Starting a Business in Oklahoma – A Comprehensive Guide
How to Start a Business in Oklahoma
Are you setting out on an entrepreneurial journey in Oklahoma? Our detailed guide has you covered with all the vital information and resources needed to take your business idea to an actual business. Whether initiating your very first startup or broadening the horizons of your existing venture, this guide will be your go-to companion in navigating Oklahoma’s vibrant business landscape. Small business owners will find this guide helpful.
Top two advantages of starting a business in Oklahoma:
- A robust economy and innovation center featuring an adept workforce and numerous investment prospects.
- A versatile mix of industries with promising growth potential, such as aerospace, agriculture, and renewable energy.
Top two challenges of starting a business in Oklahoma:
- Balancing affordability and accessibility, as some areas might offer lower costs but less access to resources and talent.
- Navigating a competitive market and staying up-to-date with evolving state regulations requires careful planning and tactical execution.
Keep reading as we explore the ins and outs of conducting business in Oklahoma, offering valuable insights into regulations, taxes, and more.
Regulatory Factors and Taxes in Oklahoma
Oklahoma has a reputation for being business-friendly, striking a balance between maintaining safety, environmental protection, and consumer rights while offering a simplified regulatory environment for entrepreneurs. However, as a business owner in Oklahoma, it is essential to understand the state’s tax structure to plan your financial strategies and budgets effectively.
Oklahoma imposes a corporate income tax rate of 4%, which is lower than most states. This lower tax rate can be advantageous when budgeting and planning your business’s finances.
The state sales tax rate in Oklahoma is 4.85%. However, local sales tax rates may vary by jurisdiction, with combined state and local sales tax rates reaching up to 11% in some areas. The state ranks 26th overall on the 2023 State Business Tax Climate Index.
Furthermore, businesses operating in Oklahoma may need to account for property taxes, sector-specific taxes, and other fees. Thus, a comprehensive understanding of Oklahoma’s tax landscape is crucial for businesses to budget efficiently and ensure compliance with state and local regulations.
What are the Different Types of Business Structures I Can Use?
There are five primary types of businesses. Each business entity is described below.
A business owned and operated by one individual with no legal distinction between the business and the owner. The owner is personally responsible for all debts and liabilities of the business. As you’ll see in the table below, this is by far the most common type of business entity.
Limited Liability Company (LLC)
A flexible business organization that combines the liability protection of a corporation with the tax benefits and simplicity of a partnership. Owners of an LLC are called members, and their assets are typically protected from the debts and liabilities of the business. Your Articles of Organization for an LLC let you formalize how your business will work and the rights of different members.
A type of corporation allows for pass-through taxation, meaning that profits and losses are passed through to the shareholders and reported on their tax returns. S-Corporations are limited to 100 shareholders and must meet certain eligibility requirements.
A separate legal entity from its owners (shareholders) means that the corporation can enter into contracts, own assets, and sue or be sued. C-Corporations are subject to double taxation, meaning that the corporation and the shareholders are taxed on profits.
Limited Liability Partnership (LLP)
A partnership that limits the personal liability of its partners. LLPs are typically used by professional service providers such as lawyers, accountants, and architects. Each partner is protected from the other partners’ wrongful acts, omissions, and negligence, but they may still be personally liable for their own actions.
Distribution of Businesses
|Percent of Businesses in Oklahoma
|Limited Liability Company (LLC)
|Limited Liability Partnership (LLP)
|Less than 1%
These percentages for Oklahoma will fluctuate annually and depend on the industry and the business’s location. The data may also encompass information about registered companies in other states that operate in Oklahoma.
What Is an EIN Number?
Definition of an EIN or Employer Identification Number
Identification Number (EIN) is a distinct nine-digit identification code assigned to businesses in the United States by the Internal Revenue Service (IRS). This number helps monitor companies’ tax accounts and is known as the Federal Tax Identification Number (TIN) or Federal Employer Identification Number (FEIN).
