How to Start a Business in Vermont

Starting a business in Vermont involves several key steps, including choosing a business structure, registering with the state, and obtaining necessary licenses and permits. Entrepreneurs must also consider market research and business planning to ensure a successful launch.

Vermont Economy Trends

Small Business Statistics: Vermont is home to approximately 80,000 small businesses, which employ about 61.5% of the state's workforce. Notable industries include manufacturing, healthcare, and tourism. For more detailed statistics, visit the U.S. Small Business Administration.

New Business Application Statistics: In Vermont, there were 7,462 new business applications. For more information, see the Census Bureau's visualization.

Exports and GDP: Vermont's economy benefits from exports in sectors like machinery and electronics, contributing significantly to the state's GDP. For recent data, refer to the U.S. Census Bureau.

Economic Highlights: Vermont's economy is supported by large employers such as GlobalFoundries and Keurig Dr Pepper. The state offers a favorable tax climate for businesses, particularly in key cities like Burlington and Montpelier.

• Step 1: Perform Market Research
• Step 2: Write a Business Plan
• Step 3: Get Licenses and Permits
• Step 4: Acquire Funding
• Step 5: Choose a Business Entity
• Step 6: Select a Business Location
• Step 7: Register the Company

Step 1: What Kind of Business Should I Start in Vermont?

Selecting a business type in Vermont depends on factors such as personal interests, market demand, and regional economic strengths. Dominant industries in Vermont include:

• Manufacturing
• Healthcare
• Tourism

For more information, visit the Vermont Department of Economic Development.

How to Do Market Research in Vermont: Market research involves gathering information to understand consumer needs and market conditions. Primary research methods include surveys and interviews, while secondary research involves analyzing existing data. Key areas to analyze include consumer demographics, buying behavior, and market gaps. Conducting a competitive analysis helps understand other businesses in the area. Research enables entrepreneurs to make data-driven decisions when launching a new business in Vermont.

Step 2: How to Write a Business Plan in Vermont

A business plan is essential for clarifying goals, attracting investors, securing funding, organizing operations, and evaluating progress. It is valuable for both new and scaling businesses and can evolve over time.

Executive Summary: This section provides a snapshot of the business, including its mission statement, product or service offerings, and basic information about the leadership team, employees, and location.

Company Description: Detail the nature of the business, the marketplace needs it aims to satisfy, and the specific consumers, organizations, or businesses it will serve.

Market Analysis: Include industry insights, target market demographics, and competitive analysis to demonstrate a thorough understanding of the market landscape.

Organization and Management: Outline the business's organizational structure, detailing the ownership, management team, and board of directors if applicable.

Product/Service Line: Describe the products or services offered, including the benefits to customers and the product lifecycle.

Marketing Plan: Explain the marketing strategy, including how the business will attract and retain customers and the channels used for marketing.

Financial Plan: Provide financial projections, including income statements, cash flow statements, and balance sheets for the next three to five years.

Appendix: Include any additional information such as resumes, permits, lease agreements, legal documentation, and other relevant documents.

Step 3: Do I Need a Business License in Vermont?

Yes, in most cases, businesses in Vermont need to obtain specific licenses or permits. There is no universal business license issued at the state level. Licensing depends on factors such as the type of business, its physical location, whether the business is regulated, and the products or services offered. Common types of business licenses or permits include sales and use tax permits, local city or county business licenses, and regulatory or professional licenses.

Business owners can determine which licenses apply to them by using state government licensing search tools or portals, consulting the Vermont Department of Economic Development, or accessing centralized online checklists.

How Much Does a Business License Cost in Vermont?

Business license costs in Vermont vary depending on factors such as business type, jurisdiction, and the type of license or permit required. Some licenses may be available at no cost, while others may range from $15 to $100 for a general business license. Certain groups, such as veterans or nonprofits, may qualify for exemptions or fee waivers. Business owners should check with the appropriate issuing agency for exact fee amounts and payment policies.

How to Register for a Seller’s Permit in Vermont

In Vermont, a seller’s permit is referred to as a sales tax license, which authorizes the sale of taxable goods or services. The Vermont Department of Taxes issues this permit. Businesses can apply online through the Vermont Department of Taxes website or by submitting a paper form. Required information includes the business's EIN, start date, address, ownership details, and expected sales. There is no cost for the permit, but businesses must renew it annually. For further support, contact the Vermont Department of Taxes.

Step 4: How Much Does it Cost to Start a Business in Vermont?

The cost of starting a business in Vermont varies based on factors such as business type and structure, industry, location, and scale of operation. According to the U.S. Small Business Administration, startup costs can range from a few thousand dollars for home-based businesses to significantly higher amounts for larger enterprises. Common expenses include registration and incorporation fees, licensing and permits, equipment, supplies, office space, insurance, professional services, employee-related expenses, and marketing. Filing fees for LLC formation or corporation registration typically fall at $155.

How to Get Business Funding in Vermont

Startups in Vermont have access to multiple funding options. Business owners should estimate their capital needs and choose suitable funding options based on their goals and eligibility. Common funding sources include self-funding, loans, grants, investors, and crowdfunding.

