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

Ready to take on the excitement, challenges, and rewards of starting a small business in Vermont? Our guide will help you navigate the path to starting your business in the Green Mountain State, from coming up with a business idea to dealing with registration, permits, taxes, and more.

Why start a business in Vermont in 2025?

Vermont's well-educated workforce, community spirit, favorable tax laws, and great infrastructure make it a prime spot to start a business. It also features some of America’s most beautiful landscapes, creating a thriving business in tourism and outdoor activities. With so many small towns and tight-knit communities come small businesses. According to the U.S. Small Business Administration’s Office of Advocacy, 99% of Vermont companies are small businesses and over 61% of its workforce is employed at small firms. Our business guide can help you learn how to start a business in Vermont and take advantage of everything this state has to offer. 

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

• 14 steps to starting a business in Vermont
• 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 Vermont
• Step 5: Secure funds: Vermont small business funding, loans, and grants
• Step 6: Choose your Vermont business name and Vermont DBA
• Step 7: Pick a business location in Vermont
• Step 8: Find a Vermont registered agent 
• Step 9: Get a Vermont EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in Vermont 
• Step 11: Register for your business license and permits in Vermont
• Step 12: Secure insurance for your Vermont small business 
• Step 13: Prepare to pay taxes on your business in Vermont
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions 

14 steps to starting a small business in Vermont

Starting a small business in Vermont involves several steps, each crucial for ensuring your venture's success in Vermont’s vibrant community of small entrepreneurs. This section will guide you through the preparation process specific to Vermont, from deciding on your industry to creating a solid business plan, and we’ll also provide small business resources that can help you on your journey.

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

Choosing the right industry for your business is a critical first step. Vermont's economy is diverse, with opportunities in various sectors such as agriculture, tourism, technology, and healthcare. Consider what industries align with your skills, interests, and market demand. Research local market trends and identify gaps that your business can fill.

Most importantly, network with local business owners and attend industry events to gain valuable insights into the best industry for your startup. You can also seek guidance from organizations such as the Vermont Small Business Development Center. For even more ideas to fuel your brainstorms, look through some small business ideas and research anything that appeals to you.

Step 2. Conduct research in your business’ industry

Once you've identified a potential industry, gather data on your competitors, target audience, and market trends. Utilize resources like the Vermont Chamber of Commerce and local industry associations to gain insights into the challenges and opportunities in your chosen industry. 

As an aspiring business owner, it’s important to conduct a competitive analysis to help you better understand the competitive landscape and consumer preferences. The results may be surprising and require you to adjust your initial business idea, so try to be flexible and approach the process with an open mind.

Step 3. Create a business plan

A well-crafted business plan is your roadmap to success. It outlines your business goals, strategies, target market, and financial projections. Plus, it’s essential for securing funding from local banks and investors, so take the time to flesh out your plan and consider every detail.

Your business plan should include most or all of these elements: 

• Executive summary: Provide a concise overview of your business and its goals.
• Company description: Detail your company's mission, history, and objectives.
• Market research and potential: Analyze your target market and industry trends.
• Competitive analysis: Assess your competitors and your unique advantages.
• Products and services: Describe your offerings and their benefits.
• Marketing and sales: Include your strategies for reaching and retaining customers.
• Business financials: Make financial projections, including income statements and cash flow forecasts.
• Management and leadership: Share an overview of your team's expertise and experience.
• Funding request: Detail your funding needs and how you'll use the funds.
• Appendix: Add supporting documents, such as market research data or financial statements.

Free business plan templates are available online and make it easy to get started. The Vermont Small Business Development Center offers several plan templates, as well as other resources for small entrepreneurs.

Step 4. Choose your business entity: Types of business entities in Vermont

Selecting the right business entity is crucial as it affects your taxes, liability, and management structure. Here's a brief overview of the most common business structures in Vermont:

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)

A hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership. Learn more about LLCs.

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

Securing funding is a critical step in starting your business. Vermont offers various funding options, including loans, small business grants, and investor financing programs. Here are some common funding options for Vermont entrepreneurs:

In addition, take some time to check out state-level funding resources for your small business, including:

Vermont Economic Development Authority (VEDA) Loans

VEDA offers various loan programs to support business growth. You can use these loans for working capital, equipment purchases, and real estate investments.

Vermont Agency of Commerce and Community Development Grants

The Vermont Community Development Program offers various grants to support business development and job creation in the state. 

Vermont Women’s Fund Grants

The Vermont Women's Fund supports women-led businesses and initiatives. It also includes an interactive database of funding opportunities for women to explore.

