Starting a Business in North Carolina

Introduction

Making it easy to start and grow a business is essential for North Carolina’s economic future. Yet, with NC ranking 19th in new business applications, we clearly have work to do to foster a more entrepreneur-friendly environment. 

In this newsletter, I’m going to share our experience starting a business in NC, offer some ideas on how our state can better support startups, and share our new business checklist. 

Registering Your Business with the NC Secretary of State (SOS)

While it was easy and affordable to get registered, there are major opportunities to help NC startups post-registration so they have a better shot of long-term success. 

What We Liked

• Short, Simple Filings - The filing was easy to understand and took less than 30 minutes to complete.
• Reasonable Cost: It costs $60 to file Articles of Incorporation. Expediting the approval process to 24 hours increases the fee to $163. Not bad.

What We Didn’t Like

• Another Confusing Government Website - The NC SOS website is filled with various resource links, making it hard to find one clear path to properly create your business. 
• Assistance with Ongoing Filing Requirements – The NC SOS website doesn’t consolidate filing history (what you’ve done) or provide reminders for ongoing requirements. At the very least, they should guide startups to tools like CorpNet, which we use, which offer this functionality.‍
• Assistance with State Taxes - If you have NC employees, you must pay income withholding taxes and state unemployment insurance fees. The NC SOS does not offer assistance or guidance on how to set up these accounts right after incorporation. Luckily, our payroll provider (Gusto) warned us and set this up for us for a fee.

Post-Registration Need - Robust New Business Checklist

Starting a new business requires an entrepreneur to complete a long list of tedious but mission critical tasks. The easier we make this process, the more new businesses will be created and succeed. The NC SOS website does provide information about new business development – through initiatives like the Rural Rise program – but it’s hard to navigate. The business checklist they provide is a static PDF and is quite overwhelming.

Meanwhile, the NC Department of Commerce offers a better step-by-step guide and free consultation through its partnership with the Economic Development Partnership of NC. However, many new business owners, including us, aren’t aware of this resource because it’s not integrated into the NC SOS website – the very place where businesses are officially created.

The biggest need for NC is to develop a robust, interactive new business checklist that consolidates all necessary steps in a clear, digestible, and actionable way. A modernized, user-friendly guide would ensure that every entrepreneur in North Carolina has access to the right tools, support, and information at the right time.

We are sharing this feedback with both agencies and are developing our own checklist based on our own experience setting up The Forum.

The Forum Business Startup Checklist

Here are the initial steps we followed to set up our business in North Carolina:

1. Register as a Non-Profit Corporation in NC: As described above, this was an easy and affordable process through the NC Secretary of State website.
   
   
2. Obtain an Employer Identification Number (EIN): This is required for federal tax filing, payroll, establishing bank accounts, and more. The online application process is quick and easy.
   
   
3. Register for IRS Federal Tax Exemption: Non-profits in all states must apply 501(c)(3) status to be exempt from federal taxes. The process is expensive ($600), involves a long and confusing questionnaire, and it takes 6-8 months for the IRS to make a determination. If the questionnaire overwhelms you, we recommend you pay a third-party to manage the process for you (there are many online). If you’re a for-profit, an EIN is sufficient.
   
   
4. Acquire a Website Domain: Choose something that aligns with your company name and is easy for customers to remember. We used GoDaddy to find and purchase our domains. If you are a non-profit, be sure to buy the .org domain and the .com and apply a redirect (.com goes to .org).
   
   
5. Develop Brand Assets and a Website: Strong branding (logo and colors) and a user-friendly website will set the tone for your business and help attract customers. You can use website development companies for this or find great, lower-cost freelancers on sites like Upwork.
   
   
6. Establish Social Media and Email Newsletters: These platforms are key for outreach and building a community around your business. We centralize our social media content with Hootsuite and use Mailchimp for our email newsletter.
   
   
7. Set Up Business Bank Accounts and Payroll: Entrepreneurs should keep their personal and business finances separate from the beginning. We use the online bank Mercury. Their account setup takes just a few days, they offer free checking and savings solutions, and their technology is best in-class. For payroll, we use Gusto, which provides a low-cost solution for small businesses and all the tools needed to support a business as they scale including managing state withholding tax and unemployment insurance.
   
   
8. Create a Business Plan, Fundraising Deck and Marketing Materials: These materials help attract investors, customers and grants/donations, and optimize strategic business decisions. We use Canva, which makes it easy to bring in your brand assets and provides powerful design templates. 

We are working on converting this into an interactive, user-friendly checklist so that new entrepreneurs have a clearer, more organized path to starting and growing a business in the crucial early years.

You can support our work by subscribing to our newsletter, engaging with us on social media, and sharing our work with colleagues, friends, and neighbors who care about NC’s future.