How to Self-Fund a Business in Vermont

Self-funding, or bootstrapping, involves using personal financial resources to start or run a business. Common methods include using savings, selling personal assets, earning supplemental income, pre-ordering, or borrowing from friends or family. Advantages include full ownership and control, while risks involve limited capital and personal financial exposure. Entrepreneurs should budget carefully and optimize resources. For assistance, consult the Vermont Chamber of Commerce or Small Business Administration tools.

How to Find Investors in Vermont

An investor provides capital and may offer mentorship, networking, or strategic guidance. Compensation often involves equity or dividends. Business owners in Vermont can connect with investors by attending industry events, using local investment networks, contacting state-level organizations like the Vermont Commerce Authority, and preparing a compelling pitch. Types of investors include angel investors, venture capitalists, friends and family, local private investors, and crowdfunding investors.

How to Get a Loan to Start a Business in Vermont

Business loans are a common funding method for new businesses in Vermont. Options include traditional bank loans, SBA-backed loans, and non-traditional options like peer-to-peer lending, microloans, supplier financing, and family loans. Steps to obtain a loan include choosing the right loan type, meeting eligibility criteria, providing collateral, and preparing documentation such as financial statements, business plans, and tax returns. Required documents usually include:

• Financial statements
• Business plan
• Proof of income
• Tax returns

Prospective business owners should consult financial professionals and compare loan offers to find the best terms.

How to Find Vermont Business Grants

Business grants are funding sources from government, private, or nonprofit organizations that do not require repayment. Each grant program has different eligibility requirements and application processes. In Vermont, business owners can find grants through the Vermont Commerce Authority, local economic development offices, state agency websites, and dedicated grant portals. Entrepreneurs should use grant search tools and consult local business support centers for assistance.

Can I Start a Business with No Money in Vermont?

Starting a business with absolutely no money in Vermont is not possible, as some capital is required for essentials like registration fees, licenses, equipment, and marketing. However, it is possible to launch a low-cost business by starting from home, choosing a service-based model, using free resources, applying for grants, or networking locally. Vermont offers free or low-cost business tools, such as online registration portals, to help reduce expenses.

Step 5: Choosing a Business Structure in Vermont

Choosing a business structure in Vermont is crucial as it affects taxation, liability, management, and registration requirements. Available structures include sole proprietorships, partnerships, LLCs, and corporations. Each structure has implications for taxation, liability, operations, ownership, and funding. Consulting a tax accountant, attorney, or business consultant is recommended. For more information, visit the SBA's guide on business structures.

How to Start a Sole Proprietorship in Vermont

A sole proprietorship is a business owned and operated by one individual, offering full control and simple tax treatment but with personal liability for debts.

Starting a Sole Proprietorship in Vermont:

• Step 1: Choose a business name. You can use your legal name or a trade name.
• Step 2: File a DBA (“Doing Business As”) if using a trade name. This is typically filed at the local level.
• Step 3: Obtain necessary licenses and permits. Requirements vary by business type and location. An EIN is required if hiring employees.

Sole proprietorships do not need to be formally registered with the Secretary of State in Vermont.

How to Start a Corporation in Vermont

A corporation is a legal entity separate from its owners, providing limited liability to shareholders. It can be sued, taxed, and enter contracts independently. Corporation types include C-Corp, S-Corp, and possibly B-Corp or nonprofit, with varying tax treatments.

Core Features:

• Legal separation of owners and business
• Limited liability for shareholders
• Centralized management
• Transferable ownership through stock
• Taxation of profits (double or pass-through)

Steps to Form a Corporation in Vermont:

• Step 1: Choose a Corporation Name. Ensure it meets naming requirements, including required words like “Corporation” or “Inc.”
• Step 2: Appoint a Registered Agent and Registered Office. This can be an individual or company with a physical address in Vermont.
• Step 3: File the Articles of Incorporation with the Secretary of State. Include the corporation's name, shares, incorporators, address, and agent. Filing can be done online or by mail, with fees applicable.
• Step 4 (Optional): Foreign Corporations must follow a different process, including submitting a Certificate of Good Standing.
• Step 5 (Optional): IRS Tax Classification may involve filing Form 2553 for S-Corp election.

How to Start an LLC in Vermont

An LLC (Limited Liability Company) combines elements of corporations and partnerships, offering limited liability, pass-through taxation, fewer formalities, and flexible ownership or management.

Steps to Form an LLC in Vermont:

• Step 1: Name Search/Selection. Use the state portal to search for or reserve a business name. Fees may apply, and reservation is optional.
• Step 2: File Articles of Organization with the Secretary of State. Filing can be done online or by mail, with applicable fees. Further steps may include obtaining an EIN and appointing a registered agent.

How to Start a Business Partnership in Vermont

A business partnership is owned by two or more individuals. Types include general partnerships, limited partnerships, and limited liability partnerships.

How to Start a Limited Partnership in Vermont:

A Limited Partnership (LP) includes at least one general partner with full liability and management control, and one or more limited partners with limited liability. Starting a partnership requires filing documents with the Secretary of State, such as a Certificate of Limited Partnership. Filing can be done online or by mail.