Vermont Sustainable Jobs Fund

The Vermont Sustainable Jobs Fund offers grants and resources for businesses that contribute to eco-friendliness and local economic development, including agri-business, clean energy, and sustainable food systems.

Step 6. Choose your Vermont business name and Vermont DBA

Select a unique and memorable business name. In Vermont, you can reserve your business name and file a DBA (Doing Business As) if you plan to operate under a different name.

Reserve your business name

It's important to choose a unique, available business name because it will represent your brand and differentiate you from other enterprises. Conduct a name search using the Vermont Secretary of State's online database to ensure your preferred business name is not taken. Then, file an application to reserve it.

Filing a fictitious business name (DBA) in Vermont

A DBA, or "Doing Business As," is required in Vermont if your business operates under a name different from your legal name. It applies to all types of business structures.

The process starts with checking for name availability by searching the Vermont business name database. Next, register your DBA directly on the Vermont Secretary of State's website or request a paper form online. You will also have to pay a $70 registration fee. 

In Vermont, a DBA registration is valid for five years. To renew it, you must file a reregistration return and pay a $65 fee. 

Step 7. Pick a business location in Vermont

In a beautiful state like Vermont, it’s hard to go wrong with any location, but there are some prime areas of economic opportunity that new business owners should consider. Don’t forget to read up on the laws and regulations of your chosen area first, especially if you’ll be operating your business from your home since some jurisdictions don’t allow it.

From the (relatively) big cities like Burlington to the idyllic ski towns like Stowe, your business has plenty of choices. Here are a few:

Burlington

Burlington is Vermont's largest city, popular for its vibrant economy and cultural scene. Its bustling downtown area has numerous shops, restaurants, and entertainment options. Burlington is an ideal location for retail, hospitality, and technology businesses.

Montpelier

Montpelier is the state capital, so it offers a unique business environment with easy access to state government resources. It’s an excellent choice for businesses in consulting, legal services, and public relations. At the same time, it has a small-town feel with a strong sense of community.

Rutland

Known for its manufacturing and healthcare sectors, Rutland offers a strong industrial base and access to medical facilities. It also has a growing arts and culture scene, making it an attractive location for businesses in these industries.

Stowe

Stowe is a premier tourist destination with opportunities in hospitality and retail. The city attracts visitors year-round with its ski resorts, outdoor activities, and scenic beauty.

Brattleboro

Brattleboro offers a vibrant arts scene and a supportive community for small businesses. It’s also known for its sustainability initiatives and has a strong focus on promoting local businesses. 

Middlebury

Home to Middlebury College, the city of Middlebury offers opportunities in education and local commerce. Its diverse population makes it easier to have a niche business that caters to specific demographics.

Additional considerations:

• Proximity to customers and suppliers: Factor in the location of your target market and suppliers. Being close to your customers can help with marketing and establishing a personal connection, while having reliable access to suppliers can lower costs and improve efficiency.
• Tax rates and incentives: Research local and state tax rates, as well as any available tax breaks or incentives for your industry. This can help lower your overall operating costs and make the location more financially viable.
• Regulations and permitting: Identify any specific regulations or permits required for your business type in the chosen location. If there are complex or lengthy processes, it may impact your ability to start and operate your business smoothly.
• Quality of life: Evaluate factors like housing costs, commute times, and amenities that may impact employee recruitment and retention. A location with a high quality of life can help attract and retain top talent for your business.

Step 8. Find a Vermont registered agent

A Vermont registered agent must have a physical address in the state and be available during business hours for easier and quicker access to legal documents. This ensures that your business can be contacted for legal matters, compliance notifications, and official correspondence.

Only an individual resident of Vermont or a business entity authorized to do business in the state can serve as a registered agent. You can choose to be your own registered agent, appoint an employee, or hire a professional registered agent service.

Step 9. Get a Vermont 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 Vermont 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 Vermont

Registering a small business in Vermont involves obtaining appropriate state licenses and permits, including a business license and any special permits or certifications required for your specific industry. Here are the requirements and applicable fees for common business structures.

Step 11. Register for your business license and permits in Vermont

Like every other state, Vermont requires certain types of businesses to obtain licenses and/or permits before they begin operating. Many businesses will also have to obtain a general business license from their local jurisdiction. Let’s take a quick look at some of the most common licensing and permitting requirements for small businesses in Vermont.

Do you need a business license in Vermont?

Most businesses in Vermont are required to obtain a business license from the city or county where they operate. This ensures compliance with local regulations, including zoning, safety, and health standards. Some businesses might also need state-level permits depending on their industry. It’s essential that you review all your industry requirements before starting your business.

