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

Have you ever dreamed of starting your own business in the Evergreen State? Washington State is home to some of the world's biggest companies, including Starbucks, Amazon, and Microsoft. All those companies had to start somewhere — and you could be next. Whether you're looking to launch a tech startup, open a boutique, or create a farm-to-table restaurant, Washington offers fertile ground for inspiring entrepreneurs like yourself to thrive. In this guide, we’ll show you how to start a business in Washington in 14 steps. You’ll learn how to choose the right business structure, secure funding, open a business bank account, and more.

Why start a business in Washington in 2025?

Washington state has a strong economy and fosters a supportive environment for startups and small businesses. In fact, over 657,000 small businesses call the state home. Perhaps one of the most attractive reasons for running a small business in the state is that Washington doesn't collect franchise tax or corporate income tax, nor does it levy personal income tax. In other words, your revenue will stretch further if you invest it in a Washington business entity. Use this comprehensive guide to learn all about starting a business in Washington state.

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

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

Choosing to open and operate your own company in Washington allows you to follow in the footsteps of famous business owners such as Jeff Bezos. Remember: Amazon started as a small company that was run out of a garage, and now it's worth $1.9 trillion. Whether you decide to open your business in Seattle, Tacoma, Bellevue, or a more rural part of the state, these steps will provide you with tailored insights and small business resources to help turn your idea into reality.

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

Decide on the type of industry that best fits your vision. Carefully consider your personal skill set, interests, and passions, as this will help shape your business idea and make running your company more enjoyable and rewarding. It's also important to research local trends and look for any gaps in products or services. For example, a rural town like Chewelah might lack a fitness center, a bookstore, or a niche restaurant, creating opportunities for you to step in.

Ready to start brainstorming? Explore small business ideas to get the ball rolling.

Step 2: Conduct research on your business’s industry

Start researching once you've narrowed down your general concept. Conduct a competitive analysis and market research to help you identify opportunities, avoid pitfalls, and figure out your target audience. Let's say you want to open a bookstore in rural Snohomish. You'll need to figure out what other bookstores will be closest to you, who your target market is, and how large of a space you'll need.

Step 3: Create a business plan

Create a detailed business plan. Your business plan shouldn't merely contain your company's proposal. Instead, outline everything you'll need to get started, including your company concept, marketing strategies, target market, funding needs, and financial projections. Ultimately, your plan will help define your goals, make it easier to get financing, and even attract potential investors.

Let’s take a look at what every business plan needs to include:

• Executive summary: Offer a concise overview of your business, including its purpose and key objectives.
• Company description: Highlight your mission statement, provide a brief background of your business, and outline its core goals.
• Market research and potential: Examine your target audience, current industry trends, and the potential for growth in your market.
• Competitive analysis: Evaluate your competition, pinpoint their strengths and weaknesses, and explain what makes your business stand out from those competitors.
• Products and services: Describe the goods or services you plan to offer and emphasize their value to customers.
• Marketing and sales: Detail your plan for attracting customers, building brand loyalty, and growing your sales over time.
• Business financials: Present projections, such as profit-and-loss statements, cash flow estimates, and revenue forecasts.
• Management and leadership: Point out the experience and expertise of your team.
• Funding request: State the amount of funding you’re seeking and how you’ll use these funds.
• Appendix: Include any relevant materials, such as detailed market analysis, financial spreadsheets, or key agreements.

Don’t rush this process. Take your time to ensure your plan is comprehensive and well-organized since you’ll use this as a guiding light for your business’s growth and success. Use a free business plan template and contact the Washington Small Business Development Center for no-cost business advice.

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

Select the appropriate business structure type. After all, the type of business entity you start will determine your personal liabilities along with the ownership of your business. Here are the most common types of business structures:

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: Washington small business funding, loans, and grants

Plan how you’ll secure funding for your venture. Startup costs can vary, but most businesses will need to apply for a general state business license, which costs $90. Depending on your industry, business structure, and location, you may also have to factor in other expenses like business registration fees, local permits and licenses, equipment, inventory, utilities, and rent. Collectively, these costs can easily enter the five-digit range, so having a solid funding strategy is key. 

Fortunately, you can explore different ways to secure funding for your Washington business entity, including self-funding, small business loans, small business grants, and SBA loans:

You should also look into state-specific funding opportunities, including:

Washington State Department of Commerce

The purpose of the Department of Commerce is to grow the economy and strengthen communities. Check their open grants, loans, and RFPs to see what type of funding you may be eligible for.