How to Start a General Partnership in Vermont:

A general partnership (GP) is jointly owned and managed by two or more individuals who share profits, losses, and liability. Registration is optional, but partners may file a Statement of Partnership Authority or trade name registration. Partnerships are generally recorded at the county recorder’s office.

How to Start a Nonprofit in Vermont

A nonprofit is a corporation formed for purposes other than profit, such as charity, education, or social welfare. Nonprofits must comply with state-specific incorporation procedures and file with the Secretary of State. Incorporating a nonprofit involves filing Articles of Incorporation, appointing directors, and drafting bylaws. To obtain tax-exempt status, nonprofits must file with the IRS (Form 1023 or 1023-EZ) and possibly a state tax exemption form. Filing fees and processing options vary.

Step 6: Choosing a Business Location in Vermont

Choosing a business location is critical, especially for customer-facing businesses. Location impacts success, visibility, operations, and compliance. Common setups in Vermont include brick-and-mortar, online, home-based, and mobile businesses. Key factors to consider are proximity to the target market, accessibility, local competition, cost, zoning laws, and brand visibility. Relevant state or local agencies regulate location requirements, such as zoning boards and safety inspection offices.

What Kind of Business Can I Run From Home in Vermont?

Running a home-based business in Vermont is influenced by local regulations, such as zoning ordinances and homeowner association rules. Some businesses are typically allowed if they do not affect the neighborhood’s residential character, while others may be prohibited due to noise, traffic, or safety concerns. Individuals should check with local zoning or planning departments, review HOA rules, and examine lease agreements or deeds.

How Do I Start a Small Business From Home in Vermont

Home-based businesses in Vermont are subject to the same legal requirements as other businesses, including formation, registration, licensing, and zoning compliance. Local governments enforce zoning laws that govern business operations from residential properties. Applicants may need a Home Occupation Permit to assess business suitability in a residential setting. Compliance is best ensured by contacting local governing agencies.

Starting a Business Online in Vermont

An online business is conducted over the internet, with legal requirements similar to other businesses in Vermont. Steps include choosing a business name, selecting a legal structure, filing formation documents, obtaining an EIN, and acquiring relevant licenses or permits. Additional regulations may apply, such as consumer protection laws or internet-specific sales restrictions.

Step 7: Legal Requirements for Starting a Business in Vermont

Vermont does not limit who can start a business, but all new businesses must follow state laws and local ordinances. Legal requirements depend on business structure, industry type, location, and products or services offered. Nearly all businesses need to file formation documents, obtain licenses or permits, comply with tax obligations, and designate a registered agent and business address.

How to Get an EIN Number in Vermont

An EIN (Employer Identification Number) is a unique nine-digit number issued by the IRS for tax identification purposes. It is required for hiring employees, opening business bank accounts, filing taxes, and changing business structures. Businesses can apply for an EIN through the IRS online using the EIN Assistant, by mail or fax using Form SS-4, or by phone for international applicants. The applicant must have a valid Taxpayer Identification Number, and the responsible party must be a natural person.

How to Get a Vermont Registered Agent

A registered agent is designated to receive legal documents on behalf of a business. In Vermont, LLCs, corporations, and limited partnerships must appoint a registered agent. The agent can be an individual at least 18 years old with a physical address in Vermont or a domestic or foreign business entity authorized to operate in the state. Appointment is made in the formation paperwork, and there may be fees associated with appointing a registered agent. For more information, visit the Vermont Secretary of State's website.

Patents, Trademarks, and Copyrights in Vermont

Patents, trademarks, and copyrights are forms of intellectual property (IP) protection granted to inventors and creators.

Patents: Provide inventors exclusive rights to prevent others from using, making, selling, or importing their invention. Governed federally by the U.S. Patent and Trademark Office (USPTO) under Title 35 of the U.S. Code, patent terms generally last 20 years from the filing date.

Trademarks: Words, phrases, symbols, or designs that distinguish the source of goods or services. Federal trademarks are handled by the USPTO, while state trademarks are managed by the Vermont Secretary of State. Trademarks last 10 years and are renewable.

Copyrights: Protect original creative works, giving exclusive rights to reproduce, distribute, display, and perform the work. Overseen by the U.S. Copyright Office under Title 17 of the U.S. Code, copyrights last for the life of the author plus 70 years.

Vermont Business Tax

The Vermont Department of Taxes oversees business taxation. Tax obligations vary depending on business structure, industry, and activity. Common taxes include:

• Income or Corporate/Franchise Tax: Levied on business profits.
• Sales and Use Tax: Applied to the sale of goods and services.
• Employment or Payroll Taxes: Withheld from employee wages.
• Property Tax: Based on the value of business property.
• Specialty/Excise Taxes: Industry-specific taxes, such as those on alcohol or tobacco.

Are Business Records Public in Vermont?

Yes, business records maintained by state or local government agencies in Vermont are generally public and can be inspected or copied by request, unless exempted by law. Agencies such as the Secretary of State, Department of Revenue, and County Recorder typically maintain these records. Some information, like Social Security Numbers and trade secrets, is exempt from public access.