Examples of common business licenses and permits in Vermont

• Sales tax license: This is required for businesses selling tangible personal property or taxable services. Review the steps to getting started on the Vermont Department of Taxes website.
• Health permits: These are necessary for businesses in the food service industry, such as restaurants and food trucks. The local health department issues these permits.

• Professional licenses: These are required for professionals in certain fields, such as healthcare, legal, and financial services. These licenses are obtained through the Vermont Office of Professional Regulation.
• Building and zoning permits: These permits are needed for businesses involved in construction or those making significant alterations to their premises. These permits are issued by local city or county planning departments.
• Liquor license: This is required for businesses that manufacture, sell, or distribute alcoholic beverages. This license is obtained from the Vermont Division of Liquor Control.
• Environmental permits: These permits are necessary for businesses that may impact the environment, such as waste management or manufacturing facilities. The Vermont Department of Environmental Conservation issues these permits.

Step 12. Secure insurance for your Vermont small business

Insurance is a vital safety net for your business. It protects your company from unforeseen risks and ensures that you can continue operations even in challenging times. Here's an overview of common types of business insurance in Vermont.

In addition, you’ll want to find out whether your business is required to obtain any type of specialty insurance. For example, businesses that manufacture, sell, or serve alcoholic beverages in Vermont must obtain liquor liability insurance. This coverage protects against claims resulting from alcohol-related incidents, such as injuries or property damage.

Step 13. Prepare to pay taxes on your business in Vermont 

Understanding your tax obligations is crucial for maintaining compliance and avoiding penalties. It is one of the key responsibilities of being a business owner in Vermont.

Sales tax 

Sales tax is imposed on the retail sale of tangible personal property and certain services in Vermont. The rate varies depending on the location, with a state tax rate of 6% and additional local taxes ranging from 0-1%.

Excise tax

Excise tax is levied on specific goods such as tobacco and alcohol. It is meant to regulate the consumption of these items and generate additional revenue for the state. The rates vary depending on the product.

Use tax

Use tax applies to goods purchased outside Vermont but used within the state. It aims to level the playing field for in- and out-of-state sellers, ensuring fair competition.

Corporate income tax

Vermont does not have a specific franchise tax, but businesses, particularly corporations, are subject to state corporate income tax based on their net income. The current corporate income tax rate is 8.5%.

Payroll taxes

Employers must pay federal and state payroll taxes, including Social Security, Medicare, and state unemployment insurance (SUI). These taxes support social programs that ensure a safety net for employees. 

Property tax

Businesses owning real property in Vermont are subject to local property taxes. The rate and amount vary by county and municipality. Property taxes fund local services such as schools, police, and infrastructure, making them essential for community development.

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 Vermont employers

Tax credits and incentives can potentially lower the tax burden for business owners in Vermont. Here are a few that may be available to you. 

• Vermont Employment Growth Incentive (VEGI): The VEGI program provides cash payments to businesses that meet job creation and payroll targets. It is an incentive that supports economic development by encouraging businesses to expand their workforce and increase payroll.
• Research and Development Tax Credit: Vermont offers a tax credit for qualified research expenses, encouraging innovation and technological advancement. Eligible businesses can claim up to a 27% credit against their corporate income tax liability.

Step 14. Set up your business bank account

As a business owner, you’ll need to open a separate business bank account to manage all your finances. 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 

Looking for more funding options, business counseling, training opportunities, or other services to help your business get a leg up? These resources can help.

State resources

• Vermont Business Services Division: This all-in-one portal provides a convenient location for Vermont businesses to register with the state, search for business names, and keep up with other essential tasks.
• Vermont Small Business Development Center (VtSBDC): The VtSBDC provides small businesses with financial planning assistance and access to capital. They offer workshops, one-on-one counseling, and tools to help you secure funding.
• Vermont Economic Development Authority (VEDA): VEDA offers various loan programs to support business growth. You can use these loans for working capital, equipment purchases, and real estate investments.
• Vermont Women's Fund: The Vermont Women's Fund supports women-led businesses and initiatives through financial grants. It also includes an interactive database of funding opportunities for women to explore.
• Vermont Sustainable Jobs Fund: The Vermont Sustainable Jobs Fund offers grants and resources for businesses that contribute to eco-friendliness and local economic development. This encompasses agri-business, clean energy, and sustainable food systems.
• Vermont Agency of Commerce and Community Development: The Vermont Agency of Commerce and Community Development offers various grants to support business development and job creation in the state. These include the Vermont Training Program, which provides funding for employee training, and the Vermont Downtown Program, which offers grants for downtown revitalization projects.

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. 

Disclaimer:

This content is for information purposes only and information provided should not be considered legal, accounting or tax advice or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.