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Oklahoma has a long history of entrepreneurship. It’s grown from a string of frontier outposts to one of the country’s most dynamic energy and agricultural economies. It’s a competitive place to start a business, thanks partly to its low cost of living, strong labor force, low taxes, streamlined regulation, and various incentive programs. Here’s how to start a business in Oklahoma in eight steps.
Start a business in Oklahoma
1. Choose a business idea
Every successful business starts with a strong business idea. Coming up with a concept for your project is arguably the most crucial decision you’ll make as an entrepreneur. Determine what you want to bring to market—perhaps a product, a service, or both—then make sure you can answer the following two questions:
- Who is your customer? Have a clear understanding of who you’re selling to. Analyze your target market, a.k.a. your core group of potential customers. Research marketplaces where similar products or services are sold, like Amazon or Wayfair. Will you sell directly to consumers (B2C) or business-to-business (B2B)? Will you operate online, through a brick-and-mortar storefront, or a combination?
- What’s your projected profitability? Every business eventually needs to turn a profit—to make more money than it spends. Factors that may impact your profit potential include pricing, packaging, distribution, and bundling models. Will you offer subscription options? What’s your break-even point—how much do you have to sell to cover your costs?
2. Name your business
Once you settle on a solid business idea, choose an equally reliable business name. A good name is catchy and memorable—it conveys your company’s purpose while appealing to potential customers. Consider the following guidelines when picking an Oklahoma business name:
- Be original. Your business name must differ from any other business name registered in Oklahoma. Use the state’s business entity search tool to see if your preferred business name is available.
- Include certain words. If you’re launching an LLC, your name must contain the phrase “Limited Liability Company,” “Limited Company,” or an abbreviation of these. Likewise, corporation names must have “Association,” “Company,” “Corporation,” “Club,” “Foundation,” “Fund,” “Incorporated,” “Institute,” “Society,” “Union,” “Syndicate,” or an abbreviation thereof. Consult the state statute on LLC naming conventions and corporate name rules for more information.
- Exclude certain terms. Your name cannot include words that might confuse your company with a legitimate government agency, like the FBI or Justice Department. You must obtain approval from state regulators if you want words like “Savings and Loan” or “Bank” in your name.
- Reserve your name. To reserve a business name in Oklahoma, file an application with the Secretary of State’s office, along with the $10 filing fee.
- Adopt a DBA. If you wish to operate your business under a name different from the official name you register with the state, apply for a DBA, or “doing business as,” known in Oklahoma as a trade name or fictitious name (they mean the same thing). To register your assumed name, complete and submit a Trade Name Report and pay the $25 filing fee. Your trade name or fictitious name must comply with the same Oklahoma naming rules as your legal business entity.
- Secure a domain name and social media handles. Reserve a domain name (URL) and social media usernames that align with your business name or DBA. A unique, memorable name helps potential customers easily find your business online.
3. Create a business plan
Any small business can benefit from a solid business plan. Your plan should reflect your goals and describe how you intend to run the company in the near and long term. An effective business plan includes the following elements:
- An executive summary and mission statement
- A detailed company description
- A market analysis
- Your organizational structure
- A list of products or services
- A customer segmentation report
- A marketing plan
- A logistics and operations plan
- A financial plan
You can craft your plan using a free business plan template tailored to meet your specific needs, or consult business plan examples for inspiration.
4. Choose a formal business structure and get started
Determine which legal business structure best suits your new Oklahoma venture. There are four primary entity types to choose from: sole proprietorships, general partnerships, LLCs, and corporations. Each offers different benefits for personal liability, ownership, taxation, and funding. Here’s how they differ:
- Sole proprietorship. A sole proprietorship is the default designation for a US business run by a single individual. Sole proprietorships are taxed as “pass-through” entities, meaning business income is taxed once at the proprietor’s personal-income level. Because there’s no legal distinction between the proprietor and the business, the proprietor is personally liable for most debts or legal damages incurred by the business.
- General partnership. Two or more partners form a general partnership. A general partnership is taxed similarly to a sole proprietorship and is treated like a sole proprietorship in terms of liability—there’s no legal distinction between the partners and the partnership.
- LLC. Limited liability companies (LLC) combine the straightforward taxation method of partnerships and sole proprietorships and the liability protection of corporations. By default, LLCs are categorized as pass-through entities. This means that the business’s income will pass through the LLC and onto its members, so you will avoid double taxation and include this money on your personal tax return. This added layer of liability protection means LLCs are a bit more complex and costly to set up.
- Corporation. Like an LLC, a corporation is an entirely separate legal business entity from its owners, meaning their personal assets are protected in case the company goes bankrupt or is named in a lawsuit. Corporations are distinct in that they can issue stocks to shareholders, which makes it easier to raise funds through investment. However, corporations are subject to corporate taxation, meaning the government taxes both business and personal income of owners and shareholders (the so-called “double taxation” most LLCs avoid).
