How to Start a Business in Virginia in 2022: The Ultimate Guide

Is starting a business in Virginia your American dream? Get ready to jump through some hoops. Virginia businesses must be registered. Let’s find out how to start a business in Virginia.

In this article, we’ll show you how to start a business in Virginia from the point of planning till the point where the business is up and running.

Quick Facts About Virginia

Virginia was named for Elizabeth I, England’s “Virgin Queen.” Its nickname is the Mother of States. It’s also known as The Old Dominion and the Mother of Presidents.

All three nicknames are linked to Virginia’s position as one of the oldest settlements in the US, and one of the first states to join the US.

According to estimates, anywhere from 50 to 70 percent of all Internet traffic flows through data centers situated in Northern Virginia. These facilities occupy millions of square feet in the upper area of the state.

Tobacco is Virginia’s major cash crop and many of the people who live here earn their living from the tobacco industry.

Agriculture, aerospace, mining, technology, and the military are the top five industries in Virginia. Several major military centers call Virginia home, and over 20 different bases are peppered throughout the state.

The economy of the Commonwealth of Virginia is well balanced with diverse sources of income. From the Hampton Roads area to Richmond and down to Lee County in the southwest includes military installations, cattle, tobacco, and peanut farming in Southside Virginia.

Tomatoes recently surpassed soy as the most profitable crop in Virginia. Tobacco, peanuts, and hay are also important agricultural products from the commonwealth.

Virginia has seventeen total Fortune 500 companies, ranking the state tenth nationwide. Additionally, ten Fortune 1000 companies are in Northern Virginia, with a total of twenty-nine in the state.[15] With only 1% of the Hispanic American population, the state claims 3.6% of Hispanic 500 companies.[16]

Virginia’s economy is as diverse as the shipbuilding on the southern shore, the farming and tobacco-growing of rural areas, seafood harvesting along the Atlantic coast and rivers, the apple-growing capital of Winchester in the northwest, wineries spread among the countryside and the technology companies of the suburban Washington corridor.

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Why You Should Start A Business In Virginia

Virginia is one of the oldest states in the United States. It is a major hub for businesses to thrive because of its ideal dedication to innovation and growth.

Let’s go on to list the top 5 reasons why you should start a business in Virginia:

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1. It houses lucrative industries

As one of the most technologically oriented states in the world, Virginia is a major hub for aerospace, agriculture, mining, technology, and the military.

This heavy presence of businesses puts them in a pole position to promote innovation and growth.

2. Virginia appreciates entrepreneurs

Virginia’s said to be on the verge of a ‘golden age of entrepreneurialism. Business incubators have never had more traction there, and both state and local universities have seen enrollment in entrepreneurship classes explode.

Taken together, this means two things – increased competition for startups, but also a better, more entrepreneur-oriented community.

3. It has maximum internet access

Now you might be wondering if there’s any state in America that doesn’t have internet access, obviously, there’s no.

Nonetheless, it is estimated that around seventy percent of the world’s internet traffic flows through the data centers situated in Northern Virginia. These facilities which occupy millions of square feet are vital to the existence of worldwide web and internet businesses.

This implies that, if you want to start an internet business idea, Virginia is a perfect place to do so owing to the internet facilities situated in Virginia which guarantees internet speed.

4. Growing economy

As a fertile ground to industries, companies do their best to add up to the economic state of the commonwealth state. This situation genuinely makes the state a perfect destination for startups and big businesses.

5. Ease of access

Virginia is served by 14 commercial Airports, including two of the busiest in the nation – Washington Dulles International and Ronald Reagan Washington International.

The Port of Virginia offers world-class shipping facilities with sailings to 250 ports in 100 foreign countries, and its railway system covers over 3400 miles of track. In other words, if you want to travel frequently or ship products around the world, Virginia’s a great place to call home.

Business Ideas You Can Start In Virginia

Here’s a list of possible business ideas you can start in Virginia:

1. Home Security Systems & Private Security Services

Nowadays, more than ever, the demand for security services has increased in Virginia as well as in the whole USA. The most valuable business ideas in this field are: bodyguard security services, home alarms sale and installation, special event security services, firearms training, and disaster planning and consulting.

2. Unique Services to Homeowners

Virginia is one of the 10 richest states in the USA in terms of household income. Starting a business system that helps homeowners in Virginia will be a great idea.

Examples of such businesses can be professional handyman services, smart home devices, and systems installation, wall painting, and interior remodeling, gutter and roof cleaning, and construction of bunkers, insertion of bulletproof windows, or construction of swimming pools and ponds.

