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As the state with the largest economy in the United States, California has a gross state product of $3.16 trillion. More specifically, California small businesses are major drivers of economic growth—responsible for two-thirds of new jobs that employ nearly half of all private sector employees.
With a warm, temperate climate and a booming economy, California offers exciting business opportunities for entrepreneurs and small business owners. If you’re ready to start a business in the Golden State, we’ve put together seven easy steps on how to start a business in California.
Once you’ve got your business idea, create a website to jumpstart your venture.
Need help narrowing down your options? Enter a chat with the Wix Business Launcher, which can help you find personalized business opportunities based on skill match and profitability—plus get you a full market analysis, earning strategies and launch kit for every idea.
Start a business in California in 7 steps
01. Come up with a business idea
The foundation of any business—small or big—a great business idea is precisely how entrepreneurs turn their passion and energy into something tangible. Each detail, from creating a product to providing services to customers, will shape your business, so having a strong idea from the start is key.
An effective business idea is focused on solving a problem or meeting a need in the market. It should be innovative and original, as well as customer-focused, affordable and practical. Unique business ideas work well, in the right context and with solid planning.
Since California is known for its diverse economy, with a strong emphasis on technology, entertainment and tourism, here are a few business ideas that can be successful in the state:
Tech startups: California is home to Silicon Valley, the global center of the technology industry. Starting a tech business in California can provide access to a large pool of skilled workers, investors, and resources. You could also start a consulting business in such an environment.
Online retail: Since California has a large and affluent population, it’s a prime market for online retailers, and a great place to start an online store.
Health and wellness: With a focus on healthy living, there is a huge demand for businesses in the health and wellness sector, like fitness businesses and studios, organic food markets, healthy frozen food businesses, natural products and wellness facilities.
Social media and influencer marketing: California is a hub of entertainment, media and technology, so businesses that focus on social media, digital advertising or influencer marketing can be lucrative.
Environmental services: As a leader in environmental policies and regulations, business ideas that are focused on sustainability, energy efficiency and recycling are perfect for California.
Tourism and travel: California is a popular tourist destination, with a variety of attractions such as Disneyland, Hollywood, and the Napa Valley wine region. Starting a tourism-related business, like a hotel (see our guide on the best hotel website designs), rental property, travel agency or tour company can all be a good fit within the bustling tourism industry. Or consider starting a car wash business, to capitalize on the amount of people that travel to California.
Home services: Known for the high cost of living, residents of California are often willing to pay for home services such as a cleaning (see our guide on how to start a cleaning business), pet-sitting, plumbing (see how to start a plumbing business) and landscaping. These also work well as small town business ideas within this large state.
Whatever business idea you choose, be sure to conduct thorough market research and consult with experts to ensure the viability of a business idea in California.
02. Choose a business type
There are several types of businesses that can be established in California. These include:
The type of business you will start will vary depending on your interests, goals, skills and resources. Here are some types of businesses that have potential for success in California:
Learn more:
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Online businesses
With the rise of e-commerce and the increasing use of the internet, starting an online business can provide a low-cost way to reach a global customer base.
Tip: Use Wix to create an ecommerce website and grow your online presence.
Service-based businesses
Service-based businesses, such as consulting, personal training and graphic design, can be started with little capital and allow for flexibility in terms of location and hours.
Home-based businesses
Starting a business from home can be a cost-effective way to jumpstart your idea and can be operated on a full or part-time basis. This is also ideal for solopreneurs or those working independently.
Dropshipping
Dropshipping is a business model in which an entrepreneur sells products online without having to hold any inventory. According to these dropshipping statistics, ecommerce retailers opting for dropshipping, could earn 50% more than those who rely on onsite inventory.
Franchises
Investing in franchising can provide a proven business model, established brand and support from the franchisor. You can check out franchise opportunities in California to see what kind of business ideas are out there. Learn more about how to start a franchise business.
Virtual business
Virtual businesses like bookkeeping (see how to start a bookkeeping business), event planning and virtual tutoring can be started with minimal resources and you can work with clients remotely.
Mobile business
Mobile businesses like food trucks, mobile grooming or mobile detailing can be started with low overhead costs and can operate in multiple locations.
Niche business
Starting a business in a niche market, such as organic products, eco-friendly products, or gluten-free products can help to differentiate your business and attract a specific customer base.
03. Name your California business
Naming a business or product is an important part of the business planning process. The name you choose for your business communicates how it is differentiated from its competitors, how it will be perceived by potential customers and how it reflects the values and goals of the organization.
When choosing a business name, be sure to consider how the name appeals to the target audience, if it stands out from the competition, if it reflects the company’s values and how easy it is to remember.
Tip: Use a business name generator tool to find your perfect business name. Here are a few business name ideas: Silicon Valley Tech, Hollywood Glam, Golden State Fitness, Pacific Sunrise or The California Kitchen.
Once you’ve thought of your business name, it’s a good idea to research if the relevant domain name is available for your website. In addition, you can California Secretary of State Name Regulations for name compliance guidelines.
04. Write a business plan
A business plan is a document that outlines how a business will be structured and how it will operate. It includes information such as the company's concept statement and mission, goals, objectives, strategies, products or services offered, target market, cost to start a business, startup capital and financial projections. You can think of a business plan as a roadmap that guides the entrepreneur in organizing, launching and running their business.
