Starting a Business in Oklahoma

A new business in Oklahoma is in your reach. So have you been wondering: how do I start a business in Oklahoma? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Oklahoma during a recession?

New Business in Oklahoma: Pros and Cons

Business Insider puts Oklahoma in its middle ten states for starting a new business, per a 2016 article. Oklahoma also has the third highest rate of new entrepreneurs.

But Oklahoma also has the nation’s fourth worst business survival score. In addition, its potential employee education level is in the bottom 10 among states. But Oklahoma also has the fourth lowest cost of living in the country.

Changes

In 2018, Forbes puts Oklahoma at number 24. Also in 2018, Fit Small Business clocks in Oklahoma at 33. These numbers are fairly consistent, even though the three sites all have differing methodologies.

Forbes praises Oklahoma for its seventh-best business costs ranking. Its regulatory environment is also good. But then the other measurements are all in the thirties. They are: labor supply, economic climate, growth prospects, and quality of life.

Fit Small Business says Oklahoma is second-best in the nation for cost of living, with decent startup activity. But the costs of starting a business and taxes are both worse than the average. Labor market, a measure of desirability of an area and the number of people with bachelor’s degrees, is a poor 43. But quality of life and access to capital are both an abysmal 45.

Business people looking to start up in Oklahoma will need to weigh all of these factors to determine if the Sooner State is a worthwhile place to start a business.

New Business in Oklahoma: Initiatives

The Oklahoma Quality Jobs Program is a significant Oklahoma business resource.  Under its terms, the state makes direct cash payments to businesses in targeted industries. These create and maintain jobs within the state.

Businesses may receive a payment of up to 5% of payroll expenses for up to 10 years if certain growth benchmarks are met. Jobs must meet wage and benefit requirements to be eligible. It is meant to grow Oklahoma’s manufacturing base. This program has helped create up to 400,000 jobs over the past 20 years.

21st Century Oklahoma Quality Jobs Program

The state has a similar program targeting small businesses with payments. These are in support of jobs created for up to 7 years.

Another Oklahoma business resource is the related 21st Century Oklahoma Quality Jobs Program. It targets the creation of jobs in high wage, knowledge-based industries via cash incentives of up to 10% of payroll for jobs that pay above median wage levels.

Start a New Business in Oklahoma – Oklahoma Top Industries

Per the Greater Oklahoma City Chamber of Commerce, top industries in Oklahoma are biotechnology, energy, aviation/aerospace, transportation and logistics, business services, government, and health care and social assistance. More top industries are weather, telecommunications, and hospitality and entertainment. Yes, weather, as the state’s ecosystem produces interesting conditions for study by meteorologists around the globe.

Smart business owners can find new opportunities. Work with bigger industries in the state. Offer goods or services such as data and other computer support such as programming. More ideas are also trucking for any industry, and food service. Other ideas are also the development and distribution of safety and measurement equipment.

Here is exactly how to start business in Oklahoma.

Start a New Business in Oklahoma – Oklahoma New Business Secretary of State Requirements

Register a Business Name

Register a business name on the Oklahoma Commerce website.

Corporations

Corporations must have unique names. To find out if the is available, search online records and other archives and catalogs. There is a database of registered Oklahoma corporations at the Oklahoma Secretary of State website.

Corporate Name Reservations

A business owner does not need to reserve a corporate name before filing Articles of Incorporation in Oklahoma. If they decide to do so anyway, they can submit a name reservation application to the office of the Oklahoma Secretary of State. Find the name reservation application form at Reserve an Oklahoma Corporation Name on the Oklahoma Secretary of State website. The filing fee is $10.00. The submitted name will then be reserved for 60 days.

Business Permits and Licenses

Check out the Oklahoma Business Licensing and Operating Requirements page on the Department of Commerce website.

Local Permits and Licenses

Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.

For example, in Tulsa, go to the Business Licensing page on the city of Tulsa website.

Start a New Business in Oklahoma – Business Registration

Information and forms is on the Oklahoma Secretary of State website.

Tax Registration

Make sure that you register your business with the Oklahoma Tax Commission.

Start a New Business in Oklahoma – Virtual Offices

Alliance offers Oklahoma virtual business office space in Edmond and Oklahoma City. So go to Regus for Tulsa. Also, go to DaVinci for Weatherford.

For other areas of the state, however, ask local business owners. Or try computer user groups for help in this area.

Other options may be virtual business office space in nearby states. These are Arkansas, Colorado, Kansas, Missouri, New Mexico, and also Texas.

Start a New Business in Oklahoma – Establish Business Credit

Business credit is credit in a business’s name. It doesn’t connect to a business owner’s consumer credit, not even when the owner is a sole proprietor and the solitary employee of the business.

Thus, a business owner’s business and consumer credit scores can be very different.

The Benefits

Because company credit is distinct from consumer, it helps to protect a business owner’s personal assets, in the event of court action or business insolvency.

Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same vendor. This effectively doubles buying power.

Another advantage is that even new ventures can do this. Heading to a bank for a business loan can be a formula for frustration. But building business credit, when done right, is a plan for success.

Consumer credit scores are dependent on payments but also additional considerations like credit usage percentages.

But for business credit, the scores really only depend on whether a company pays its invoices timely.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

The Process

Growing company credit is a process, and it does not happen without effort. A business has to proactively work to develop company credit.