Taking up any of these business ideas will always yield big profits, and their big advantage is that you don’t need a lot of initial capital to start them.

Virginia’s northeastern region is one of the richest (average salary and GDP per capita) areas in the USA. For this reason, businesses in this area can be particularly profitable if aimed at the right audience.

Examples of such services are ushers, valet parking, chauffeurs and car hire, event planning, and professional emcees. Another good idea for this type of business can also be antique sales, interior decorating services, or luxury stores with niche products.

4. Meal Subscription Service & Catering

This business can either be home-based or public. Here, you’ll offer different types of food round the clock to clients.

To make the best out of the business, ensure you are the best at what you do.

It is a good business idea in large cities, but also has a good chance of success in the suburbs, where there are many detached houses.

5. Event planning

Virginia is never void of events. Many people are preparing for a wedding or an important event that demands a wedding venue as elegant as it can be. So, if you’re able to create beauty out of nothingness in a unique style, this opportunity is yours to grab.

6. Food Truck

A food truck business can generate up to thousands of dollars a day, especially during concerts and festivals. The key to success in this business is that your food truck must be at the right place and at the right time.

In order to increase your profits, you should promote your brand and your food using social media. To start such a business you need a truck (or a small car with a trailer). You can also use a toaster maker, mobile pizza oven, or mobile fridge, which you can buy on Amazon by clicking on the links above.

How Much Does It Cost To Start A Business in Virginia?

If you are registering an LLC in Virginia, you’re required to file an annual report on or the last day of their anniversary month. The filing fee is $52.

Virginia corporations are required to file an annual report on or before the last day of the anniversary month of incorporation. The filing fee is $100.

Best Places To Start A Business In Virginia

Starting a business is exciting and, often, challenging. The information below affords an outline of the 5 best places to start a business in Virginia.

1. Tysons Corner

The unincorporated Tysons Corner area serves as Fairfax County’s central business district; it’s home to 26.4 million square feet of office space.

Tysons Corner’s businesses have an average annual revenue of $11.4 million, which is tops on our list and three times higher than any other place in our survey. Nearly 45% of Tysons Corner businesses have paid employees, and its 23.9 businesses per 100 people rank second-highest among all Virginia communities.

Top employers include Boeing Co., Booz Allen Hamilton, and Hilton Worldwide. The area is also home to Tysons Corner Center, the largest shopping mall in Virginia.

2. Fairfax

The city of Fairfax has 25.3 businesses per 100 people, the highest number in the state and its 4% unemployment rate is lower than both the state and national average.

Among the top employers are the city itself and Fairfax Nursing Center. Local businesses are served by the Central Fairfax Chamber of Commerce, which offers monthly networking events, educational workshops, marketing opportunities, and leadership training.

3. Warrenton

The town of Warrenton, about an hour west of D.C. near Shenandoah National Park, has 21.2 businesses per 100 people, fourth-highest among Virginia communities, and 40.1% of its businesses have paid employees.

The Greater Warrenton Chamber of Commerce offers a business assistance team whose mission is to “support and educate local businesses towards sustained profitability and success.” The chamber provides free professional guidance, expertise, and resources to its members.

4. Abingdon

The town of Abingdon has one of the lowest median monthly housing costs on our list, at $663, and has 19 businesses per 100 people. Nestled in the Blue Ridge Highlands region of southwestern Virginia, Abingdon is an outdoor lover’s dream.

The town is home to or near several historic and recreational trails, including the 34-mile Virginia Creeper Trail and the Appalachian Trail. Local businesses are served by the Washington County Virginia Chamber of Commerce.

5. Falls Church

Falls Church, a 20-minute drive from downtown D.C., cracks our top 10 because of its high percentage of businesses with paid employees (44%), its 13.2 businesses per 100 people, and its $91,932 median annual income.

Although median monthly annual housing costs are high at $2,149, the city’s unemployment rate is a low 3.8%. Local businesses can turn to the Falls Church Chamber of Commerce for networking and promotional opportunities.

How To Start A Business In Virginia

Starting a business in Virginia is a process that demands you carry out the appropriate registration and documentation.

Let’s take a look at the prerequisite steps you need to take in order to register a business in Virginia.

#1 Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation, or an LLC.

A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

#2 Pick a Business Name

Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the fewer times you have to do that, the better).

Before you go on to choose a business name, ensure that the name aligns with your idea and structure. In addition, make sure the name is easy to pronounce and retain.

