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How to Run a Business in Florida

Here's everything you need to know about operating a business in the Sunshine State.

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Written by: Adam Uzialko, Senior EditorUpdated Sep 05, 2024
Monica Dyer,Senior Editor
Business News Daily earns compensation from some listed companies. Editorial Guidelines.
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Running a business in Florida involves traversing a unique set of economic and regulatory landscapes. Each Florida business opportunity offers significant advantages and some distinct challenges. Whether you’re relocating your business to Florida or starting a new venture, this guide will equip you with the knowledge to navigate the Sunshine State’s business environment.

Editor’s note: Need a workers’ comp insurance policy for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.

State of business in Florida

By all accounts, Florida’s economy is booming. In its 2024 state rankings, U.S. News & World Report named Florida the No. 1 state in the U.S. for economy, citing factors like its strong business environment and GDP growth. However, the Bureau of Economic Analysis ranks it fourth in terms of total GDP — a still-robust ranking. Additionally, BEA data shows that in the first quarter of 2024, Florida’s economy grew by 3 percent, while the United States as a whole grew by 1.4 percent. 

Small businesses are an essential part of Florida’s economic landscape. According to the U.S. Small Business Administration (SBA), small businesses comprise 99.8 percent of all Florida businesses and employ 3.6 million employees — approximately 40 percent of the state’s workforce. Notably, according to FloridaCommerce, 163,992 new businesses formed in Florida in 2024, the most of any state.

Per the SBA Florida profile data cited above, these are the top six industries for small business employment in Florida:

  • Professional, scientific and technical services
  • Administrative, support and waste management
  • Real estate, rental and leasing
  • Other services (except public administration)
  • Transportation and warehousing
  • Construction

According to the U.S. Bureau of Labor Statistics (BLS), Florida’s unemployment rate was 3.3 percent as of July 2024, slightly lower than the national average of 4.3 percent.

These positive economic indicators are encouraging for the state, but they only tell part of the story. To understand the opportunities and challenges facing entrepreneurs and small business owners in Florida, we’ll need to examine several factors more closely.

Did You Know?Did you know
While U.S. News & World Report ranked Florida as the No. 1 state in the economy category, it ranked Florida as the ninth best state overall when considering other factors such as education, healthcare, crime and fiscal stability.

Low taxes

Florida is generally known as a state with a low overall tax burden. It is one of nine states without a personal income tax, making it a highly attractive location if your business legal structure makes you a pass-through entity, such as a limited liability company (LLC) or S corporation. 

The state sales tax is middle-of-the-road on taxes for rented or purchased goods at 6 percent, but when you include local option taxes, the state’s average sales tax is 7 percent. Necessities such as groceries and medicines — and business expenses like new machinery and equipment — are exempt from sales tax, and Florida has a sales tax holiday from the end of July to mid-August when many families are doing back-to-school shopping. 

Corporations in Florida must file a corporate income tax return but at a low top rate of 5.5 percent. In addition, unemployment insurance taxes are low at 2.7 percent for new employers; property taxes are also relatively low, although rates vary by county.

“Florida doesn’t have a state income tax or some of the other nuisance business taxes found in other states,” noted Robert Livingstone, founder of IdealCost.com.

Some business owners are uprooting their businesses to move to Florida due to the small-business tax advantages. Daniel DiGiaimo, CEO and president of Baker Street Funding, relocated his company from New York City to Florida specifically to reduce its tax burden. (Read our guide on running a business in New York to compare taxes and other considerations.)

“[One reason we moved to Florida] is because of the tax benefit,” DiGiaimo explained. “Moving from a city with one of the highest tax rates in the country to a state with no state tax is a huge savings both personally and professionally.”

Florida can afford to keep tax rates low because it relies on hospitality tax revenue from its tourism businesses, including theme parks, hotels and resorts. Local governments may also levy additional tourism taxes.

TipTip
Along with Florida, some of the best states for small-business taxes are Wyoming, South Dakota, Alaska and Montana.

Access to capital

Entrepreneurs also report sufficient access to capital for starting and growing their businesses in Florida. The state provides access to significant investment capital from venture capitalists and angel investors.

“The idea that you have to be in huge metropolitan areas like New York or Silicon Valley for access to capital is overblown,” explained Andy Latimer, founder and CEO of Bluewater Media. “The stable business environment in Florida makes business here ripe for investment. Also, the walls of access to large markets have been broken down by technology.”

Florida hasn’t always attracted private investment capital. In recent years, however, investors have turned their eyes to the Sunshine State. Today, Florida is home to several economic hubs considered incubators for startups and innovation. For example, the Florida High Tech Corridor Council supports high-tech industries with investments, resources and initiatives across 23 Central Florida counties. 

“Whereas Florida used to be a state largely excluded from the startup and VC scene, things have changed considerably over the last five years,” explained Zohar Pinhasi, CEO of MonsterCloud. “I now see it as a promising and cost-effective location for buzz-worthy startups.”