Community Development Financial Institutions (CDFIs)

CDFIs exist to provide people with financial services and products to promote economic development. The 26 CDFIs in the State of Washington have awarded more than $42.3 million to qualified businesses since 1996.

Economic Development Councils (EDCs)

Small and growing businesses in Washington can receive capital through their EDCs. Programs include the Small Business Credit Initiative, Export Voucher Program, and Brownfields Revolving Loan Fund.

Washington State Department of Commerce grants

The Department of Commerce Grants offers grants to small businesses. There are several options, including the Associate Development Organization and Small Business Flex Funds.

Washington State Microenterprise Association (WSMA)

Will your business have no more than five employees? If so, the WSMA could be perfect for you. They provide grants to microenterprises to help your business become a success.

Economic Alliance Snohomish County (EASC) grants

The EASC is a catalyst for local economic growth. Snohomish County is Washington's third-most-populated county, and they are looking for innovative people to join them. For instance, you can take advantage of county and city tax incentives to reduce your business expenses.

Seattle Office of Economic Development (OED)

Seattle's OED is invested in assisting businesses with grants. They are especially interested in helping with recreation, youth programs, and the arts, although they also offer grants to Seattle-based small businesses.

Tacoma Economic Development Services

The Tacoma Economic Development Services seeks to invest in the future of the private sector. They offer a Small Business Loan Program that can help you launch your Tacoma-based business or rehab your company's building.

Minority- and women-owned business grants

If you're a woman or a member of a minority group, check out the many awards, prizes, grants, training, and counseling opportunities available in the State of Washington.

Step 6: Choose your Washington business name and Washington DBA

Choose a unique, memorable name for your business, especially if you’ll not be using your full legal name. You'll be required to choose a trade name — or DBA (doing business as) name — and register it with the Washington Department of Revenue. For example, if your name is Riley Taylor but you'll be operating under the name Riley's Bookshop, then you'll be DBA Riley's Bookshop.

Make sure you research your chosen name to ensure no one else is already using it in Washington State. That way, you can avoid consumer confusion and any potential legal issues.

Reserve your business name

You can reserve your chosen business name with the Office of the Secretary of State. It’ll cost you $20 to $30. If the name you chose is already taken, you won't be able to use it.

Filing a trade name

File a trade name through the Department of Revenue. Your registration will last until you submit cancellation paperwork. The trade name is $5.

Step 7: Pick a business location in Washington

Select your business location. It’s one of the most important things you'll ever do because your location impacts everything from taxes to licensing and permitting to customer and employee accessibility. Doing market studies and extensive research is an absolute must. After all, a bookshop might do well in Seattle but fail in Winthrop. You may also want to consider running your business from home, especially if you’re in e-commerce or offer services that don’t require a physical storefront. It can help reduce overhead costs like rent, utilities, and commuting. 

However, if you’re looking for a space in a metropolitan area, consider these major cities in Washington:

Seattle

Seattle stands out as the premier destination for entrepreneurs, as Forbes ranks it the number one place to start a business. The city boasts thriving industries in information technology, aerospace, and retail, contributing to an economic growth rate that is three times higher than the national average.

Vancouver

Vancouver is emerging as a top spot for entrepreneurs, with thriving industries in education, financial services, tech, hospitality, and healthcare. The city offers numerous business funding opportunities, making it an attractive destination for startups. Vancouver's growing population and rising income levels further enhance its appeal for new businesses.

Spokane

With key industries in the wholesale and retail trade, services, education, medical fields, and entertainment, Spokane is becoming a vibrant hub for entrepreneurs. The eastern Washington city experienced approximately a 2% employment growth in 2023. The technology sector is also steadily expanding, adding to the city's dynamic business environment, 

Tacoma

Tacoma is an exciting location for starting a business, with thriving industries in healthcare, military, finance and insurance, government and education, trade and logistics, and aerospace. The city is currently experiencing a population boom, contributing to its vibrant and growing market. However, it's important to note that South Tacoma's poverty rate is higher than the state average, highlighting areas that may benefit from targeted business initiatives.

Step 8: Find a Washington registered agent

The State of Washington requires that you have a registered agent for your company. This means that you must find a registered agent with a permanent Washington address to accept legal notices on your behalf. Alternatively, you can act as your own agent if you're 18 or older, available during your company's business hours, and have a Washington address. There are two different types of registered agents: Commercial Registered Agent (CRA) and Non-Commercial Registered Agent. A CRA can easily be found via a public list.