Before you arrive at a name, search to know if the name is available and fit for usage. Additionally, do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if you’re name will have any conflicts.

#3 Register the Business

After chosing a business structure and picked your business name, here are the requirements to register your business in Virginia.

LLC in Virginia

Hire a professional Registered Agent.
File the “Articles of Organization” with the Virginia State Corporation Commission. These may be filed online at the Virginia New Entity Formation website, or by mail. In both cases, the filing fee is $100.
Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Yes, even an LLC can choose to be taxed as an S-Corporation (or even a C-Corporation).

TIP: Speak to your tax advisor about this important issue because it adds complexity to your LLC most people would rather avoid.
Hold an Organizational Meeting to take contributions from the members, issue Member Certificates adopts the company Operating Agreement, and more. (yes, even for 1 person LLCs).

How to Incorporate in Virginia

File the “Articles of Incorporation” with the Virginia State Corporation Commission. These may be filed online at the Virginia New Entity Formation website, or by mail. In both cases, the filing fee is $100.
Hire a professional Registered Agent.
Optional: Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553.
Hold an Organizational Meeting to properly organize the corporation, take contributions from the shareholders, elect directors and officers, issue stock, adopts the Corporate Bylaws, and more.

File a DBA in Virginia

In Virginia, it is wrong to operate with a fictitious business name without filing for a DBA. This could result in a penalty of up to $2,500, up to one year in prison, or both.

Check your business name through the Commonwealth of Virginia State Corporation Commission Entity Search.
If you are a corporation, LLC, or LLP, you must get an Assumed/Fictitious Name Filing in a Virginia Circuit Court, and then file a certificate with the Clerk’s Office of the Commission.
Obtain the forms from the county to register your DBA. More information can be found here.
File the forms with the County. You will need to submit a completed form and the required filing fee to the local circuit court clerk’s office. Some counties may require the form to be notarized and published.

#4 Obtain Your Federal Employer Identification Number

The Federal Employees Identification Number is required for corporations and LLCs and optional for DBAs.

However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

#5 Open Company Bank and Credit Accounts

To keep business and personal expenses separate, ensure you open a separate account for your business.

Additionally, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire about the steps to open a business bank account.

Typically, you’ll need to file your paperwork, tender your EIN, and submit a company resolution authorizing your company to open the account (signed by the owners, members, officers, or directors, etc.).

#6 Set-up An Accounting System

Setting up an accounting system will help you keep records of all financial activities going on in your business. This will help you allocate taxes efficiently.

Company documents generally are required to be kept for 3 years, including a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments, or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years.

#7 Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company. The license authorizes your company to do business in your city or county.

Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

#8 Obtain Business Insurance

When starting a business in Virginia, obtaining business insurance is critical to protecting your business.

Most types of business insurance are optional, except for workers’ compensation insurance in most states. Some states will also require professional liability insurance for businesses offering certain services and commercial auto insurance.

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A fair policy can run as little as $300/year and offers a great extra level of protection.

Even if insurance isn’t required, and there is a fire, theft, or personal injury lawsuit, the business owner may have to pay out-of-pocket for damages and legal fees. Home-based businesses and side-businesses may want to consider business insurance, too, as personal home and vehicle policies may not cover in the event of a business loss.

Top Businesses Operating In Virginia

Our list of top businesses in Virginia will be arranged based on the total number of employees each company operating therein has. Here’s a rundown of some of the top businesses in Virginia.

COMPANY	CITY	EMPLOYEES
1	US Army	Alexandria	500,000
2	Dollar Tree	Chesapeake	176,100
3	Hilton Worldwide Holdings	McLean	169,000
4	DXC Technology	McLean	130,000
5	General Dynamics	Falls Church	98,800
6	Northrop Grumman	Falls Church	85,000
7	Brink’s	Richmond	62,150
8	Bechtel	Reston	52,700
9	Smithfield Foods	Smithfield	50,200
10	Capital One	McLean	49,301
11	United Way	Alexandria	44,250
12	Huntington Ingalls Industries	Newport News	40,000
13	FCi Federal	Ashburn	35,000
14	Maximus	Reston	34,000
15	Leidos	Reston	32,000

Conclusion

Before you start a business in Virginia, it’s important you heed to the outlined step-by-step process of registering a business in Virginia.

References

nolo.com – How to Start a Business in Virginia
startingyourbusiness.com – Guide To Starting A Business in Virginia

How to Start a Business in Virginia: The Ultimate Guide, Step-by-Step