West Virginia, from its mountain towns to its bustling university centers in Morgantown and Huntington, has much to offer new entrepreneurs. West Virginia currently boasts the lowest cost of doing business of all US states. It is also centrally located at the crossroads of three distinct regions—the Northeast, Midwest, and South—making West Virginia a major supply and transit hub. This step-by-step guide will introduce you to all the state of West Virginia has to offer when it comes to starting a business.
Start a business in West Virginia
1. Choose a business idea
The first step toward taking advantage of all the exciting opportunities West Virginia has to offer its small business community is to select a business idea. A solid concept lays the foundation for your venture—in West Virginia and elsewhere. Think about whether you want to sell a product, service, or a combination of both. You might improve upon an existing market offering or come up with something entirely new. Regardless, consider these factors before getting to work:
- Who is your customer? Identify your target customer, because that profile will inform your service or product development more than anything else. Analyze businesses and marketplaces where similar products or services are sold (like Amazon or Wayfair), and research industry trends. Will you sell business-to-business (B2B) or directly to consumers (B2C)? Online or through a traditional storefront?
- What is your projected profitability? A business must turn a profit in order to survive. Businesses in West Virginia are no exception. Variables that can impact your profitability might include pricing, packaging, distribution, and bundling models. Will you offer subscription options? What’s your break-even point? Or, how much do you have to sell to cover your costs?
2. Name your business
Once you’ve settled on a business idea, it’s time to pick out a name. Coming up with a suitable, memorable name is one of the most important decisions you’ll make as an entrepreneur. A good name effectively conveys your company’s purpose while simultaneously appealing to a customer’s sensibilities. Some guidelines when selecting your West Virginia business name include:
- Be original. Your West Virginia business name must be entirely unique from any other business currently registered with the state. You can search a database of currently registered West Virginia businesses on the Secretary of State’s website.
- Include correct suffixes. A West Virginia LLC must contain in its name the words “Limited Liability Company” or “Limited Company,” or an abbreviation of either (L.L.C., LLC, L.C., or LC). A West Virginia corporation’s name must contain the words “Corporation,” “Company,” “Incorporated,” or “Limited,” or an abbreviation of any of these (Co., Inc., or Ltd.). For more details on what you must include in your West Virginia business name, visit the state legislature’s website.
- Exclude certain terms. Your West Virginia business is restricted from containing certain words and terms in its name, such as “911,” or words that suggest belonging to certain regulated fields, like banking, engineering, or insurance, if your business does not engage in these activities. For more information on what you may not include in your West Virginia business name, visit the state legislature’s website.
- Reserve your name. To reserve a name in West Virginia, you are required to submit an Application for Name Reservation to the Secretary of State’s office, and pay a $15 filing fee. Sole proprietorships may not reserve business names in West Virginia.
- Secure a domain name and social media handles. Potential customers should be able to find you easily online. When deciding on a business name, check to see if a relevant domain name (URL) is available, then reserve social media usernames that align with your business name or DBA.
Adopting a DBA in West Virginia
If you want to operate under a different name than the business entity you registered with the state, you must file for a DBA, or “doing business as.” Your DBA must adhere to all West Virginia business-naming rules. You can then submit an Application for Trade Name (DBA) to the West Virginia Secretary of State’s office, and pay a $25 filing fee.
3. Create a business plan
Every small business owner needs a business plan on hand. Your business plan should reflect your business’s overall goals and give potential investors or partners a sense of how you intend to run the company in the near and long term. A good business plan contains the following:
- Executive summary
- Mission statement
- Detailed company description
- Market analysis
- Organizational structure
- List of products or services
- Customer segmentation report
- Marketing plan
- Logistics and operations plan
- Financial plan
4. Choose a business structure
Before formally establishing your business in West Virginia, you’ll need a legal structure for it. There are four primary types of businesses available to business owners in West Virginia: sole proprietorships, general partnerships, LLCs, and corporations. Each offers different benefits for personal liability, ownership structure, taxation, and funding opportunities. Here’s how they’re distinct:
- Sole proprietorship. Sole proprietorships are owned and run by a single person. They are the default designation for individual-run, freelance businesses in the US. Since there’s no legal distinction between the proprietor and the business, both are taxed as “pass-through” business entities, meaning earnings are taxed one time at the proprietor’s personal-income rate. The owner is also personally liable for most debts and legal damages incurred by the business. Sole proprietorships and partnerships pay federal self-employment state taxes as well (15.3%). There are no fees or registration requirements to set up a sole proprietorship.
- General partnership. General partnerships are formed by two or more partners and are taxed similar to sole proprietorships. Like sole proprietors, there’s no legal distinction between a general partner and the business.
- LLC. A limited liability company (LLC) is formed by one or more owners, known as “members.” Like partnerships and sole proprietorships, LLCs can elect to be taxed as pass-through entities. LLCs differ from sole proprietorships and partnerships in that they enjoy a degree of liability protection. This is because the LLC is considered a separate legal entity from its members. This added layer of protection makes LLCs a bit more complex and costly to set up than sole proprietorships or general partnerships.
