase their favorite Birdie Bros merchandise.
Lucas Swinehart is a Memphis-based business that offers customized woodworking services, creating one-of-a-kind pieces for clients. From tables and chairs to shelves and cabinets, Lucas Swinehart's creations are both functional and beautiful. With a Wix website, the business is able to showcase their portfolio and connect with potential clients.
How to start a business in Tennessee review
Looking to start a business in another state? Check out how to start a business in South Carolina, how to start a business in Connecticut or how to start a business in Wisconsin.
How to start a business in Tennessee FAQ
How much does it cost to start a business in Tennessee?
This will depend on the type of business you want to start. But initial costs will include a minimum $300 LLC registration fee, and a $15 tax license fee. On top of this you may also need to pay for licenses and permits related to your industry, as well as insurance costs plus equipment, supplies and staffing.
What's required to start a business in Tennessee?
As a basic you'll need - a business name, business registration and licensing, an EIN and state tax fee.