Do I Need One to Start a Business in Oklahoma?
In Oklahoma, an EIN is essential when starting a business, particularly if you’re establishing a corporation, partnership, or hiring employees. Moreover, an EIN is required for specific activities, such as obtaining business licenses, opening a business bank account, or submitting tax returns.
How Do I Get One?
Acquiring an EIN is a straightforward procedure. You can apply online via the IRS website or send Form SS-4 to the IRS by mail or fax. The online application method is the most convenient, as the EIN is usually provided immediately after completing the application.
For further information or support, you can directly contact the IRS at:
Phone: 1-800-829-4933 (businesses)
How to Start a Business in Oklahoma – Important Registrations
Registering My Business Name
To register your business name in Oklahoma, you’ll need to contact the Oklahoma Secretary of State’s office. You can reach them by phone or visit their website.
Website: https://www.sos.ok.gov/ .
Registering a DBA (Doing Business As) If Relevant
Contact your local county clerk’s office if you need to register a DBA in Oklahoma.
Registering for Payroll State Payroll Taxes, Unemployment Insurance
To register for state payroll taxes and unemployment insurance in Oklahoma, create an account with the Oklahoma Employment Security Commission (OESC).
Registering for Worker’s Compensation Insurance
In Oklahoma, you should contact an insurance provider offering workers’ compensation coverage to register for workers’ compensation insurance. If you use a payroll service , they should be able to provide workers comp as well.
Registering for Collecting Sales Tax
To collect sales tax in Oklahoma, create an account with the Oklahoma Tax Commission (OTC).
Registering for Income Tax
There is more than one type of state tax. Businesses operating in Oklahoma should register for income tax through the Oklahoma Tax Commission (OTC).
Registering to Pay Property Tax
To pay property tax in Oklahoma, contact your local county assessor’s office. A list of county assessor offices can be found on the Oklahoma Tax Commission website.
Permits for Starting a Business in Oklahoma
Do I Need a Business Permit to Operate a Business in Oklahoma?
At the State Level: In Oklahoma, certain businesses may necessitate state-level permits or licenses, depending on the nature of the business and the industry it belongs to. You can refer to the Oklahoma Department of Commerce to ascertain if your business demands a state-level permit or license.
Besides state-level permits, your business might also need local permits or licenses depending on its location and industry. The Oklahoma Business Licensing and Operating Permits website is a helpful resource that can assist you in determining the specific permit requirements for your business.
It is essential to thoroughly investigate all the mandatory permits and licenses before commencing your business operations in Oklahoma.
Check With Your City: Contact your city’s business licensing department to understand any permits necessary for your business operations. They will supply you with the required information and support.
Check Federal Requirements. Each region may enforce specific rules and licensing prerequisites for businesses within its jurisdiction. Therefore, acquiring this information from the regional office or website is crucial for compliance.
Check With Your County: Alongside city and regional requirements, your county might also have distinct regulations and permit necessities for businesses within its jurisdiction. Connect with your county’s clerk’s office or visit their website to learn more about your business’s essential permits and licenses.It is important when starting a business to verify all relevant information with the concerned authorities before starting your business. Keep in mind that requirements can greatly vary based on your business type and location. Failure to do so may result in serious consequences.
How do I learn about any special permits I need for my business?
When initiating a new venture in Oklahoma, it is crucial to pinpoint the mandatory special permits or licenses specific to your industry. These requirements may differ according to various aspects, such as the business’s location and size. Conducting comprehensive research on the required permits is essential to prevent legal complications and potential penalties.
Several avenues can help you obtain this information, including the Oklahoma Department of Commerce, which provides resources and support to businesses regarding licensing and permit requirements. You can browse their website to examine specific regulations or schedule a meeting with their knowledgeable staff for further assistance.
Another valuable resource is your local chamber of commerce or small business development center. These organizations often aid entrepreneurs in navigating the complexities of regulatory compliance.
