Starting a Business

List of subsection to this text

• Introduction
• Check Your Credit
• Identify Your Goals
• Know Your Market
• Develop a Business Plan
• City Incentives
• Contact The City
• Useful Sources
• Select a Location
• Apply For Certificate of Occupancy
• Apply For a Business License
• Vendor Licenses
• Conclusion
• Miscellaneous Taxes
• Most Frequently Asked Questions

Introduction

Welcome to our online guide to starting a business. This site is designed to help potential businesses evaluate their entrepreneurial abilities and learn the basic steps to follow from start to finish in making a dream a reality.

When you hear the phrase "The American Dream," the first things that usually come to mind are owning a home or owning a small business. It is impossible to cover all aspects of launching an entrepreneurial endeavor, so this site is focused mainly on the fundamental steps in starting a business in the City of Richmond. The concepts discussed will also be helpful to existing business owners in planning expansion or looking for financing to solve a business problem.

The best preparation for starting a business is several years of business education, followed by several more years of business experience. However, sometimes this may not be feasible. So, we will try to outline some of the basics steps if you decide to become an entrepreneur.

In order to start a business in the City of Richmond; it is recommended that you follow each of the steps in the menu on the left. Throughout the process, you will find individuals at the city anxious to help you realize your goals.

Check Your Credit

You will need good credit. If there are any problems on the report that can be remedied before meeting with a banker, do so. A lender may be able to make exceptions if you can document that a negative report was due to circumstances beyond your control. Include a detailed written explanation with supporting information in your financing proposal. However, if the report shows that you are irresponsible and you have not demonstrated a willingness to repay obligations, the lender will be unable to make a loan.

You can obtain a credit report from one of the national or local credit bureaus for a small fee.
Equifax 1-800-997-2493
AAA Credit Screening 1-888-282-0447
Experian 1-888-397-3742

Identify Your Goals

Choose a business based on your skills and your interest, and of course, the need for that product or service in your market area. The Small Business Administrationhas information that can help you pick what business is right for you.

Know Your Market

Conduct research to determine whether your business will do well in your prospective general location. You may want to consult a local research firm to help with this process.

• Southeastern Institute or Research Inc
• Matrix Marketing Research Group Inc

Develop a Business Plan

A business plan will help you determine if your idea is feasible, how much the business will cost to start, and how much volume you will need to stay in business.

The Small Business Administration has a site that contains helpful information on how to start a business plan.

The process is not quick. If you must have money to open by a certain date, make your loan application as far in advance as possible.

It is unlikely that you will receive 100 percent financing. You are going to have to put some money into the business and the more the better.

A bank will require you to personally guarantee the loan even if you are incorporated. There is no way to avoid putting personal collateral at risk. If necessary this could include your house.

Some businesses are easier to finance than others are. Since over 60 percent of all small business start-ups fail within five years, lenders know that the odds are against a new business being around long enough to repay a loan. An existing business is easier to finance if profits are sufficient to repay the loan. Also, many sellers are willing to hold some of the financing. Franchises are generally easier to finance than independent start-up businesses.

The Small Business Administration does not lend money. The SBA does have a guaranty program that is designed to provide more security to lenders that they will lend money to small ventures which would be too risky for a regular bank loan. SBA guaranteed loans are made and processed by a bank, with the SBA guaranteeing up to 80 percent of the loan. Interest rates and repayment terms are negotiated between you and the lending institution. SBA does limit the interest rate the lender can charge and there is a small guaranty fee.

City Incentives

The City of Richmond coordinates a wide range of economic programs designed to support new businesses. Check them out at the web page called Business Assistance. Contact the Department of Economic Development at (804) 646-5633 or the Office of Minority Business Development at (804) 646-4336 for details regarding our incentive programs.

Contact The City

Certain businesses may have a unique requirement or call for certain permits. If you have any questions about what you need to do to open a business in the City of Richmond, contact our Small Business Coordinators in the Zoning Administration Division at (804) 646-6923 or (804) 646-6701. They will find answers to your questions and help lead you through the process by:

• Defining the steps that match your specific needs
• Identifying the appropriate sequence of steps (some steps may occur at the same time)
• Advising you of zoning requirements
• Providing you with contacts in other City departments, connecting you with key personnel
• Coordinating the review of any planning or permit applications that are required
• Helping to find solutions to any problems

Useful Sources

There are other sources of information that are available to help guide you in developing your business.

Virginia Department of Business Assistance at (804) 371-8253 has individuals who can guide you to the appropriate resources.

Buzgate - Virginia Business Utility Zone Gateway can help you develop your business.

The Office of Minority Business Development is a department that helps minority businesses with most of the business process. They can be reached at (804) 646-4336.

The Metropolitan Business League also has individuals that can assist businesses, in particular, minority enterprises. They can be reached at (804) 649-7473.

You can also look online at Retail Merchant’s Association and at The Greater Richmond Chamber of Commerce for additional information.