FYIDid you know
A CNBC analysis ranked Florida second in the country on access to capital, giving it an A+ grade. California ranked first (learn more about running a business in California to see how it compares to Florida).

Cost of living

The cost of living in Florida is slightly higher than the U.S. average across the board, but it remains more affordable than other major economic hubs in the country. This means entrepreneurs can plug into a humming business landscape at a reasonable cost, though housing and transportation costs are somewhat pronounced.

“The cost of living and operating a business is still generally significantly lower than in New York, Chicago, D.C., San Francisco or LA,” Pinhasi said.

Prices fluctuate based on locality, of course. For example, Miami tends to be more expensive than other major metropolitan areas in the state, such as Jacksonville or Tampa Bay. For businesses with physical locations, real estate costs vary widely, so it’s important to research local markets.

Florida’s hourly minimum wage is $12 as of September 2023, but it will increase by $1 each year until it reaches $15 in September 2026. Florida labor laws do not mention overtime payment requirements, but federal overtime laws apply.

No Florida laws require employers to provide employees with severance pay if someone is let go. There are also no state laws requiring employers to provide employees with vacation benefits or sick leave, either paid or unpaid.

Did You Know?Did you know
While Florida doesn't require private-sector companies to provide sick leave, many companies do provide it as part of a robust employee benefits package.

Seasonal economy

Florida — which falls in the subtropical to tropical temperature zone — is widely known as a tourist state. With that reputation comes a significant seasonality that impacts many businesses. 

When the weather is nicer in the northern states in spring and summer, fewer tourists and snowbirds spend their time and money in Florida. That means business slows significantly for companies that operate in Florida year-round. 

Running a business in Florida means preparing for the lean months by keeping operations efficient and wisely allocating revenue from the busy season, typically regarded as the time between Thanksgiving and Easter. However, businesses can take advantage of the more available and less expensive labor that comes in the summer months, as people hired by seasonal businesses during tourist season may find themselves without a job. 

“If you own a corner store or restaurant or daily staples business dependent on foot traffic, your small Florida business from Thanksgiving to Easter will be packed with snowbirds clamoring for everything [they] forgot back in Jersey or ‘the City,'” explained Baron Christopher Hanson, licensed commercial real estate advisor at John Burpee & Associates, Inc. Commercial Real Estate. “If you are looking to open an aging healthcare or routine medical practice, be prepared to be busy from November to May, yet very slow in the summer and hurricane months.”

Beyond the seasonal downturns, hurricane season also poses a threat to businesses. Customers regularly evacuate to avoid hurricanes, and the storms represent a disaster risk that could result in significant damage to brick-and-mortar businesses.

“Hurricane season brings a lot of uncertainty to the market,” Livingstone cautioned. “When we need to reach current and prospective clients during this time, we aren’t always successful on our first and second attempts. South Florida has escaped mostly unscathed during the last few years, but often we see people prepare and evacuate due to past experience.” 

That said, hurricane season can be a boon for certain types of businesses, such as roofing and construction companies, hardware stores, and grocery stores.

TipTip
The best credit card processing companies can help seasonal businesses lower fees with customized pricing models that accommodate fluctuating sales volumes.

Competitive labor market

Florida’s relatively low unemployment rate is an indicator of its strong economic performance, but this statistic comes with a drawback: Hiring new employees can be a competitive and costly process. Moreover, as in many other parts of the country, Florida has an employee-centric labor market, making it difficult to retain existing talent. Other companies are prepared to offer lucrative compensation packages to lure the best candidates. 

Unemployment is projected to rise to 4.3 percent in 2026 and then decline slightly by 2028, and job growth in Florida is expected to outpace the overall U.S. economy. A steady influx of new job seekers is expected to continue moving to Florida. Southeast Florida, in particular, has a large workforce, followed by the Tampa Bay region.

While there are several top universities in Florida from which businesses can easily recruit, high salaries and wages, attractive benefits packages and job perks like remote work and paid time off (PTO) policies are standard tools for attracting workers. Businesses should be prepared to compete to secure the most skilled or experienced employees in their industry.

TipTip
To recruit great employees in a tough labor market, share your company's values with prospective new hires, nurture talent from within and focus on incorporating creative job perks that help improve employees' work-life balance.

