Build a Strong Foundation–Make a Plan
Every successful business starts with a solid plan. Before filing paperwork or choosing a business structure, spend some time developing your idea and checking whether it meets a real need in your community.

Engaging in market research is important at this stage. For example, talking to potential customers, learning about competitors, or examining local trends can help you determine whether there is enough demand for your product or service.

For instance, if you are thinking about opening a café in Middlebury, you might chat with residents about their beverage preferences. You could also visit other coffee shops to see what is popular and check local data to decide if there is room for another café.

Creating a business plan is one of the best ways to set yourself up for success. Your business plan is your roadmap—it describes your goals, target market, finances, marketing, and daily operations. It will help guide your decisions as you grow, and it’s often required when you apply for loans, grants, or other funding.

Business plans generally fall into two categories:
Traditional Business Plan
A traditional business plan delivers a detailed summary of your business. It typically includes an executive summary, company description, market analysis, organizational structure, products or services, marketing strategy, funding request, financial projections, and supporting documents. This format is ideal for businesses looking for outside investment or financing.

Lean Startup Business Plan
A lean startup plan is a shorter, more flexible alternative that focuses on the key elements of your business model. Rather than extensive explanations, it summarizes your value proposition, customer segments, revenue streams, partnerships, and cost structure. This format is often a good choice for entrepreneurs trying to launch quickly or test a new business idea.

 

Before moving forward, consider the following questions:

• Is there a demand for my product or service?
• Who is my target customer?
• What makes my business unique?
• How much funding will I need?
• What are my long-term goals?

Select the Right Legal Structure
One of the first decisions you'll make is choosing your business's legal structure. Your choice affects your personal liability, taxes, management structure, and upcoming growth opportunities. While every business is different, the following are the most common structures used by small businesses.

Sole Proprietorship
A sole proprietorship is the simplest and most common business structure. It is automatically created when one person begins conducting business without registering another type of entity. While this structure gives the owner complete control over the business, there is no legal separation between personal and business assets, meaning the owner is personally responsible for the business's debts and liabilities.
Best for: Individuals testing a business idea or operating a low-risk business.

Partnership
A partnership is owned by two or more people who share responsibilities, profits, and liabilities. Vermont recognizes several partnership structures, including Limited Partnerships (LPs) and Limited Liability Partnerships (LLPs), each granting different levels of liability protection and management responsibilities.
Best for: Businesses with multiple owners or professional groups.

Limited Liability Company (LLC)
An LLC combines many of the benefits of corporations and partnerships. It provides personal liability protection while allowing profits and losses to pass through to the owners' personal tax returns. Because of its flexibility and legal protections, the LLC is one of the most popular business structures for small businesses.
Best for: Entrepreneurs looking for liability protection with relatively simple management and flexible taxation.

Corporation
Corporations are separate legal entities from their owners and generally provide the strongest level of personal liability protection. They require more record-keeping and continuous compliance than other business structures yet may be favorable for businesses planning to seek investors or eventually sell shares.
Corporations may operate as C Corporations or elect S Corporation tax status if they meet IRS requirements.
Best for: Businesses planning significant growth, outside investment, or issuing stock.

Tip: If you are unsure which business structure best suits your needs, consider contacting the Vermont Small Business Development Center (VtSBDC) or the Addison County Economic Development Corporation (ACEDC) for guidance. These organizations provide free or low-cost advising to help you evaluate your options and determine the most appropriate legal structure for your business. You can contact them by visiting their websites to request an appointment, calling their offices, or emailing them directly for more information and to schedule a consultation.

Your business name is often the first impression customers will have of your company. Choose a name that reflects your brand, communicates the products or services you offer, and is easy for customers to remember.

Before settling on a name, search the Vermont Secretary of State's Business Name Database to ensure it is available. You may also want to check whether a matching domain name and social media handles are available.

If your business will operate under a name different from its legal name, you'll likely need to register an Assumed Business Name (DBA).

What is a DBA?
A "Doing Business As" (DBA), also known as an Assumed Business Name, allows a business to operate under a name other than its legal name.

For example:

• Legal Name: Sylvia Green
• Business Name: Green Mountain Artistry

Because the business name differs from the owner's legal name, the DBA must be registered with the Vermont Secretary of State.

Registering a DBA lets businesses advertise, open bank accounts, create websites, and accept payments using their business name. However, it does not create a separate legal entity or replace your legal business name for tax or legal purposes.

Once you've selected a business structure and business name, you'll need to register your business with the Vermont Secretary of State before conducting business in Vermont.

Registration officially establishes your business and allows it to operate legally within the state. During registration, you'll provide information such as your business name, principal office, registered agent, and ownership information.

