How to start a business in Ohio in 14 steps (2025 guide)

Bring your business vision to life in the Buckeye State. Ohio offers exciting opportunities for entrepreneurs, and we’re here to guide you through every step—from securing funding and registering your business to understanding insurance requirements and exploring tax incentives. With the right resources and support, you’ll have everything you need to start strong and succeed.

Why start a business in Ohio in 2025?

Ohio stands out as a top state to start a business, ranking sixth in the nation according to a Forbes Advisor study. Scoring 81 out of 100, Ohio excels in key areas like business costs, financial accessibility, and workforce quality. With a 13% growth in small businesses over the past year and a 76% business survival rate, Ohio offers a thriving environment for entrepreneurs.

Wondering how to start a business in Ohio? Our small business guide will walk you through the steps. 

Here are the topics we’ll cover in this step-by-step guide: 

• 14 steps to starting a business in Ohio
• Step 1: Decide what type of industry is best for your business
• Step 2: Conduct industry research
• Step 3: Create a business plan
• Step 4: Choose your business entity: Types of business entities in Ohio
• Step 5: Secure funds: Ohio small business funding, loans, and grants
• Step 6: Choose your Ohio business name and Ohio DBA
• Step 7: Pick a business location in Ohio
• Step 8: Find an Ohio registered agent 
• Step 9: Get an Ohio EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in Ohio 
• Step 11: Register for your business license and permits in Ohio
• Step 12: Secure insurance for your Ohio small business 
• Step 13: Prepare to pay taxes on your business in Ohio
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions

14 steps to starting a business in Ohio

In a state that boasts more than 99% small businesses, Ohio is a great location to launch your new venture. Below, we outline each step, from shaping your idea to building a strong foundation for growth. With small business resources and insights designed for Ohio, you’ll be on the right path as you begin your journey.

Step 1: Decide what type of industry is best for your business

Choose your business and industry by aligning your skills and passions with Ohio's economic strengths and local market demands. For instance, Columbus excels in technology and professional services, while the state’s southern and central regions are historically strong in agribusiness and manufacturing. Evaluating market needs and leveraging your expertise will position your business for long-term success. 

Also look for where the state is investing in growth and innovation, such as renewable energy, healthcare, and logistics. Tapping into these emerging sectors can provide additional opportunities and position your business with Ohio's future-focused initiatives.

Not sure where to start? Begin by exploring a variety of small business ideas to spark inspiration.

Step 2: Conduct research in your business’s industry

Once you've identified your desired industry in Ohio, it's essential to conduct a competitive analysis, assess customer needs, and examine industry trends. This process will give you a deeper understanding of the market, help you position your business strategically, and craft strategies that address customer demands while setting you apart from competitors.

A good starting point is the Department of Development's Office of Research. It provides data and analysis on Ohio’s economic, industrial, demographics, and trends.

Step 3: Create a business plan

Creating a business plan is vital when starting up your business. A business plan is a strategic document outlining your company's goals, strategies, and financial projections. It serves as a roadmap for growth and a tool to attract investors.

Your business plan should include the following:

• Executive Summary: A brief snapshot of your business and its primary goals.
• Company Description: An overview of your mission, history, and long-term objectives.
• Market Research and Analysis: Insights into your target audience and prevailing industry trends.
• Competitive Analysis: A review of your competitors and the factors that give you an edge.
• Products and Services: A description of what you offer and the value your products and services bring to customers.
• Marketing and Sales Strategies: Plans for attracting and retaining your customer base.
• Financial Projections: Estimates of income, cash flow, and other key financial metrics.
• Management and Leadership: A summary of your team’s qualifications and experience.
• Funding Request: An explanation of your funding requirements and intended use of funds.
• Appendix: Supplementary materials, like detailed market research or financial documents.

Developing a detailed business plan is a fundamental step in defining your goals, securing investors, and laying the groundwork for your growth. You can start by using a free business plan template. For personalized guidance and expert help with writing your plan, connect with an Ohio Small Business Development Center near you.

Step 4: Choose your business entity: Types of business entities in Ohio

It's essential to choose the right business structure for your venture as it will impact your taxes, legal responsibilities, and the way you manage and operate your business. The different types include:

Sole Proprietorship

A business owned and operated by one person, with no legal distinction between the owner and the business.  

General Partnership

A business owned by two or more people who share profits, losses, and management responsibilities.

Corporation 

A legal entity separate from its owners, with shareholders who have limited liability for the company's debts and obligations.

Limited Liability Company (LLC)

An LCC is a hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership.