Financing Options for Entrepreneurs in Oklahoma
Securing adequate funding is essential for establishing and nurturing a successful business in Oklahoma. Business owners can explore a variety of financing alternatives encompassing federal, state, and local resources.
Financing a New Business
Choosing the right financing option for your business can be difficult, but it’s crucial for success. There are various options, including loans, grants, and investments from angel investors. Through careful research and planning, you can find the funding sources that best align with your business objectives.
SBA Loans and Microloans
The United States Small Business Administration (SBA) provides an array of loan programs, including microloans, to support budding entrepreneurs in establishing and growing their businesses. Microloans are small-scale loans, typically short-term, and designed to grant swift access to funds for small enterprises.
In Oklahoma, microloan intermediaries like the Rural Enterprises of Oklahoma Inc. and the Tulsa Economic Development Corporation offer microloans to eligible businesses. In addition, these intermediaries also render supplementary support services, such as business coaching and training.
SBA Microlenders in Oklahoma
Below is a list of SBA Microlenders in Oklahoma for those in search of financing opportunities for small enterprises:
Tulsa Economic Development Corporation
Janet Pieren125 W Third St, Tulsa, 74103918-585-8332
Rural Enterprises of Oklahoma, Inc.
Thuman2912 Enterprise Blvd, Durant, 74701
State and Local Grants and Incentives
The Oklahoma Department of Commerce encourages business growth within the state through various grants and incentives. Noteworthy programs include the Oklahoma Small Business Grants, which provide funding opportunities for small enterprises. Furthermore, the Oklahoma Quality Jobs Program incentivizes businesses that create high-quality jobs within the state.
Angel Investor Groups
Angel investors are individuals or groups that contribute capital to startups in exchange for ownership equity or convertible debt. Several angel investor networks in Oklahoma actively support local enterprises, such as the SeedStep Angels, i2E, and Oklahoma Venture Forum. Connecting with these networks can offer valuable networking opportunities and potential funding for your endeavor.
Remember that securing funding is only one aspect of launching a flourishing business. Investigating and assessing all financing options is vital to discovering the ideal match for your venture.
Benefits of a Well-Structured Business Plan
An all-encompassing business plan offers numerous advantages for entrepreneurs. A meticulously prepared plan can help you define your objectives and address your business’s challenges. Furthermore, a strong business plan is a roadmap to communicate your vision to stakeholders and partners and steer your team.
Meeting Lender and Investor Expectations
Lenders and investors generally expect a detailed business plan before extending financial support to your enterprise. A well-formulated plan demonstrates your commitment and expertise, emphasizing your understanding of the market, financial projections, and strategies for attaining success. By meeting lender and investor expectations, a robust business plan can significantly improve your chances of securing the necessary funds to launch and grow your business in Oklahoma.
Quick Links to Business Plan Templates and Examples
Where Can I Find a Mentor to Help Me Succeed?
Initiating a business in Oklahoma can be demanding, but obtaining advice from professionals such as attorneys, SCORE mentors, or local business organizations is vital. Additionally, networking with fellow entrepreneurs and connecting with mentors can offer invaluable insights and backing as you establish your business in the Sooner State. Luckily, numerous organizations and resources in Oklahoma cater to local entrepreneurs, providing mentorship and support. Some of these organizations include:
Oklahoma SCORE: This non-profit organization aids businesses by delivering networking opportunities, resources, and mentorship to commence and expand a business in Oklahoma.
Phone No (405) 609-8004.
Oklahoma Women’s Business Centers (WBCs): For female entrepreneurs, WBCs supply business advice, financial support, and networking resources to women initiating or managing a business in Oklahoma. Locate a local WBC through the SBA.
Oklahoma Minority Supplier Development Council (OMSDC): OMSDC offers a range of support programs to minority entrepreneurs, such as technical assistance, financial resources, and opportunities for training and development.
