Start a Business in North Dakota Today

Our guide will help you learn how to open a business in North Dakota.

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Start a Business in North Dakota

North Dakota’s economy has expanded well beyond agriculture. In fact, the state’s IT industry is growing and diversifying rapidly, while the energy industry has experienced record growth in recent years.

With all this opportunity and room for expansion, you may be thinking of launching your own business in the Peace Garden State. If so, this article offers step-by-step directions on how to start a business in North Dakota. 

Step 1: Create a business plan for your North Dakota company

The first step toward making your idea into reality is to create a detailed business plan. Planning can sometimes seem intimidating for entrepreneurs, but it doesn’t have to be; sometimes following a template can help. 

Writing a business plan can give you an overall sense of:

If you don’t have a solid business plan, many lenders and potential business partners are unlikely to take your idea seriously. More than that, though, having a business plan helps you sit down and really think about what you’ll need to do to launch your company and make it work.

Step 2: Choose a business structure in North Dakota

Deciding how you will structure your business entity is a very important early step in establishing your company. There are several different types of businesses to choose from, and each has its pros and cons. The most common entity types are sole proprietorships, general partnerships (GPs), corporations, and limited liability companies (LLCs). 

Sole Proprietorships

Sole proprietorships and GPs are businesses that don’t have to register with the state. They’re free to form and simple to set up. Taxation is straightforward, but sole proprietors and GPs leave themselves open to personal liability if something goes wrong with the business. For example, someone suing the business can go after the owner’s personal assets.


The corporation structure offers liability protection to the owners (called “shareholders” in a corporation), so if the business ends up in trouble, the shareholders’ home, bank accounts, and other personal assets are usually safe.

The default form of corporation, the C corporation, comes with a less-than-ideal tax setup that taxes income once at the corporate level and again on the personal tax returns of the shareholders. S corporations also provide liability protection, but without double-taxation; however, they’re harder to qualify for.


Forming an LLC in North Dakota can be a best-of-both-worlds option. LLCs require more paperwork and setup costs than a sole proprietorship, but there are significant benefits as well. One of the biggest advantages of an LLC is that it legally separates your personal assets from the company.

By doing so, it provides personal liability protection if the business files for bankruptcy or gets sued. Yet you’ll still only get taxed once for income, on your personal tax return, just like with a sole proprietorship.

LLCs and corporations in North Dakota do require registration with the state. If you want help with this process, we can file the paperwork to form an LLC or corporation for you with our business formation plans.

Step 3: Determine your North Dakota business startup costs

Determining what your startup costs will be is an important step to take prior to spending money on the business. It can be helpful to think of costs in three categories: one-time, fixed, and ongoing. 

If your business grows and requires additional employees, plan to include estimates for payroll, healthcare costs, unemployment insurance, and workers’ compensation.

You’ll also need to consider the costs of marketing. Think about how you’ll market the business, such as your company website, advertising (such as online, print, and broadcast), industry events, and/or hiring a marketing firm. Investigate what the costs of each marketing method will be.

Once you’ve made an estimate of your costs, make sure to include it in your detailed business plan. 

Step 4: Create a name for your North Dakota business

You may already have a name in mind for your business. However, bear in mind that, like most states, North Dakota has rules that every entrepreneur must follow when picking a company name.

Business Name Search 

For starters, no two businesses can have the same name within the state. The state says every company name must be distinguishable from one another and doesn’t allow duplicate titles. To see if a name is available, conduct a business entity search on the North Dakota Secretary of State website.

We walk you through the search process on our North Dakota business entity search page. This will help prevent legal issues, confusion among customers, and ultimately wasted time and money.

Business Name Reservation Service

The state lets you reserve a name for a fee. If you don’t plan to register your LLC or corporation for a few months, this is an excellent way to hold the title so it won’t be claimed by another business.

If you’d rather not do the paperwork for this process yourself, we have a business name reservation service that can handle it for you.

Find Your Domain Name

As you settle on a company name, you may also consider getting the matching domain name. If this feels outside of your wheelhouse, we can help you register a domain name.

Step 5: Register your North Dakota business and open financial accounts

As mentioned above, if you’ve chosen a business structure such as an LLC or corporation, you’ll need to register your small business with the North Dakota Secretary of State. Many businesses are also required to get a federal employer identification number (EIN), which identifies your business to the IRS and is used for filing taxes, hiring employees, etc.

Note: Sole proprietors and some single-member LLCs with no employees may be allowed to use the owner’s Social Security number as their tax ID, though most experts recommend obtaining an EIN to help avoid identity theft.

Business Bank Account

Another benefit of having an EIN is that most banks require one for opening a business bank account. Having a separate bank account for your business is critical for helping you avoid mixing business finances with personal. It creates a mess at tax time and makes it hard for you to see the true income and expenses of the business.

Mixing business and personal funds can also sometimes make your personal assets vulnerable by voiding the liability protections you would otherwise have from an LLC or corporation. 

At this time, you can also consider applying for a business credit card to cover small purchases and start building your company’s credit.

Business License Report

Next, apply for any permits or licenses required for your business to legally operate. Permits and business licenses vary by industry, and they can be needed at the federal, state, and local levels.

There’s no central authority to tell you every license and permit your business requires, so you’ll have to do some research or have someone like us do the research for you with a business license report.

You’ll also need to investigate your business’s insurance needs. Some kinds of insurance may be a legal requirement, such as workers’ compensation if you have employees. Other policies may just be a wise precaution, such as general liability insurance. Talk with a qualified insurance agent in North Dakota to learn what coverage would best suit your company. 

Step 6: Market your business in North Dakota

It’s essential to think about how you’ll attract customers before officially opening your North Dakota business. By marketing your business, you make customers aware of your services and products. It’s also how you make the case for why someone should choose you over your competitors.

Marketing Plan

Writing a marketing plan is an important first step. It establishes a strategic roadmap to coordinate, deliver, measure, and analyze your marketing activities so you know where your marketing budget will best be spent.

Business Website

Nearly all companies need a business website, with pages that showcase your offerings, tell customers your business’s story, and have a way for them to get in touch.

Social Media and Online Directories

Many do-it-yourself marketing tactics exist for getting the word out about your new company. For starters, open social media accounts on the channels where you believe your future customers are. 

You can also add your business to free online directories, including Google My Business and Yelp. Both include options for customer reviews, which can help as digital word-of-mouth marketing for your company.


Another way to draw attention to your new business is by holding a grand opening and other events and inviting local media to attend. If your budget allows, seek out a North Dakota marketing firm to get other ideas for increasing your visibility.

Remember to customize your marketing approach for your business and your intended clients. While it may make sense for a home-based consulting company in Bismarck to market globally, an florist in Wahpeton will likely want to limit marketing efforts to a smaller area.

Examples of Good Businesses to Start in North Dakota

If you know you want to be a business owner but haven’t settled on the kind of business, you need to consider many factors. What skills do you have that you could monetize? What resources do you have access to? Do you want a brick-and-mortar operation or a home-based business? Have you considered buying an existing business or franchise?

Also think about your location. Is there a need for the kind of business you want to open, or is the market already saturated? What kinds of companies around you have been successful, and are they meeting all the demand for that market?

Only you know what kind of enterprise would best fit you, but here are some business ideas to get you thinking:

Bottom Line

With an ever-diversifying and growing list of industries and many pro-business policies, North Dakota could provide the setting for your dream company. To get to the parts of being an entrepreneur you’ll enjoy faster, team up with our business experts. We have a host of services to help you cut through the red tape to establish and grow your company. Contact us today.

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