Step 5: Secure funds: Ohio small business funding, loans, and grants

Determine the best way to secure funding based on your financial situation, goals, and business entity. Starting a business in Ohio comes with varying costs depending on factors like your industry, required permits, licenses, and operational needs. You also must assess costs such as inventory, equipment, rent, and expenses based on your business's complexity and requirements.

Once you've estimated your startup costs, it’s time to determine the best way to secure funding. Options include everything from taking out a loan to applying for small business grants.

Ohio also has various state-specific programs for small business funding, such as the following:

GrowNOW Initiative

The GrowNOW initiative is ideal for small businesses with fewer than 150 employees.

Ohio Capital Access Program (OCAP)

The OCAP offers financial assistance to help small companies with equipment purchases or business operations.

Ohio Third Frontier

Ohio Third Frontier is an economic development initiative that requires businesses to operate in biosciences, technology, energy, or manufacturing to qualify. There are various opportunities for eligible businesses. 

State Small Business Credit Initiative (SSBCI)

The SSBCI is a federal program that assists with funding for small businesses in Ohio. You can learn more about eligibility requirements on the official Ohio Department of Development website.

Ohio Grant Programs

Browse the official U.S. Grants website to review available grants for small businesses. Popular grants available for small-business owners in Ohio include:

• SBDC Grants: SBDC grants, or Ohio Small Business Development Center Grants are ideal for business development, training, marketing, equipment, and other essential services when getting started.
• Ohio Innovation Partnership: Third Frontier: Technology-based companies—especially those focused on the energy, manufacturing, biosciences, or IT sectors—can benefit from Ohio Third Frontier.
• JobsOhio Inclusion Grant: The JobsOhio Inclusion Grant is optimal for minority-owned businesses in Ohio aiming to rebuild underserved communities or regions.

Finding grants throughout Ohio is also possible by accessing The Ohio Grants Partnership portal. Search for funding opportunities based on grant type, category, agency, and date(s).

Step 6: Choose your Ohio business name and Ohio DBA

Choose a distinctive and memorable name for your business, ensuring it’s available for use and meets Ohio’s business naming regulations. For example, your business name must be unique and distinguishable from any other LLC, corporation, or reserved name in the state of Ohio. You cannot use a name that is already in use or too similar to an existing name

Using the official Ohio Secretary of State business search online allows you to find any existing business name. 

Reserve your business name

Register your business name online with the Ohio Secretary of State by filling out form 534a. The current fee is $39.00.

Filing a fictitious business name (DBA)

A DBA, also called a fictitious name, is required if you launch and run a business under a name that is anything other than your legal business name in Ohio. This includes those who are working as sole proprietors and those with LLCs and corporations of any type.

You can file a fictitious name online with Ohio's Secretary of State online filing system. You can also choose to download the DBA registration form and mail it directly to Ohio's Secretary of State. Keep in mind that DBAs in Ohio are valid for five years. After this period has passed, you can renew your DBA for five more years for $25. The initial filing fee for your first DBA will run $39 per DBA requested.

Step 7: Pick a business location in Ohio

Thinking about launching a freelance LLC in a charming Ohio town like Granville? Or perhaps you're eyeing a retail space in an urban locale such as Columbus or Cleveland? The location you choose for your business in the Buckeye State can influence everything from your operating costs and tax implications to customer accessibility and your talent pool.

Before settling on a location, consult your local municipality to identify any required permits or licenses. Depending on your business type, you might also consider operating from home, which could help minimize expenses while maintaining flexibility.

If you have your heart set on setting up shop in a metropolitan area, here are some things to consider: 

Columbus

Columbus offers a rich environment for businesses looking to tap into a diverse and highly educated talent pool. With access to major universities, research institutions, and a strong business community, it's a prime area for innovation and growth. The city boasts a strong economy and a commitment to supporting business relocation, expansion, and retention. With proximity to 41% of the U.S. population and 80% of corporate headquarters within a day's drive, the city offers excellent access to business resources and opportunities.

Cleveland

Cleveland is an excellent choice for businesses looking for affordable commercial office space and lower monthly rent costs. The city is undergoing a revitalization, making it attractive for companies seeking growth in sectors like healthcare, technology, and manufacturing. 

Cincinnati

Home to six Fortune 500 companies, Cincinnati is an ideal location for entrepreneurs in the financial services sector or those aiming to minimize operating expenses. The city offers a business-friendly environment, with lower taxes and a competitive cost of living. Its strong banking and commerce presence, combined with its growing tech scene, makes it a solid choice for new and expanding businesses.

Toledo

Toledo has been ranked as one of the top manufacturing hubs in the United States. Its strategic location near the Great Lakes offers businesses easy access to both national and international markets. It’s an excellent choice for those seeking affordable office space and a central location for logistics. With its focus on industrial growth, Toledo provides a cost-effective base for companies in manufacturing and distribution.

