How to Start a Business in the South: Step-by-Step Guide

Starting a business in the South follows the same core steps nationwide, but every state sets its own filing fees, taxes and licensing rules. Here's the order to do things in, the free government resources to use, and the regional differences worth knowing about.

The 10 steps

1. Test the idea before you spend. Talk to at least 10 people who would actually pay. Price it, and figure out how customers will find you. A one-page plan beats a 40-page one you never open.
2. Pick a business structure. Sole proprietorship, LLC, partnership or corporation. Structure affects personal liability, taxes and paperwork. Many small owners choose an LLC, but ask a CPA or attorney what fits your situation.
3. Choose and check your name. Search your state's business name database and the USPTO trademark database, and check that a matching domain and social handles are free. If you'll operate under a different name, you may need to file a DBA (assumed name).
4. Register with your state. LLCs and corporations file formation documents with the Secretary of State (or equivalent). Sole proprietors often only need local licensing and a DBA. Use the SBA lookup below to find your state's office.
5. Get your EIN. An Employer Identification Number is free from the IRS. You need one to hire, to open most business bank accounts, and for most LLCs and corporations. Never pay a third-party site for it.
6. Register for state taxes. If you sell taxable goods or services or have employees, register with your state's revenue department for sales tax and payroll withholding.
7. Get local licenses, permits and zoning approval. Cities and counties often require a general business license, and many trades and industries need extra permits (food, alcohol, health, contractors, child care, cosmetology and more). Home-based businesses should check zoning first.
8. Open a business bank account. Keep business and personal money separate from day one. It protects your liability shield and makes taxes far easier.
9. Get insured. General liability is the baseline. Add professional liability, commercial auto, property or workers' compensation depending on what you do and whether you have employees.
10. Build your brand and get found. You need a logo, a simple website, a Google Business Profile and a directory listing so people can find and trust you.

States in the South

Regional things to know

• Florida, Tennessee and Texas have no personal income tax on wages, but Texas imposes a franchise tax on most LLCs and corporations, and Tennessee imposes franchise and excise taxes on LLCs and corporations.
• Tennessee LLCs pay a Secretary of State filing fee of $50 per member ($300 minimum, $3,000 maximum) plus an annual report with the same fee structure. Most Tennessee businesses also need a county and/or city business license once gross receipts pass $3,000 a year.
• Delaware is popular for incorporating, but if you operate somewhere else you'll generally also have to register in your home state as a foreign entity, which means two sets of fees.
• Delaware has no state sales tax.

Fees and rules above were reviewed October 26, 2026. Always confirm with the state agency before filing.

Free federal resources

• SBA business guide (plan, launch, manage)
• SBA: register your business / find your state's registration office
• SBA local assistance (district offices, SBDCs, SCORE, Women's Business Centers)
• IRS: get a free Employer Identification Number (EIN)
• USPTO: trademark basics and search
• FinCEN beneficial ownership (BOI) status
• FTC business guidance (advertising, privacy, consumer law)
• OSHA small business resources
• SAM.gov (register to sell to the federal government)
• SCORE free mentoring
• America's SBDC network (free advising)

Tools to launch your brand

Selling food or cosmetics? Labeling rules (ingredients, net weight, allergen and cottage-food statements) vary by product and state. The label maker gives suggestions only; confirm requirements with your state agriculture or health department.

Get listed

Once you're open, add your business to Bizfari or claim your existing listing so local customers can find you.

Other regions: Northeast Midwest West

Common questions

Do I need an LLC to start a business in the South?

No. You can operate as a sole proprietor in every state, usually with local licenses and a DBA if you use a business name. An LLC adds liability protection but also adds state fees and filings. Ask a CPA or attorney which fits you.

Is an EIN free?

Yes. The IRS issues EINs free online. Avoid websites that charge for one.

Do I need a business license?

Often, yes. Most licensing happens at the city or county level, and many industries need extra state permits. Check with your city hall and county clerk.

What does it cost to start?

State filing fees for an LLC range from under $100 to several hundred dollars, plus any annual report fees, local licenses and insurance. Check your state's fee schedule before filing.