When starting a business in California, a comprehensive business plan is an essential step as it also provides investors, stakeholders and potential partners with an understanding of the company’s goals and how it intends to reach them.
05. License and register your business in California
Regardless of which state you start your business in, you should always consider local regulations, like how to obtain licensing and permits, tax requirements, intellectual property protection or simply how to comply with employment laws.
In order to specifically register your business in California, here are some essential steps:
Obtaining a California business license and registering with the Secretary of State.
Adhering to state and local tax laws, including sales tax and income tax.
Complying with California labor laws, including minimum wage and overtime pay requirements.
Securing any necessary permits or certifications for the specific industry in which the business operates.
Following California's environmental regulations and consumer protection laws.
Adhering to the state's strict data privacy laws, such as the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA).
Complying with laws related to remote work, such as the California's Assembly Bill 5 (AB5) which regulates worker classification and employment status.
For further information, check the California Department of Tax and Fee Administration.
06. Secure business funding
Raising capital and securing business funding can make all the difference when starting a business. There are several ways to fund a business in California (and how to get a business loan), including:
Personal assets: Many entrepreneurs choose to start by bootstrapping - meaning to use their own savings to start or grow their business.
Friends and family: Entrepreneurs may also turn to friends and family for financial support, either through loans or investments.
Bank loans: Banks and other financial institutions may provide loans to businesses, usually secured by collateral such as real estate or equipment.
Small Business Administration (SBA) loans: The SBA provides loan guarantees to small businesses through participating lenders. Start with the SBA Los Angeles, SBA San Fransisco.
Government grants: The government may provide grants to businesses that meet certain criteria, such as those involved in research and development or those operating in certain industries.
Crowdfunding: Websites like Kickstarter and Indiegogo allow entrepreneurs to raise funds from a large number of people, usually in exchange for a product or service.
Venture capital: Venture capital firms invest in early-stage or high-growth companies in exchange for an ownership stake.
Angel investors: High-net-worth individuals who invest their own money into startups, usually in exchange for equity.
Incubators and accelerators: Business incubators and accelerators provide startups with mentorship, office space, and other resources in exchange for a small equity stake.
When researching business funding options, it's important to evaluate different funding options to find the best fit for your business. Keep in mind that California has a robust startup ecosystem with many resources and opportunities for funding, such as Silicon Valley and Los Angeles, where venture capital and angel investors are present.
07. Create a business website
A business website is an essential tool for entrepreneurs to reach their potential customers and showcase their products and services. A well-crafted website can help establish credibility, build trust with potential customers and provide them with the information they need to make an informed decision about whether to purchase products or services.
When making a website, consider how the site will be designed, promoted and stand out from competitors. You can start by choosing a business website template and customizing it to suit your needs. You’ll also need to select a domain name and web host.
In addition, you’ll want to brand your business and reflect this on your website. This includes visual elements like your logo, brand colors, typography, brand messaging and brand persona. You can read our full guide on how to make a business website to help get started.
Once you’ve launched your business website, be sure to promote it. Create a detailed marketing plan, which may include email marketing or social media campaigns. Part of your marketing strategy should include a mission statement, vision statement, SWOT analysis and clear market research to understand your target audience.
Business examples in California
Check out some California business examples, all with Wix websites that support their endeavors.
The Paper Bakery
Founded by Jackie Treitz, The Paper Bakery is a design collective that creates various branding assets from logos and style guides to pitch decks, social templates, business cards and custom stationery. Treitz also builds websites for clients using Wix, and is the branding creative behind Netflix’s Motel Makeover (you can read her branding advice for more tips). Based in Redando Beach, California, Treitz is able to work remotely with clients all over the world, while setting up her home base in the Golden State.
LUUM Jewelry
A business idea that was born amidst four Canadian friends who all share a mutual love of Palm Springs, LUUM Jewelry uses traditional methods of jewelry making, by transforming noble metals, heirlooms and casting mediums into forged memories. Based in California, the company accepts heirlooms from around the world and ships both locally and internationally.
Weirdoh Birds
With 24 years of experience in the industry, Weirdoh Birds creator Orit Harpaz operates the exclusive interior design brand from her studio in Los Angeles, California. The lifestyle brand offers customers a range of linens, totes, cushions, ceramics, wall coverings and other creative hospitality products. All products can be purchased directly from Weirdoh Birds online shop.
Box and Bow Shop
Located in Brentwood, Northern California, Box and Bow Shop was established by Lauren Rodgers after leaving behind her corporate job in the tech industry to be a full time stay-at-home mom. What started out as a humble home business grew exponentially and eventually Rodgers shifted to a 3000+ sq. ft. commercial warehouse to run her small business. Box and Bow Shop sells curated and custom gift boxes that ship all across the country.
How to start a business in California review
Looking to start a business in a different state? Check out our 8 steps to starting a business in Texas or 7 steps to starting a business in Georgia.
How to start a business in California FAQ
How much does it cost to register a business in California?
It varies on the type of business you wish to start, but generally between $30-$150. This doesn't include other license or necessary permits relating to the type of business you start. All LLC's registered in the state of California must also pay an annual tax of $800 to maintain their registration. You'll also need to factor in the cost of equipment and a staff to get your business off the ground.