Additional Considerations

When researching regions in Ohio, keep the following considerations in mind:

• Proximity: Consider the proximity to your suppliers and customers when selecting a city or region to operate your small business.
• Tax rates: Incentives and tax rates should be considered to determine which location is optimal for your business type and industry.
• Regulations: Permits, licensing, and regulations for each area in Ohio should also be researched and compared to find the most suitable location for your business.
• Quality of life: Consider commute times, amenities, and costs nearby to find a location that's ideal for the type of small business you plan to open.

Step 8: Find an Ohio registered agent

In Ohio, if you're the owner of a corporation or LLC, you must have a registered agent by law. A registered agent, commonly known as a statutory agent in the state, is responsible for receiving legal documents on behalf of your business. The registered agent needs to be available during regular business hours.

Your registered agent can be:

• You: You can serve as your own registered agent if you are an Ohio resident over the age of 18 with a physical address in the state.
• A friend or family member: They must be an Ohio resident over 18 with an Ohio address.
• Commercial registered agent services: These services can represent your business for a fee.
• Another business entity: A domestic or foreign corporation, LLC, partnership, or other business entity authorized to do business in Ohio can serve as a statutory agent.

Step 9: Get an Ohio EIN and file your tax and employer identification documents

An EIN (Employer Identification Number) is a nine-digit number the IRS uses to identify your business for tax purposes. Although Ohio doesn't require a state EIN, you'll need one to file payroll taxes and federal tax returns, open a business bank account, and apply for loans. You can apply for a free EIN through the IRS website.

Step 10: Register as a small business in Ohio

Next, you’ll need to register your small business. The requirements and fees depend on your business entity.

Step 11: Register for your business license and permits in Ohio

You will need to register for any applicable permits and licenses. You will need to register for any applicable permits and licenses, which vary depending on your business activities, location, and industry, so it's essential to research the specific requirements for your Ohio venture.

Do you need a business license in Ohio?

Ohio does not require a general business license at the state level, but as mentioned above, businesses may need various licenses and permits depending on their industry and location. Some examples of common licenses and permits in Ohio include:

• Seller's permit: Required to sell products and collect sales tax
• Zoning permit: May be required based on your location
• Health permits: May be required when handling and serving food or beverages
• Alcoholic Beverage Control (ABC) permit: Required when working with alcohol
• Vendor's license: May be necessary when selling particular items

Businesses should check with local city and county authorities for additional licensing requirements.

Step 12: Secure insurance for your Ohio small business

Business insurance is an important investment for protecting your company's assets and mitigating potential risks. From property damage and liability claims to employee injuries and data breaches, having the right coverage can safeguard your business and provide financial security in times of need. Let's explore some types of business insurance and how they can benefit your company.

Step 13: Prepare to pay taxes on your business in Ohio

Starting a business in Ohio means taking on the responsibility of various tax obligations. While Ohio doesn't have a corporate income tax, there are other federal, state, and payroll taxes to be aware of.

These taxes are commonly due from entrepreneurs in Ohio.

Commercial activity tax (CAT)

The Commercial Activity Tax (CAT) in Ohio is an annual tax imposed on the privilege of doing business in the state, measured by a business's taxable gross receipts. There is no minimum tax at this time.

Pass-through entity tax

Ohio has an elective Pass-Through Entity (PTE) tax applicable to income generated through LLCs, S corporations, or partnerships. This tax allows these business owners to effectively bypass the federal $10,000 cap on state and local tax deductions. The PTE tax rate is currently 3%.

Payroll taxes

As an employer in Ohio, you are responsible for various payroll taxes, which include withholding state income tax from employee wages and paying unemployment insurance taxes to the state. 

Unique Ohio tax situations

When conducting business in Ohio, it's important to consider industry-specific and municipal taxes, including sales taxes, payroll taxes, and local income taxes imposed by various cities and villages. To ensure compliance, be sure to research and understand these unique tax requirements and consult the Ohio Department of Taxation and local municipal websites for detailed information.

Federal taxes

In addition to state and local taxes, all businesses must pay applicable federal taxes, including:

• Federal income tax
• Self-employment tax (for sole proprietors and partners)
• Employment taxes (if you have employees), including the Federal Unemployment Tax Act (FUTA tax)
• Excise taxes (for certain industries)

To ensure you understand your federal tax obligations, check out these IRS resources: Publication 334, Tax Guide for Small Business and Publication 583, Taxpayers Starting a Business and Keeping Records.