Nevertheless, it can be done readily and quickly, and it is much more rapid than establishing individual credit scores.

Merchants are a big aspect of this process.

Performing the steps out of sequence will cause repetitive rejections. No one can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Business Fundability

A business must be fundable to lending institutions and merchants.

Hence, a business will need a professional-looking web site and email address. And it needs to have website hosting from a supplier such as GoDaddy.

Additionally, company telephone and fax numbers must have a listing on ListYourself.net.

In addition, the company telephone number should be toll-free (800 exchange or comparable).

A company will also need a bank account dedicated purely to it, and it has to have every one of the licenses necessary for operation.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Working with the IRS

Visit the IRS web site and acquire an EIN for the small business. They’re totally free. Pick a business entity such as corporation, LLC, etc.

A business can start off as a sole proprietor. But they will most likely want to change to a form of corporation or an LLC.

This is in order to diminish risk. And it will make the most of tax benefits.

A business entity will matter when it concerns taxes and liability in the event of litigation. A sole proprietorship means the business owner is it when it comes to liability and taxes. Nobody else is responsible.

Sole Proprietors Take Note

If you run a company as a sole proprietor, then at least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the company name. Consequently, you can find yourself being personally accountable for all business debts.

Additionally, per the Internal Revenue Service, with this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 possibility for corporations! Avoid confusion and dramatically reduce the chances of an IRS audit as well.

Beginning the Business Credit Reporting Process

Begin at the D&B web site and obtain a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s sites for the company. You can do this at fastcs.wpengine.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

By doing this, Experian and Equifax will have activity to report on.

Vendor Credit Tier

First you should build trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to acquire credit. So this is in the retail and cash credit tiers.

These types of accounts often tend to be for the things bought all the time. They include marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first of all, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are commonly Net 30, versus revolving.

So, if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term. For example, within 30 days on a Net 30 account.

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts have to be paid completely within 60 days. In comparison with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.

To start your business credit profile properly, you need to get approval for vendor accounts that report to the business credit reporting agencies. When that’s done, you can then make use of the credit.

Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Makes Sense

Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with marginal effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than one time to these vendors. So, this is to verify you are reliable and will pay on time.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. These are service providers which include Office Depot and Staples.

Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the company’s EIN on these credit applications.

One such example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or more.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are companies such as BP and Conoco. Use this credit to buy fuel, and to fix, and maintain vehicles. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make certain to apply using the company’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or more and a 411 business telephone listing.

Shell may say they want a certain amount of time in business or profits. But if you already have enough vendor accounts, that won’t be necessary. And you can still get approval.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Cash Credit Tier

Have you been responsibly managing the credit you’ve gotten up to this point? Then move onto the cash credit tier. These are businesses like Visa and MasterCard. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One such example is the Fuelman MasterCard. They report to D&B and Equifax Business. They need to see a PAYDEX Score of 78 or higher. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

In addition, they want you to have an established company.

These are service providers such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are typically MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.

Start a New Business in Oklahoma – Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any mistakes ASAP. Get in the practice of taking a look at credit reports. And dig into the particulars, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: fastcs.wpengine.com/monitoring.

Update Your Record

Update the info if there are errors or the data is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to challenge any errors in your records. Mistakes in your credit report(s) can be corrected. But the CRAs usually want you to dispute in a particular way.

Disputes

Disputing credit report mistakes generally means you mail a paper letter with copies of any proofs of payment with it. These are documents like receipts and cancelled checks. Never send the originals. Always mail copies and keep the original copies.

Fixing credit report mistakes also means you precisely spell out any charges you dispute. Make your dispute letter as understandable as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.

Start a New Business in Oklahoma – A Word about Business Credit Building

Always use credit smartly! Don’t borrow more than what you can pay back. Monitor balances and deadlines for payments. Paying off promptly and completely will do more to raise business credit scores than just about anything else.

Establishing business credit pays off. Good business credit scores help a company get loans. Your credit issuer knows the small business can pay its debts. They understand the small business is for real.

The business’s EIN attaches to high scores and loan providers won’t feel the need to ask for a personal guarantee.

Business credit is an asset which can help your company for many years to come.

Learn more here and get started toward opening a new business in Oklahoma.

Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.

Oklahoma’s Response to COVID-19 

Here’s what Oklahoma is doing about COVID-19. On March 17, Governor Kevin Stitt urged Oklahomans to avoid eating in restaurants, discretionary travel, shopping trips and gatherings of more than ten people. However, he initially did not declare any closings. 

The Governor received a great deal of backlash for a tweet of him eating in a crowded restaurant with his family. Then the Governor walked that back and declared a state of emergency.

As a result, Oklahoma small businesses are eligible to apply for emergency disaster loans from the SBA. 

See: oklahoman.com/article/5657901/stitt-urges-oklahomans-to-avoid-restaurants-gatherings-of-10-or-more.

See: cnn.com/2020/03/15/politics/oklahoma-governor-deleted-tweet-coronavirus/index.html.

And see: news9.com/story/41897477/gov-stitt-declares-state-of-emergency-for-all-77-oklahoma-counties.

Also see: ok.gov/OEM/Emergencies_&_Disasters/2020/20200306_-_COVID-19/20200314_-_News_Release_SBA_Program_for_Businesses.html.