After your business is registered, it is important to maintain good standing by consistently completing the required compliance steps according to their respective deadlines:

• Filing required annual or biennial reports—Most Vermont registered businesses must file an Annual Report each year by March 15, though some may have different deadlines depending on their entity type. Check with the Vermont Secretary of State to confirm your reporting schedule.
• Keep your registered agent information current—update your agent details quickly if your agent changes so that the state can reach you with official notices.
• Update business and mailing addresses when they change—Report any changes to your business or mailing address right away to keep your registration records up to date.
• Keep precise ownership or personnel information—Notify the Secretary of State of any changes to business ownership, management, or responsible parties as soon as possible to remain compliant.
• Depending on your business type, you may also need to register with federal agencies, establish tax accounts, or meet additional licensing requirements.

An Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN) or Federal Tax ID Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS). Think of it as a Social Security Number for your business.

An EIN is legally required for corporations, partnerships, and any business that hires employees. However, sole proprietors without employees are generally not required to obtain an EIN, though they may choose to do so. 

Obtaining an EIN is still recommended even when not mandatory, as it can facilitate opening a business bank account, help establish business credit, and support the separation of personal and business financial activities.
Before applying, make sure you've already formed your business entity, as the IRS requires your legal business name and formation information during the application process.

The IRS online application is free and typically provides your EIN immediately after submission.

You'll need:

• A Legal business name
• Responsible party's name and SSN or ITIN
• Business mailing address
• Entity type
• State and date of formation
• Reason for applying

After receiving your EIN, store your confirmation letter in a safe place, open a business bank account, register for state taxes, and update your business records appropriately.

Once your business is registered, the next step is making sure you're properly registered for any state taxes that apply to your business. Many businesses in Vermont are required to register with the Vermont Department of Taxes before they begin operating.
Registration is completed through the myVTax online portal. During the registration process, you'll answer questions about your business and the types of taxes you'll be responsible for collecting or paying.

Businesses may need to register for:

• Sales and Use Tax – Required if you sell taxable goods or certain services.
• Meals and Rooms Tax – Required for businesses that provide meals, lodging, or short-term rentals.
• Employer Withholding Tax – Required if you hire employees.
• Corporate or Business Income Tax – Applies to businesses earning income in Vermont.
• Other specialty taxes – Depending on your industry, additional taxes such as fuel, tobacco, cannabis excise, or alcohol taxes may apply.

If your business was already registered with the Vermont Secretary of State, you'll only need to register for your tax accounts. Unlike your business registration, business tax accounts do not require annual renewal, although you'll need to keep your information up to date if your business changes.

Tip: Registering online through myVTax is generally faster than submitting paper forms

Depending on the type of business you operate, you may need additional licenses or permits before opening your doors. Requirements vary by industry, location, and the products or services your business provides. Some businesses only require a general business registration, while others may need permits from state agencies or local municipalities.

The following types of businesses commonly require additional licensing:

• Restaurants, cafés, and food vendors
• Childcare providers
• Contractors and construction businesses
• Agricultural businesses
• Healthcare providers
• Real estate professionals
• Cosmetologists and barbers
• Financial and legal professionals

You may also need to obtain local zoning approvals, building permits, or signage permits depending on your business location. 

Tip: To quickly identify the permits you might need, start by contacting your town or city clerk and reviewing your municipality’s website for local requirements, guidelines, and applications.

If your business is responsible for collecting Vermont taxes, you will receive a business tax license permitting you to conduct these collection activities on behalf of the state. This license must be displayed in a visible location accessible to customers. Because licensing requirements can differ significantly by industry and location, it is important to research and identify the specific regulations and permits that apply to your business and its locality before you begin operations.

For more detailed information regarding business licensing in Vermont, consult the following resources:

• Vermont Department of Taxes: Business tax registration and licensing requirements
• Vermont Secretary of State: Business registration and related permits
• Local municipal offices: Zoning approvals and local permits (contact the town or city clerk’s office where your business will operate) 

Keeping your business finances separate from your personal finances is one of the simplest ways to be organized and protect your business.

Opening a dedicated business bank account allows you to:

• Separate personal and business expenses
• Simplify bookkeeping and tax preparation
• Build business credit
• Accept payments under your business name.
• Present a more professional image to customers and vendors.

 

For LLCs and corporations, keeping separate financial accounts also helps preserve the liability protections offered by those business structures.
Most banks will ask for:

• Your Employer Identification Number (EIN)
• Business registration documents
• Articles of Organization or Incorporation (if applicable)
• Personal identification

No matter the size of your business, insurance plays an important role in protecting your investment from unexpected events. While some policies are legally required, others grant valuable financial protection against lawsuits, property damage, cyberattacks, and other risks.

Required Coverage in Vermont
Depending on your business, certain types of insurance may be required by law.
Workers' Compensation Insurance – Most Vermont employers with one or more employees are required to carry workers' compensation insurance. This coverage helps pay medical expenses and lost wages if an employee is injured on the job.