Tax credits and incentives for Ohio employers

Look for tax credits and other incentives that can help reduce your tax liability and free up funds to invest in your business growth and development. The following are a few to consider exploring:

• The Job Creation Tax Credit: This credit is available to companies able to demonstrate the creation of at least 10 jobs. Applicants must be approved by the Ohio Tax Credit Authority.
• Ohio Opportunity Zones Tax Credit: This credit is ideal for those interested in investing in an economically distressed zone in Ohio.
• Data Center Tax Exemption: A sales-tax exemption rate and term that allow for partial or full sales tax exemption on the purchase of eligible data center equipment.
• Workforce tax credit programs: Employers hiring economically disadvantaged workers can earn federal tax credits under the Work Opportunity Tax Credit (WOTC) program, including up to $2,400 for short-term welfare recipients, $9,000 over two years for long-term public assistance recipients, and up to $9,600 for veterans ($6,240 for tax-exempt organizations).

Visit the Ohio Department of Development for other tax credits that may be available to Ohio businesses.

Step 14: Set up your business bank account

Having a dedicated business bank account helps you maintain clear financial records and simplify tax preparation. Separating personal and business funds protects your personal assets, ensures professionalism, and helps build a solid financial foundation for your business. Here’s how to get started: 

1. Collect all your business paperwork, including your EIN, business formation documents, registrations, permits, and licenses to open your small business bank account. 
2. Choose a bank or credit union that offers products and services you need, whether loan offerings, checking, or high-yield savings accounts. 
3. Establish business credit using a bank credit card for business-related purchases and expenses. 
4. Set up your financial records by selecting the right accounting software for your organization. 
5. Hire a professional accountant well-versed in local tax codes and your industry to help with financial and other bookkeeping services.

Additional resources to get your business started 

There are several state and federal resources that can support your business with guidance, training, potential funding and more. 

State resources

Ohio Small Business Development Centers (SBDC): Offers free consulting and training to help small businesses with growth, development, and planning. 

Ohio Department of Development: Provides resources, grants, and programs to support small business growth and community development across the state.

Ohio Business Gateway: This online portal simplifies business management by providing access to essential state services. It allows businesses to file taxes, register new entities, and manage licenses, helping streamline administrative tasks for both new and existing companies.

Minority Business Development Division (MBDD): Part of the Ohio Department of Development, MBDD supports minority-owned businesses by offering resources like access to capital, certification programs, and networking opportunities. Their goal is to promote diversity and inclusivity in the Ohio business landscape while helping minority businesses thrive.

Federal resources 

Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.

Grants.gov: This centralized platform simplifies the process of searching for and applying for federal grants across various sectors. It also provides grant writing tips and has a Grants Learning Center featuring the basics of grants, eligibility, and more. 

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR programs provide research and development funding to innovative tech companies.

SCORE: SCORE is a national nonprofit organization that partners with the U.S. Small Business Administration (SBA) to provide free mentoring and educational resources to entrepreneurs and small business owners. While not a direct federal agency, SCORE is an independent organization with a network of volunteer business mentors across the United States.   

U.S. Department of Agriculture (USDA): The USDA website lists grants, loans, and other programs and resources for farmers and other businesses serving rural America.

Additional costs associated with starting a business in Ohio

Costs to start a business in Ohio will vary depending on the type of business and industry, required permits and licenses, and other factors. However, starting an LLC or Corporation in Ohio will cost $99, while standard DBA registration is $39 for residents. To determine the remainder of your startup costs, you’ll have to look at your business complexity, needs, inventory, equipment, and other fees and expenses involved. 

Frequently Asked Questions

How long does it take to start a small business in Ohio?

Starting a small business in Ohio typically takes 2 to 4 weeks, depending on various factors such as the complexity of the business structure, the type of permits or licenses required, and how quickly paperwork is filed. Registering a business name and entity with the Ohio Secretary of State can take as little as a few business days if filed online, while obtaining necessary licenses and permits might extend the process.

Does my Ohio small business have to collect sales tax?

If you sell tangible goods, you're required to collect sales tax at 5.75% in Ohio. In some jurisdictions in Ohio, you may have a sales tax rate of 9.55%.

Who must file an Ohio business tax return?

In Ohio, business entities have different tax filing requirements based on their structure. Sole proprietors report their business income on their personal income tax returns and do not file a separate business tax return. However, they may be subject to the Commercial Activity Tax (CAT) if their gross receipts exceed $150,000. Partnerships, LLCs, and corporations must file separate business tax returns and may also be subject to various taxes, including the CAT and local municipal taxes. Business owners should consult the Ohio Department of Taxation for specific filing obligations and compliance requirements.

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