How To Start a Business in New Mexico: 6 Simple Steps
Starting a business in New Mexico is a great idea. With gorgeous weather, stunning views, and unique rock formations and local history, the Land of Enchantment is a great place to start your new business. Affordable real estate, a growing customer base, and favorable tax laws also help make starting a business in New Mexico a great idea. Read on for all the info you need to start a business in New Mexico today!
Start a business in New Mexico
Starting a business in New Mexico isn’t too stressful when you follow these six simple steps:
- Choose a name for your New Mexico business
- Write a business plan
- Choose a business structure
- Obtain all necessary New Mexico business licenses and permits
- Prepare for your business’s financial success
- Market your New Mexico business
1. Choose a name for your New Mexico business
If you’re reading this post about starting a New Mexico business, you probably already have a business idea. Perhaps you’ve even started doing business, and you’re looking to take your side hustle to the next level or make your enterprise a little more official. Wherever you are on the timeline of starting your New Mexico business, the first official step is to choose a name. Pick a name that tells your customers exactly what you’re all about. Keep it simple, as long and complicated business names can be hard for customers and clients to remember. And perhaps most importantly, make sure your business name is available in the state of New Mexico. You can run a business name search with the New Mexico Secretary of State to make sure no other entity has already claimed the name you want to use. Once you’ve confirmed that your name is available, you’ll want to reserve it by filling out a name reservation form with the New Mexico Secretary of State. Note – the business entity structure you choose (see step 3) can affect the official name you use to register your business. New Mexico LLCs must include the phrase “Limited Liability Company” or its abbreviations (“LLC” or “L.L.C.”) in their business names, while New Mexico corporation names must include “Corporation,” “Company,” “Incorporated,” or “Limited” or their abbreviations. If you’re not sure which entity you’ll use, hold off on filing the official name reservation form until you complete step 3.
One last note about choosing your New Mexico business name: although it’s not strictly required, it’s a good idea to check for domain name and social media profile availability as well. You want your customers to be able to find your digital presence quickly and easily.
2. Create a business plan for your New Mexico business
A well-thought out business plan can be immensely helpful when starting a business in New Mexico. Your business plan will serve as a guiding document that helps you structure, operate, and grow your business. It’s especially important to write a solid business plan if you are planning to seek funding from investors, banks, or other financial institutions.
Your business plan should contain the following key elements:
- Executive summary
- Company description
- Market analysis
- Organization and management
- Service or product description
- Marketing and sales plan
- Funding request
- Financial projections
For more detailed information about writing a business plan, check out our handy guide or reach out for a free consultation with a Prime business advisor.
3. Choose a business entity structure for your New Mexico business
When starting a business in New Mexico, you’ll need to choose a business structure. The three main types are: a sole proprietorship, a limited liability company (LLC), and a C corporation. Each entity type offers unique benefits when it comes to personal liability, ownership, taxation, and funding:
- Sole proprietorship. A sole proprietorship is an informal business structure. Legally, they are simply extensions of their owner, so there is no protection or separation for your personal assets. If you operate as a sole proprietorship and your business is sued, you may personally be liable.
- LLC. A limited liability company (LLC) is a more formal business structure in which each owner (individual) is a member. The LLC structure offers personal liability protection, meaning that if someone sues the LLC, the members are not personally liable.
- Corporation. A corporation is a legal business entity owned by a group of shareholders. This is the most formal of the three entities, with more reporting rules and regulations. Because the business is divided into shares that can be bought and sold, it is easy to add owners, sell the business, and raise funds. Corporations also offer personal liability protection for their owners.
Obtaining a federal employer identification number (EIN)
No matter what state you’re in, if you incproprate your business or plan to hire employees, you’ll need a federal employer identification number (EIN) from the IRS. (Sole proprietorships with no employees do not need an EIN.) The EIN will function as your business’s federal tax number, and will be useful for other things such as setting up business bank accounts.
Once you have the EIN, you can register your business with the New Mexico Taxation and Revenue Department and file Form ACD-31015 online through the state’s Taxpayer Access Point (TAP). Once this is done, your business can can conduct financial transactions and pay New Mexico business tax.
If you’re setting up a New Mexico LLC, you can do that online here. The fee to file your LLC paperwork in New Mexico is $50. New Mexico Corporations must fill out the Articles of Incorporation and mail them to the Secretary of State. The fee to incorporate in New Mexico ranges from $100 to $1000, depending on the number of shares your corporation has.
4. Obtain a business license and permits
The state of New Mexico requires special licenses and permits for companies operating in particular industries, including architecture, food service, construction, and alcohol sales. You can find more information about permits and licenses required at the New Mexico Regulation and Licensing Department and the New Mexico Business Portal.
5. Prepare for your New Mexico business’s financial success
One of the most important first steps when setting up a New Mexico business is setting up a business bank account and establishing business credit. This will help you keep good accounting records and avoid commingling funds.
If you need startup capital, you can get connected to grants, other funding, and tax benefits through the New Mexico Finance Authority or the Finance New Mexico web portal. You can explore federal resources—the US Small Business Administration is a great place to start. There is a district SBA office in Albuquerque serving the entire state of New Mexico.
Finally, you may want to consider business insurance to provide additional protection for your assets. In the state of New Mexico, the Superintendent of Insurance administers and enforces insurance law. The state requires workers’ compensation insurance (coverage for work-related illnesses and workplace injuries) and auto insurance for work vehicles. Other policies are techically optional, but could be required for if you are trying to rent property or obtain a loan. These other types of business insurance include:
- Professional liability insurance
- Commercial general liability insurance
- Unemployment insurance
6. Market your New Mexico business
To make sure your business grows at a good pace, you will probably need to consider some marketing plans. Research your market and your consumer base so that you can make smart decisions about what kinds of marketing strategies make sense for your business. Options include:
- Digital marketing. This includes everything from websites and social media accounts to more sophisticated pay-per-click web ads, social media influencer campaigns, SEO strategy, and more.
- Print marketing. This means flyers, signs, banners, business cards, and more.
- TV and radio ads. These traditional ads can be expensive, but they reach a large audience.
Following these simple steps will help you get your New Mexico business started quickly and correctly. If you’re feeling overwhelmed or just want an expert to review things, set up a free consultation with our Prime advisors. We’ve been doing this a long time, and we’ve helped thousands of entrepreneurs and small business owners get started on their journeys. We can help you too!