Select a Location

Choose a building or a piece of property where you want your business to be located. A real estate broker may be able to help. Additional help can be found in the Department of Economic Development at (804) 646-5633. City staff are very familiar with available real estate and can often give you advice on the best business location.

For local requirements, a Small Business Coordinator will help verify the zoning of the property. Visit the office of Zoning Administration in Room 110 in City Hall 900 East Broad Street. They can be reached at (804) 646-6340.

The Business Coordinators will help verify the zoning of the property. You can obtain zoning as well as special information on parking, historic designation, signs, etc by requesting a Zoning Confirmation Letter.

If your property is not properly zoned for the business of your choice, a Small Business Coordinator or a zoning officer will advise you what areas of the city may be appropriately zoned or the options that are available to you for bringing the site into compliance with zoning regulations. Click here for more information on zoning codes.

It is very important that you collect the information mentioned above BEFORE signing a lease or purchasing a property, so you can be sure that the location of your choice is suitable for your business and/or you have sufficient funds to bring it into compliance with appropriate regulations.

Apply For Certificate of Occupancy

You must receive your Certificate of Occupancy from the City of Richmond prior to applying for a business license and starting your business. You can apply for your Certificate of Occupancy in Room 110, City Hall 900, East Broad Street, or call (804) 646-6955.

To ensure the safety and health of the building’s occupants you may be required to complete some modifications to the property in accordance with the Virginia Uniform Statewide Building Code, the Zoning Ordinance and other City requirements.

The Permits and Inspections Division issues building, electrical, mechanical, plumbing, and other construction permits. The staff will help you understand the process for obtaining the required permits and inspections for your commercial or residential building project. We suggest a pre-application interview with one of our experts well ahead of time to help the process flow more smoothly.

During the construction phase, inspectors from Permits and Inspections/Zoning Administration will perform periodic inspections to ensure that the work is done in accordance with the certified plans.

Click here for more information regarding building permits/inspections. You may request information and inspections for your Building and Trade Permits, 24 hours a day, by calling (804) 646-0770.

Depending on the nature of your business you might be required to obtain additional operating permits (e.g. Food Operator’s Permit from the Health Department, and Public Safety Permit from the Police Department). You may also need to make service requests for gas, water/storm water and sewage connections from the Department of Public Utilities. The Department of Public Utilities can be reached at (804) 644-3000.

Click here for more information on the Virginia Building Code. They are located at 501 North Second Street and can be reached at (804) 371-7160. At this site you will be able to get access to the Virginia State Building Code and other useful Information.

There are also numerous City of Richmond codes that may be of interest to you. To view the city code online, click here.

When construction is complete, you or your contractors should schedule a final inspection of the work. After the final inspection is approved you will be issued a Certificate of Occupancy that will allow you to occupy the building.

Apply For a Business License

There are several steps in applying for a business license. There are two main categories of businesses: food establishments and non-food establishments.

FOOD ESTABLISHMENTS may include restaurants, grocery stores, nightclubs, and fitness centers. Examples of NON-FOOD ESTABLISHMENTS are retail and professional services

We recommend that businesses follow the steps in sequence to ensure a speedy process. If any one of these steps does not apply, then skip that step and move to the next step.

Businesses with a trade name must register their name in the Record Room of the John Marshall Court Building. They are located at 400 North 9th Street, Room 4 Lower Level. They can be reached at (804) 646-6530.

Establishments that intend to serve food, must obtain a health permit from the Environmental Health Department at 900 East Marshall Street. Contact the Environmental Health Department at (804) 646-3120. Those businesses that plan on serving alcoholic beverages must apply for a Beer, Wine, and Mixed Beverage Permits from the Virginia ABC Board at 2901 Hermitage Road. You must have your business license prior to obtaining your Beer, Wine, and Mixed Beverage Permit. Virginia ABC board can be reached at (804) 213-4620 or (804) 213-4624.

After you receive your business license, you can obtain your ABC permit. There is a fee for ABC permit holders and the fees are listed at this site. Look under the flat rate fees for ABC licenses.

Establishments that must have a safety permit, for example nightclubs, bowling alleys, amusement buildings, escort services, movie theatres, and pawnbrokers must apply at the Richmond Police Department at 501 North 9th Street. Call Detective McClarin at (804) 646-8123 in the Organized Crime Unit for more information regarding safety permits.

**CONTRACTORS ONLY** Contractors are required to obtain a Workers Compensation Certificate from the Virginia State Contractor’s Board at 3600 West Broad Street. Call (804) 367-8511 for more information.

After all applicable permits have been acquired; you can apply for a business license in Room 103, of City Hall, 900 East Broad Street from the City's Finance Department. Call (804) 646-5690 for more information.

There is a processing fee for business license applications. In addition, there are gross receipt taxes due.Click here for the schedule of fees, flat rates, due dates, and tax rates for businesses