Getting Started with Small Business & Entrepreneurship in
North Carolina

Why Start a Business in North Carolina? 

North Carolina is consistently ranked among the top states in the nation for business. With a competitive cost of doing business, a highly educated workforce, a thriving entrepreneurial ecosystem, and a diverse economy that spans an array of industries, North Carolina offers first-time entrepreneurs an exceptional place to launch and scale a business. Whether you’re a first-time founder or a seasoned professional ready to go out on your own, North Carolina offers a favorable environment for small business growth. 

You don’t have to figure it out alone. Operating in partnership with the North Carolina Department of Commerce, the Economic Development Partnership of North Carolina (EDPNC) Small Business Advisors offer free, personalized, one-on-one guidance to anyone starting a business in the state. Our team of advisors can help you navigate licensing requirements, business structure decisions, financing options, and much more. 

Here’s a quick overview of how to start a business in North Carolina: 

1. Plan. Clarify your idea and write a business plan 
2. Prepare. Choose a business structure and name 
3. Register. File with the state and gather required documentation 
4. Comply. Obtain necessary licenses, permits, and meet tax obligations 
5. Funding. Source the funding you need to get up and running 
6. Staffing. Get your administrative house in order before you make your first hire 
7. Launch. Set up operations, open a business bank account, and start serving customers 

How to Start a Business in North Carolina
(Step by Step) 

Step 1: Create a Business Plan 

Every successful business starts with a clearly defined problem and a compelling solution. This is the purpose of a business plan.  

Before you invest time or money in your new business, ask yourself the hard questions, like: What specific problem am I solving? Who are my ideal customers? What are they currently paying (or not paying) for alternatives? How will I reach them? 

Validating your concept early through conversations with potential customers, market research, or small-scale tests can save you significant time and resources down the road.  

Once you are clear on all the details, it’s time to put pen to paper and create your business plan. This document will be your roadmap for how you build, run and grow your business.

Step 2: Decide on a Business Structure and Name 

Your business structure affects everything from taxes to personal liability exposure and how you operate. Common options include: 

• Sole Proprietorship: Simple to set up, however offers no separation between personal and business liability. 
• Partnership: Suited for two or more co-owners; can be general or limited. 
• Limited Liability Company (LLC): Popular for small businesses; combines liability protection with flexible tax treatment. 
• Corporation (C-Corp): More complex structure, often chosen for businesses seeking outside investment. 

Once you choose a business structure, you will need to choose a business name and formally register your business with the state.   Your business name must be unique in North Carolina and not conflict with any existing registered entity. To register a business name in North Carolina, you’ll want to: 

• Check Business Name Availability through the North Carolina Secretary of State
• Check domain name availability 
• Consider whether to file a DBA (“Doing Business As”) name if operating under a name different from your legal entity name

Check Business Name Availability 

If you have questions, the EDPNC Small Business Advisors can walk you through the pros and cons of each business structure so you can make an educated choice before registering.   
Note that guidance from EDPNC is not intended to replace professional legal or financial counsel. 

Step 3: Get License Requirements  

North Carolina does not issue a general business license that covers all requirements. Licensing is based on occupation or profession. The North Carolina Business & Occupational License Database (NC BOLD) is the state’s resource for verifying what type of license you may need. 

Additionally, many cities and counties have permit and registration requirements too, even for home-based businesses, so it is important to contact them as part of your business startup process. 

Our team of advisors can help you identify the specific license categories likely applicable to your business and connect you with the city, county, and state contacts you’ll need.  

Step 4: Gather Tax Information 

All businesses, except sole proprietors, are required to register for a federal tax ID, called a Employer Identification Number (EIN). Sole Proprietors without employees may opt to use an EIN for privacy/banking purposes. 

Understanding your tax obligations from the start sets you up for long-term compliance. Key things to keep in mind include: 

• Sales and Use Tax. If you sell taxable goods or certain services, you’ll need to apply for a certificate of registration with the NC Department of Revenue and collect and remit sales tax. 
• Employer Taxes: If you hire employees, you’ll need to withhold state and federal income taxes and pay employer payroll taxes.  
• Employer Compliance: Employers have several compliance requirements including: unemployment tax, worker’s compensation, reporting of new hires, state and federal Occupational Safety And Health Act (OSHA) regulations and more. 