Phone No (405) 767-9900
Veterans Business Outreach Center (VBOC): Military veterans interested in starting a business can find support from this organization. VBOC offers mentorship, community support, and guidance on local business administration.
Phone No (405) 606-8262
Small Business Development Centers (SBDCs) in Oklahoma: Funded by the U.S. Small Business Administration, SBDCs deliver support services such as consulting, mentorship programs, and access to resources for a nominal fee. These services are available to entrepreneurs throughout Oklahoma.
These resources present new businesses and those seeking further support, an excellent platform to access information, broaden their network, and cultivate their business in Oklahoma.
The Economy of Oklahoma
A thorough understanding of Oklahoma’s economy is essential for entrepreneurs planning a business. This knowledge is crucial for grasping the financial landscape, consumer trends, and growth potential. Moreover, a robust economy creates a conducive environment for new businesses to flourish and expand.
Average Household Income
The median household income in Oklahoma stands at $56,956, which is somewhat lower than the national median. However, this income level still represents a sizable consumer base for businesses to cater to within the local market.
Average Level of Education
Approximately 25.2% of Oklahoma residents aged 25 years and older possess a bachelor’s degree or higher, while over 86% have completed their high school education. This high level of education often results in a skilled and competent workforce, benefiting companies in search of proficient employees.
Consumer Spending per Capita
In Oklahoma, per capita personal consumption expenditures (PCE) amount to $38,246, indicating a healthy consumer market for businesses to target, providing opportunities for revenue and growth.
Top Industries in Oklahoma
Oklahoma boasts a diverse range of industries, with some of the most prominent ones being agriculture, energy, and aviation/aerospace. These industries contribute significantly to the state’s economy and provide numerous employment opportunities for its residents.
Agriculture is a primary industry in Oklahoma, with the state producing significant amounts of American beef (5.5%) and hog products (4.2%). Poultry and swine are the second and third largest agricultural sectors, respectively. Additionally, the forestry industry is noteworthy in Oklahoma, with less than 20% of its total area being forested and commercially exploitable timber (mainly softwoods) being available in the state.
The energy sector is another vital contributor to Oklahoma’s economy, with petroleum being a key resource. Efforts by state and local officials to diversify the economy and attract new forms of industry and tourism have shown some success. Still, there has historically been an overdependence on agriculture and petroleum. Nonetheless, the energy industry remains an important source of revenue and employment opportunities for the state.
Aviation and aerospace comprise the largest sector in Oklahoma City’s economy in terms of employment and economic impact. Other significant industries in the area include bioscience, energy, and logistics. The region is also home to many back-office operations, showcasing the diversity of Oklahoma’s economy.
In recent years, the biotechnology industry has been steadily growing, with a focus on research, development, and innovation. This industry demonstrates Oklahoma’s commitment to diversifying its economy and embracing cutting-edge technologies. With a wide range of dominant industries, Oklahoma offers ample opportunities for entrepreneurs and businesses to succeed and grow within the state.
Network When Starting a New Business in Oklahoma
Networking is a skill that most successful business owners have as one of their top talents. You can do it too! Networking is a great way to improve your success and grow your personal and business reputation. Here are a few ways to get started.
Identify complementary businesses: Complementary businesses do not offer the same services and products as your own but instead provide related offerings that may be useful to your customers. Identifying complementary businesses can lead to mutually beneficial relationships, as you can support each other in various aspects such as marketing, product development, and customer acquisition. Complementary businesses can expand their customer base, enhance their product offerings, and ultimately boost overall business growth by working together.
Leverage workforce talent: To leverage workforce talent, businesses must focus on attracting, retaining, and developing the skills of their employees. This can be done by creating an inclusive work environment, offering competitive compensation packages, and providing professional growth and development opportunities. Furthermore, recognizing and understanding your workforce’s diverse skills and expertise can lead to improved problem-solving, increased innovation, and a more dynamic and adaptable organization. By strategically leveraging the talent within your company, you can better align your workforce with your business goals and drive long-term success.
