Running A Business In California? What You Need To Know

Posted by: KHTS Articles in News Articles October 21, 2021 - 4:13 pm 0 360 Views

California is a beautiful state with a diverse range of climates. It’s also home to some of the most interesting and innovative companies in the world, such as Apple and Google. As an entrepreneur running your own business, you might be considering moving out west to take advantage of California’s booming economy. This post will answer any questions that you may have about what it takes to start or run a business in this great state.

Things To Consider When Running a Business in California

Here are some of the things you’ll need to consider before starting a business in California:

Tax Rates

In order to determine how much of your income will be taxed, you’ll want to know about California’s progressive tax rates. The more money that is made, the higher percentage it will cost. These are separate from federal taxes and can vary depending on where you live within the state.

If employees work under your company name or banner, then they might have access to unemployment benefits if there were ever an incident of job loss. This varies by city but usually runs around 0% for every $1000 earned until a certain limit is met per employee (usually between $1500-5000).

A sales tax is imposed by the state or county (depending on where you live) and there are different rates for general, food, vehicles, etc. This can be paid monthly or annually, depending on your business type.

If you incorporate in California, then it’s important to understand how this may change your income taxes as an entrepreneur. Most entrepreneurs will want to take advantage of pass-through taxation, which means that they pay personal income tax instead of corporate tax like most companies do.

Complex regulations are tough to navigate

You’ll need to follow some regulations when running a business in California, especially if it’s manufacturing or distributing products.

The CA Department of Public Health regulates the sale and distribution of food within the city. They also have numerous laws regarding packaging requirements, which can be found here. The CA Bureau of Cannabis Control is another agency with abundant information for entrepreneurs who want to distribute marijuana-related goods. You can read more about these standards on their website.

For manufacturers, there are certain standards required by OSHA (Occupational Safety & Health Administration) which includes how workers should interact with hazardous materials during production processes. This requires testing equipment such as gloves, goggles, ventilation systems etc., so make sure you are up to code when it comes time for your business inspections.

The Department of Consumer Affairs is the agency responsible for regulating and investigating any complaints about businesses in California, so be sure that they have a good reputation before launching them! It’s also important to note that some industries require special licensing or certifications, such as pest control companies or real estate agents.

Cost of living

California’s cost of living is 41% higher than the average state, so it may be important to consider this when running a business in California. The median home value here is $529,000. Rent for an apartment can range anywhere from $1700-4000 per month, depending on where you live and other factors such as amenities or proximity to public transportation hubs. Food costs are generally more expensive (especially fresh produce), but if you’re willing to eat out at restaurants, your wallet will thank you since Californians tend to dine out frequently! You’ll still want someplace accessible and convenient for your employees though, which makes up part of your expenses as well.

Healthcare also plays a big role in determining how much money goes out of your pocket as an entrepreneur. The cost of living is high, and if you don’t want to pay for health insurance (which can easily be $400-500 per employee), it’s advisable that you take out a private policy.

California also has the highest state income tax rate in the nation, so this might be important information before launching a business here.

What You Can Expect From Running a Business in California

California might just be one of the most interesting states for startups, thanks to its unique economy and state legislators who encourage new businesses by helping with things like tax breaks. This can help reduce expenses, which would allow entrepreneurs more freedom during their initial startup phase while keeping costs low. The opportunities here are endless if someone is willing to put in the work to make their dream a reality.

Conclusion

Are you running a business in California? If you are, then you need to know about the new overtime law that went into effect on January 1, 2016. The state has gone from eight hours of work for non-exempt employees and 12 hours of work for exempt employees per day before they must be paid time and a half wages to ten hours and 14 hours respectively. This is an important change because it impacts many aspects of running your company, including hiring practices, scheduling, payroll requirements and more.