Obtain a federal employer identification number (EIN)
After choosing a legal structure for your Oklahoma business, apply for a federal employer identification number (EIN) through the Internal Revenue Service (IRS), free of charge. An EIN is a nine-digit number assigned to businesses by the IRS for tracking tax obligations—like a Social Security number for companies. An EIN can also help you secure a business credit card and bank account.
Incorporating in Oklahoma
To formally establish your business as a corporation or LLC in Oklahoma, you will need to file specific formation documents with the Secretary of State’s office:
Consider also opening a business bank account. Though it’s not required, the IRS recommends that all small business owners maintain separate bank accounts for personal and business expenses.
5. Obtain business licenses and permits
There’s no general business license required to conduct business in Oklahoma. However, if you operate in certain industries or conduct specific business activities, you may be required to acquire licenses or permits. Such fields include landscaping services, business consulting, computer and IT consulting, and car repair services.
If you sell goods or services at retail, you must obtain a sales tax permit from the Oklahoma Tax Commission. The sales tax rate in Oklahoma is 4.5%.
6. Examine business insurance options in Oklahoma
Unexpected losses can be catastrophic for small businesses. While some business structures like corporations and LLCs offer a degree of personal asset protection, you may still want to purchase business insurance to cover your products, vehicles, and other property. Mandatory and optional business insurance policies include:
- Workers’ compensation insurance. Oklahoma law requires all businesses with employees, full and part time, to purchase workers’ compensation insurance. Workers comp covers a portion of lost wages, medical bills, disability, and death benefits in case of workplace accidents, and protects employers from any related lawsuits.
- General liability insurance. General liability insurance covers some financial losses (like no-fault property damage) and injuries in the workplace (like a customer slip-and-fall). While Oklahoma does not require local businesses to carry this policy, you may be required to purchase it to lease commercial space, like a storefront.
- Professional liability insurance. Professional liability insurance—also known as errors and omissions insurance—provides coverage for any damages due to claims of negligence or misconduct. Professional liability insurance can shield you from costs if you make a mistake or are perceived to have made a mistake, and your client suffers a loss and sues you. This is typical coverage for law firms, real estate agencies, and medical offices.
- Business Owner's Policy. A business owner’s policy (BOP) bundles multiple policies into a single insurance package. These packages often come at lower rates than the same policies purchased separately. The specifics vary based on your business’s needs and your insurance provider’s offerings.
The federal Small Business Administration maintains a list of more insurance policies your new Oklahoma business may need.
7. Understand financial considerations
On top of buying insurance, you’ll likely have to make other investments to set up your Oklahoma business, including renting a brick-and-mortar retail space or warehouse, setting up a professionally designed business website, and purchasing ads, equipment, and software. You may also want to hire lawyers, accountants, publicists, and other professionals to support your endeavors.
These early costs can quickly add up. Thankfully, resources are available to help you get your hands on startup funding. Oklahoma offers a variety of incentive and financial assistance programs for new businesses. Federal development resources are available through the US Small Business Administration (SBA), which has a district office in Oklahoma City. There’s also Shopify Capital, which offers fast funding and flexible payments.
Don’t forget to set up a business bank account to handle startup costs and cash flow.
8. Market your business
Creating a solid marketing strategy helps raise awareness of your business and your brand. Your marketing plan might include the following elements:
- Market research. Thorough market research is the key to understanding your target audience and customers. It can also help you stand out from your competition.
- Advertising. Design and purchase or get for free, print or digital ads. You can do this yourself or hire an agency to do it on your behalf.
- Social media. Most successful businesses today maintain a social media presence on platforms like Facebook, Instagram, YouTube, and TikTok. Consistently publish content that aligns with your brand to boost customer engagement.
- Public relations. Identify and cultivate relationships with media outlets, print, digital, and broadcast—in Oklahoma and across the US—to help organically increase your visibility.
Customer retention. Build genuine relationships with customers that keep them coming back—and spreading the word to friends, family, and colleagues.
Start a business in Oklahoma FAQ
Is Oklahoma a good place to start a business?
Oklahoma’s low cost of living, strong labor force, low taxes, and various small business owner incentive programs make it an attractive place to start a business.
How much does it cost to start a business in Oklahoma?
Setting up an LLC or corporation in Oklahoma costs at least $50 to $100, which covers incorporation fees. Corporations and LLCs also must file annual reports with the Secretary of State’s office, with filing fees of $25 for LLCs and .125% of every $1,000 in revenue for corporations. There’s also a $10 fee to reserve your business name and $20 to apply for a sales tax permit.
Does Oklahoma require a business license?
Oklahoma does not require a general statewide business license, but retailers must obtain a sales tax permit. Certain business activities—such as landscaping or IT consulting—are subject to additional licensing requirements.