Step 9: Get a Washington 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 Washington 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 Washington

Register your small business via the Washington Secretary of State. Don't forget to obtain your EIN. Make sure to follow the specific rules listed below for your type of business entity.

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

The basic cost of registering for your business license is $90. However, additional fees and permits may make the total cost as high as $850.

To apply, begin with the Business Licensing Wizard. Then, either fill out and submit all the forms or print them out and mail them in. Be aware that completing this process online will take between 10 and 21 days. If you mail your application, the process may take up to six weeks.

Certain business types will need to apply for a business license and additional licenses and/or permits, including:

• Liquor license
• Cannabis license
• Reseller permit

Do you need a business license in Washington?

Almost every type of business will need a license to operate in Washington. The few exceptions include:

• Religious or nonprofit organizations
• Minors doing lawn mowing, babysitting, lemonade stands, newspaper delivery, etc.
• Common carrier delivery of services and goods
• Private ambulance operators
• Businesses that don't hit $2,000 annually
• Gardeners or farmers selling their own produce
• Businesses that make isolated or casual sales

If you’re starting a business and still unsure what licenses or permits you need, contact the Department of Revenue.

Step 12: Secure insurance for your Washington small business

Protect your business and assets with the right insurance coverage. The State of Washington requires business owners to carry workers' compensation insurance. Every other type of insurance is optional although not getting a policy could end up costing you much more in the end. For peace of mind, it's always best to add at least general liability insurance.

Here are common types of Washington small business insurance:

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

Make sure you understand all your state and federal tax obligations. If your company involves a sole proprietor, single owner, partnership, or multiple owner LLC, you're required to make estimated tax payments on April 15, June 15, Sept. 15, and Jan. 15. Otherwise, you must file on March 15 or, if you're using a fiscal year, on the 15th of the third month after the fiscal year ends.

Review each of the following types of Washington business taxes to learn more about how to start a business in Washington.

Business and occupation (B&O) tax

Your tax rate will vary, depending on your classification. Payments may be due monthly, quarterly, or annually.

Sales and use tax

Your tax rate varies. It’s based on the location of your sale. You can go through the Department of Revenue to look up the rates in your area.

Employer withholding tax

Washington state doesn’t have a personal income tax, so there is no state-level employer withholding tax.

Other unique Washington tax situations

There is a leasehold excise tax that is set at .1284 of the total rent. Additionally, there is a litter tax rate of .00015 that applies to 13 different categories, such as groceries and metal containers.

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 Washington employers

Washington offers a variety of tax incentives and credits to businesses. Find out if your company is eligible at the Department of Revenue.

Step 14: Set up your business bank account

Open a small business bank account. This will help separate your personal and business expenses so you can easily track cash flow and maintain accurate records for your company. Follow these steps:

1. Gather all necessary paperwork, such as your EIN, business formation documents, registrations, permits, and licenses, to streamline the account-opening process.
2. Select a bank or credit union that offers the products and services your business needs, such as business checking, high-yield savings, or loan options.
3. Get a business credit card to manage business-related purchases and expenses while establishing credit for future financial opportunities. 
4. Use accounting software tailored to your business to manage transactions, monitor cash flow, and simplify tax preparation. 
5. Work with a qualified accountant familiar with local tax regulations 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

Washington State Department of Commerce: This department provides valuable resources, from business development to state incentives. You can also find help with exporting, clean energy programs, and more.

Business.wa.gov: This website walks you through state registration, licensing, and reporting requirements. Plus, you'll find resources on business planning, financing, and training programs.

Washington State Department of Revenue: This department offers guidance on tax registration, reporting, and getting business licenses. You can also find workshops and detailed guides to help you understand your tax obligations.

Impact Washington: Impact Washington supports manufacturers by offering advice on improving efficiency, reducing waste, and scaling operations. Their team can help you adopt the latest technology, develop your workforce, and grow your business.

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.

Frequently asked questions

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

The typical period to open a small business in Washington is between 10 and 90 days. Begin this period by filing a business license application via the Department of Revenue.

How to start an LLC in Washington?

Starting an LLC in Washington requires the following steps:

1. Choose a name.
2. Select a registered agent.
3. File your certificate of formation.
4. Comply with WA LLC regulatory and tax requirements.

How much does starting a Washington LLC cost?

The fee to start an LLC is $180 by mail, or $200 online. You can get expedited processing for an additional $50. It costs $30 to reserve your LLC name.

Disclaimer: 

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