Frequently asked questions about running a business in Florida

Business owners frequently ask the following questions when starting a business in Florida. The answers will help you file the necessary documents, pay the appropriate fees and understand the basics of starting a business in Florida.
According to SBA data, about 3.1 million small businesses operate in Florida. They comprise 99.8 percent of all businesses in the state and employ 3.6 million workers, about 40 percent of the state's workforce.
To start a business in Florida, you should first check with the state Department of Business & Professional Regulation and your county's tax collector to determine whether your business requires a license. You must also register your business with the Florida Department of Revenue and the IRS. If you operate a corporate entity or a business with a fictitious name, you must also register your company with the Florida Department of State. For more information on the process of starting a business in Florida, visit the state's Division of Library and Information Services website.
The cost of starting a business depends on the exact nature of your company. However, all businesses are subject to a $100 fee to file articles of organization with the Florida Secretary of State's office and a $25 registered agent fee. In addition to these costs, you might be required to secure a business license and business insurance. The state charges an added fee of $30 to obtain a copy of your articles of organization and a $5 fee for a certificate of status.
Florida has several industries somewhat unique to the state (or relatively rare).
  • Theme parks: There are multiple theme parks, including Disney and Universal parks in the Orlando area and Busch Gardens in the Tampa area.
  • Tourism: Tourism is a significant part of Florida's economy. The tourism industry includes hotels, tours, museums, souvenir shops and more.
  • Watersports: Because of Florida's extensive coastline and warm weather, watersport businesses abound, including jet ski and boat rentals, surfing and paddleboarding lessons, and fishing charters.
  • International business: South Florida's proximity to Central and South America and the Caribbean makes it an international business hub. In South Florida, proficiency in Spanish and (to a lesser extent) Portuguese is a plus.
Florida's licensing and permitting requirements can be checked at the following resources:
Florida does not require businesses to carry commercial liability insurance, although it is wise to carry some insurance to protect your assets. If your business operates cars or trucks, you must purchase a commercial vehicle policy and review the Department of Transportation's hours of service regulations for commercial fleets. Workers' compensation insurance is mandatory for any company with at least four employees in Florida (whether they work full time or part time), as well as construction companies, regardless of size, and agricultural companies with at least five regular employees or 12 seasonal workers. Employers must report claims within seven days after they are notified of an accident or injury. Late claim reporting can lead to penalties.
Most businesses must obtain a business license to operate in Florida legally. A general business license is called a "business tax receipt" and can be obtained when you register your business with the county tax collector. Additional licenses and permits, as well as their costs, will depend on the type of business you operate and its location. Failure to obtain the proper licenses and permits for your business could result in fines and, ultimately, the closure of your business.
The cost of obtaining a business license in Florida is generally less than $100. However, it could be higher if your business requires additional licenses or permits. When launching your business, check with local, county and state officials to understand your specific obligations under Florida law.
In Florida, the standard online processing time to form your LLC is two to five business days, which is relatively fast by national standards. Filing by mail may take three to four weeks. Processing times are never guaranteed and are subject to the speed with which government offices can review and approve all filings.
Under Florida law, businesses are required to register a DBA if they plan to use a different name from their registered name. To file a DBA, first ensure your intended name is available by searching the state's Fictitious Name database. If your desired DBA is available, you can file paperwork claiming the name using the online Florida Fictitious Name Registration service. Once approved, the DBA is registered for five years; after which, it must be renewed.
Florida state law requires all employers to report any newly hired or rehired employees to the state directory within 20 days of their start date. This includes self-employed individuals who must report themselves as new hires to the state. Independent contractors, however, are exempt from the law.

Resources for small businesses in Florida

If you’re a small-business owner in Florida seeking help moving forward, here are a few organizations that can serve as valuable resources.

Florida Department of Economic Opportunity

The Florida Department of Economic Opportunity is a government agency that can help you recruit employees and find tax credits and incentive programs. It will also inform you about labor regulations in the state. 

Select Florida

Select Florida, formerly called Enterprise Florida, is a public-private partnership that provides research on Florida’s business growth opportunities and news focusing on trade, export development and defense.

Florida SCORE

SCORE’s volunteer business professionals and expert mentors counsel and guide entrepreneurs looking to start or expand their businesses. The services and workshops are free and volunteer-driven.

Here are some of the SCORE chapters in Florida: 

SBA district offices

The SBA offers financing and grants, as well as consultations and counseling services. There are also opportunities to apply for federal government contracts through the SBA and avenues for obtaining assistance in the wake of natural disasters.

Florida Small Business Development Centers

Florida hosts multiple development centers for small businesses. Each is dedicated to supporting the development and retention of small businesses, helping entrepreneurs do everything from crafting business plans to navigating the state’s tax code. Contact your region’s Small Business Development Center to learn more.

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Written by: Adam Uzialko, Senior Editor
Adam Uzialko, senior editor of Business News Daily, is not just a professional writer and editor — he’s also an entrepreneur who knows firsthand what it’s like building a business from scratch. His experience as co-founder and managing editor of a digital marketing company imbues his work at Business News Daily with a perspective grounded in the realities of running a small business. At Business News Daily, Adam covers the ins and outs of business technology, such as iPhone credit card processing, POS systems, CRMs and remote-work tools, while also sharing best practices for everyday operations. Since 2015, Adam has also reviewed hundreds of small business products and services, including contact center solutions, email marketing software and text message marketing software. Adam uses the products, interviews users and talks directly to the companies that make the products and services he evaluates. Additionally, he often specializes in digital marketing topics, with a focus on content marketing, editorial strategy and managing a marketing team.
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