Collaborate with industry leaders: Collaborating with industry leaders can provide businesses with valuable insights, resources, and networks that can help drive growth and success. Businesses can benefit from their collaborators’ shared knowledge and expertise by forming partnerships or alliances with established organizations. Additionally, these collaborations can lead to new market opportunities, improved products and services, and increased brand recognition. By engaging in strategic collaborations with industry leaders, businesses can better navigate the competitive landscape and capitalize on the strengths and expertise of their partners.
Workforce and Talent
If you want to make smart decisions about who to hire for your business in Oklahoma, it’s important to know what kind of skills and experience are in the job market. That way, you can find the right people for your team and ensure you stay competitive.
Oklahoma boasts a diverse economy with a low unemployment rate of only 3%, a crucial measure of the state’s financial well-being and job prospects.
In Oklahoma, the minimum wage is $7.25 per hour.
Average Age and Demographics
In Oklahoma, the average population is about 36.3 years old. There are slightly more females than males, with females accounting for around 50.5% and males making up 49.5% of the population.
Breakdown of People with Various Levels of Education
The highest level of education among people aged 25 years and older in Oklahoma are as follows:
- 27.9% hold a higher degree.
- The state ranks 49th in high school education
- 10% have no high school diploma.
Use this information to help you recruit employees with the education and skills that fit your business needs.
Top Areas of Skilled Workers for Residents of Oklahoma
Oklahoma is home to a diverse range of skilled workers across various industries, and several industry leaders have emerged in these sectors. Therefore, understanding the top areas of skilled workers and industry leaders in Oklahoma can provide valuable insights for businesses seeking to tap into the local talent pool and collaborate with established players.
- Energy and Petroleum: With a strong heritage in the energy sector, Oklahoma boasts industry leaders such as Chesapeake Energy, Devon Energy, and Continental Resources. These companies have played significant roles in oil and gas exploration, production, and innovation. They have contributed to the state’s economy and nurtured a skilled workforce in drilling, reservoir engineering, and energy technology areas.
- Aerospace and Aviation: Oklahoma is home to industry-leading companies like Boeing, Northrop Grumman, and FlightSafety International. These organizations have established a strong presence in aerospace manufacturing, engineering, and training. They have contributed to Oklahoma’s reputation as a hub for aircraft production, maintenance, and pilot training, attracting skilled workers with aerospace engineering, avionics, and aircraft assembly expertise.
- Agriculture and Agribusiness: Industry leaders such as Tyson Foods, Cargill, and Seaboard Foods support Oklahoma’s agricultural sector. These companies have significantly contributed to the state’s livestock production, processing, and agricultural innovation. They work closely with skilled workers in animal husbandry, agricultural engineering, and food processing, driving sustainable practices and ensuring high-quality agricultural products.
- Manufacturing and Engineering: In the manufacturing sector, industry leaders such as Spirit AeroSystems, Gardner Denver, and Baker Hughes operate in Oklahoma. These companies manufacture aerospace components, industrial machinery, and oilfield equipment. They collaborate with skilled machining, fabrication, and engineering workers, contributing to Oklahoma’s manufacturing prowess and technological advancements.
- Health and Medical Services: Oklahoma’s healthcare industry benefits from industry leaders like OU Medicine, Integris Health, and Mercy Health. These organizations encompass hospitals, medical centers, and research institutions, providing comprehensive medical services and driving advancements in healthcare. Skilled healthcare professionals in Oklahoma, including doctors, nurses, and specialists, collaborate with these industry leaders to deliver quality care and contribute to medical research and innovation.
These industry leaders in Oklahoma’s top areas of skilled workers represent the pinnacle of expertise and success in their respective sectors. Their presence highlights the state’s capabilities and inspires aspiring professionals and entrepreneurs. In addition, collaborating with these industry leaders can provide valuable opportunities for businesses to access knowledge, resources, and networks, fostering growth and contributing to Oklahoma’s economic development.
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