Commercial Auto Insurance – If your business owns vehicles, Vermont law requires commercial auto insurance that meets the state's minimum liability requirements.

Unemployment Insurance – Businesses with employees may also be required to register for unemployment insurance through the Vermont Department of Labor.

Common Types of Business Insurance
Even if they aren't legally required, these policies are commonly recommended for small businesses:
General Liability Insurance – Protects your business against claims involving bodily injury, property damage, or legal expenses resulting from accidents involving customers or third parties.

Business Owner's Policy (BOP) – Combines general liability and commercial property insurance into a single policy, making it a well-liked option for many small businesses.

Commercial Property Insurance – Helps cover buildings, equipment, inventory, furniture, and other physical assets damaged by events such as fire, storms, theft, or vandalism.

Professional Liability Insurance – Also known as Errors and Omissions (E&O) Insurance, this policy protects businesses that provide professional advice or services against claims of carelessness or mistakes.

Cyber Liability Insurance – Protects against cyberattacks, ransomware, and data breaches—an ever more important consideration for businesses that store customer information electronically.

Insurance costs vary depending on your industry, location, number of employees, and the level of coverage you choose. Be sure to speak with an experienced insurance professional to help you determine which policies best fit your business.

Before seeking funding, it's important to have a well-developed business plan outlining your goals, financial projections, and funding needs.

 

Common Funding Options
Self-Funding (Bootstrapping) – Many entrepreneurs use personal savings to launch their business. While this provides complete control, it also places the financial risk on the owner.

Small Business Loans – Banks, credit unions, and the U.S. Small Business Administration (SBA) offer loans to finance equipment, inventory, property, or working capital. Lenders typically require a strong business plan and monetary forecasts.

Crowdfunding – Online crowdfunding platforms allow people to contribute money toward your business in exchange for rewards, early access to products, or other incentives.

Venture Capital & Investors – Businesses with high-growth potential may seek outside investors willing to provide funding in exchange for equity.

 

Vermont Financing Resources
The Vermont Economic Development Authority (VEDA) offers several financing programs for businesses at different stages of growth.

Such programs include:
Direct Loan Program – Provides financing for businesses undertaking major expansion or development projects, including the construction or renovation of facilities, real estate purchases, and equipment investments. This program is best suited for larger projects that also include private financing.

Small Business Loan Program – Helps small businesses that are unable to secure adequate conventional financing by providing loans for working capital, equipment, real estate, and other business investments.

Entrepreneurial Loan Program – Supports seed-stage, startup, and early-growth businesses that may have difficulty accessing traditional financing. Loans can be used for working capital or fixed assets to help businesses establish and grow.

SBA 504 Loan Program – Provides long-term, fixed-rate financing to help businesses purchase land, buildings, machinery, equipment, and other major fixed assets through the U.S. Small Business Administration.

Vermont Capital Access Program – Encourages banks and credit unions to lend to businesses that may not qualify for traditional financing by helping reduce lenders’ financial risk.

Brownfields Revitalization Program – Provides financing to support the cleanup and redevelopment of eligible contaminated properties, making them fit for new business or community development projects.

Export Assistance Programs – Support Vermont businesses wanting to expand into international markets by providing export financing and connecting them with Export-Import Bank programs and resources.

 

Each program has different eligibility requirements, funding limits, and intended uses. Entrepreneurs should review available options to determine which programs best fit their business goals.

For more information on loan programs, see Vermont Economic Development Authority.

Starting a business does not require working in isolation. Addison County, as well as Vermont as a whole, offers access to local and state organizations that provide focused support to entrepreneurs, including personalized business advising, funding opportunities, technical training, networking events, and assistance with managing regulatory and permitting processes.

Whether you're just getting started or looking to expand an existing business, these organizations can connect you with experienced advisors and valuable community resources.

 

Local Organizations
Addison County Economic Development Corporation (ACEDC) – Aids economic development throughout Addison County by connecting businesses with financing opportunities, technical assistance, workforce resources, and commercial development programs.

Addison County Chamber of Commerce (that’s us!) – Provides networking opportunities, business promotion, educational events, advocacy, and resources created to help local businesses grow and succeed.

The following organizations provide trusted information, forms, and guidance for starting and operating a business in Vermont.

Vermont Secretary of State – Business registration, annual reports, business name searches, and entity filings.

Vermont Department of Taxes – Business tax registration, tax accounts, tax forms, and filing information.

Internal Revenue Service (IRS) – Employer Identification Numbers (EINs), federal tax information, and employer requirements.

U.S. Small Business Administration (SBA) – Business planning tools, funding opportunities, counseling, and educational resources.

Vermont Small Business Development Center (VtSBDC) – Free business advising, market research, business plan assistance, and educational workshops.

Vermont Economic Development Authority – Loan programs and financing resources for businesses across Vermont

Vermont Department of Labor – Employer resources, unemployment insurance, workforce development, and hiring information.