- Corporation. A corporation is a separate legal business entity from its ownership, like an LLC. This means owners’ personal assets are protected in case the company goes bankrupt or faces one or more lawsuits. Corporations differ from LLCs in that they can issue stocks to shareholders in exchange for a business ownership stake. Corporations are also subject to corporate taxation, meaning the government taxes business income as well as the personal income of its owners and shareholders. The corporate tax rate in West Virginia is presently 6.5%.
Obtaining a federal employer identification number (EIN)
Once you’ve decided on a structure for your West Virginia business, you may next apply for a federal employer identification number (EIN) through the Internal Revenue Service (IRS) website. Applications may be submitted 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, but for companies. An EIN also helps secure credit accounts for business expenses.
Incorporating in West Virginia
To formally launch your business in West Virginia, you may have to pay fees and file specific documents with the Secretary of State’s office. Some business structures (like sole proprietorships and general partnerships) don’t need to do this. Here’s how to incorporate in West Virginia:
- LLCs. For a West Virginia LLC, you must file Articles of Organization with the Secretary of State’s office, and pay a $100 filing fee.
- Corporations. For a West Virginia corporation, you must file Articles of Incorporation with the Secretary of State’s office, and pay $100 for a for-profit venture; $25 for a non-profit. Fees are waived for corporations owned by US military veterans or qualifying entrepreneurs under the age of 30.
Basic information included in any Articles of Incorporation include:
- Business name and address
- Name and address of someone authorized to receive official correspondence on the business’s behalf (or registered agent)
- Whether the business is for-profit or non-profit
- Whether one or more of the business owners are veterans
5. Obtain business licenses and permits
Any entity engaging in business activity in West Virginia must obtain a business registration certificate from the West Virginia Tax Division. You can apply online or in-person, and pay a $30 registration tax upon submission.
6. Examine business insurance options in West Virginia
Unforeseen losses can be catastrophic for new businesses—in West Virginia and anywhere else. While some business structures like corporations and LLCs offer a degree of personal asset protection, you may still want to purchase business insurance to account for uncovered products, vehicles, and other assets. Common insurance plans and other coverage for West Virginia businesses include:
- Workers’ compensation insurance. West Virginia law requires all in-state businesses with employees to maintain workers’ compensation insurance coverage, or workers’ comp. Workers’ comp covers employees from injuries or illnesses they may sustain on the job.
- General liability insurance. General liability insurance covers some financial losses (like no-fault property damage) and injuries like a customer slip-and-fall. While West Virginia law does not require you to hold this policy, you may need it in order to rent an office, storefront, or warehouse space.
- Professional liability insurance. Professional liability insurance—otherwise known as errors and omissions insurance—covers financial losses from malpractice suits concerning advice or high-competency services like law, accounting, or even real estate. For example, a real estate agent who fails to note mold in a basement may be liable for malpractice damages, and potentially covered by professional liability insurance.
- Commercial business with employees wage bond. Every employer in West Virginia engaged in the commercial construction industry or mining must furnish a wage bond to the West Virginia Division of Labor to secure the wages and benefits of employees.
The federal Small Business Administration (SBA) maintains a list of more insurance policies your new West Virginia business may need.
7. Understand financial considerations
In addition to purchasing insurance, you’ll likely have to make other investments at the early stages of your West Virginia business. These might include renting brick-and-mortar retail space, setting up a professionally designed business website, and purchasing ads, equipment, and software. You may also want to hire lawyers, accountants, and other professionals to support business operations on a contract basis.
These business costs can add up quickly. Luckily, there are accessible resources—like Shopify Capital—to help you obtain the necessary startup funds. West Virginia also offers a variety of assistance and grant programs.
8. Market your business
- Market research. Thorough market research is critical to understanding your target market and can give you a better sense of how to stand out in the West Virginia business ecosystem.
- Advertising. Design and purchase print or digital ads—or hire an agency to do it on your behalf.
- Social media. Every successful business must maintain a solid social media presence on platforms like Facebook, Instagram, YouTube, and TikTok—especially if you want to appeal to younger audiences. Consistently publish content that aligns with your brand to up customer engagement.
- Public relations. Identify and cultivate relationships with media outlets—both locally in West Virginia and nationally—to increase your visibility organically.
Starting a business in West Virginia FAQ
How much does it cost to start a business in West Virginia?
It costs at least $100 to set up your LLC or corporation in West Virginia, unless you qualify for certain exemptions for veterans or young entrepreneurs, or discounts for nonprofits.
Does West Virginia require a business license?
West Virginia requires that any business operating in the state must obtain a business registration certificate from the state tax department.
Is West Virginia a good place to start a business?
West Virginia is a great place to do business, offering the lowest cost of doing business in the nation. That reputation is a result of a variety of favorable climatic factors including low overall taxes, low cost of living, and ideal geographic placement for short-term shipping and transit to major metropolitan parts of the country.