You don’t need to feel overwhelmed by these requirements. The EDPNC has a more comprehensive list of Tax Information & Employer Requirements available for you to reference.

Step 5: Identify Source of Financing 

Securing startup capital is one of the biggest challenges new entrepreneurs face. However, there are more options available than you may realize. Common funding avenues for small businesses include: 

• Personal savings and bootstrapping 
• Investment by friends and family  
• Microloans through community lenders and nonprofit organizations 
• Traditional bank loans and Small Business Administration (SBA)-backed financing 
• Community Development Financial Institutions (CDFIs), which often serve entrepreneurs who may not qualify for traditional bank loans 
• Grant programs through state agencies, nonprofits, and community foundations 
• Specialized programs that support underserved and rural entrepreneurs 

Our team can help entrepreneurs understand the multitude of financing resources available. However, the most successful funding strategy is plan-first, apply-second. Having a complete business plan for your small business and clear financial projections dramatically improves your chances of approval from any lender or grant program. 

Step 6: Learn Employer Responsibilities 

Hiring your first employee is a significant milestone, and it comes with legal and administrative responsibilities. Key areas to address include: 

• Human Resource Policies: Develop basic employment policies, an offer letter process, and an employee handbook outlining expectations, benefits, and conduct standards 
• Payroll Setup: Register with the IRS and North Carolina Department of Revenue for payroll tax withholding 
• Unemployment Insurance: Register with the North Carolina Division of Employment Security 
• Workers’ Compensation Insurance: Most North Carolina employers with three or more employees are required to carry workers’ compensation coverage 
• New Hire Reporting: North Carolina employers are required to report all new hires to the NC Department of Health and Human Services 

Understanding what’s required of you as an employer before you hire your first employee will help you get started on the right foot. 

Step 7: Prepare to Launch Your Business 

Before you officially launch, make sure your operational foundation is solid: 

• Banking: Open a dedicated business checking account to keep personal and business finances separate. 
• Bookkeeping: Set up a simple accounting system from day one, even if it’s just a spreadsheet to start. 
• Business Insurance: At minimum, consider general liability coverage; other types may be required depending on your industry. 
• Recordkeeping: Establish a system for contracts, receipts, tax documents, and employee records. 
• Goal Setting: Define 2–3 simple metrics to track from your first week: new leads, revenue, or customer inquiries. 

A strong operational setup helps you stay organized and scale more efficiently. We recommend a free consultation with an EDPNC Small Business Advisor before you launch to make sure you haven’t missed any critical steps. 

Small Business Resources in North Carolina 

One of the most valuable resources available to any North Carolina entrepreneur is completely free: the EDPNC Small Business Advisors team. Working in partnership with the North Carolina Department of Commerce, our advisors support small businesses with: 

• Personalized, one-on-one guidance that is tailored to your specific industry, stage of development, and goals. 
• Step-by-step startup navigation, from business plan structure and registration to early operations and growth. 
• Practical tools and planning resources for marketing, franchising, and more. 
• Connections to a small business ecosystem. This includes mentorship networks, training programs, and cost-effective resources and other local partners. 

Additional resources available to North Carolina small business owners include: 

• North Carolina Small Business Center Network: Free coaching, workshops, and business planning assistance, with an office at each of the 58 North Carolina Community Colleges. 
• SCORE: Free business mentoring, webinars, and templates through the Small Business Administration’s national nonprofit partner network. 
• Small Business and Technology Development Center (SBTDC): Organization offers businesses startup guides, video resources, and consulting. 

Get Help Starting a Business in North Carolina 

Starting a business involves multiple decisions—from choosing a structure to meeting licensing and tax requirements. While many entrepreneurs navigate this process independently, others choose to work with an advisor to avoid costly mistakes or delays. 

Free, one-on-one guidance is available through the EDPNC Small Business Advisors. Our team of advisors can help you understand requirements, identify next steps, and connect you with resources across North Carolina. Whether you’re still testing an idea, preparing to register your business, or getting ready to hire your first employee, their free, personalized guidance will help you avoid common pitfalls and make informed decisions.