Starting a Business in Tennessee: Entrepreneur’s Roadmap

Starting a business in Tennessee is more than just registering a company; it’s about building something meaningful in one of the most pro-business states in the U.S. With its low taxes, growing cities, and supportive infrastructure, Tennessee is an excellent place for entrepreneurs looking to make their mark.

Whether you’re planning on starting a small business in TN or launching a scalable startup, this guide provides the structure and insights you need to move forward. It also includes a practical starting a business in Tennessee checklist, trending opportunities, and foundational steps to success.

Starting a Business in Tennessee Checklist: Step-by-Step

Let’s walk through the essential starting a business in Tennessee checklist. These are the core legal and operational steps every entrepreneur should follow.

1. Define Your Business Idea and Niche

Begin by clarifying what you want to offer and who you aim to serve. Do thorough market research. Understand your customer base, competitors, and regional demand. Some of the best business to start in Tennessee include:

• Cleaning services
• Food trucks or delivery kitchens
• Fitness or wellness coaching
• Digital marketing agencies
• Childcare or tutoring centers
• Boutique retail or e-commerce brands

The right niche depends on your strengths and the demand in your local area.

2. Choose a Legal Business Structure

One of the earliest steps to opening a business in Tennessee is selecting a legal entity. Your options include:

• Sole proprietorship – simple and low-cost, but no liability protection
• LLC (Limited Liability Company) – the most popular option for small business owners in TN
• Corporation (S-Corp or C-Corp) – ideal for startups seeking investors
• Partnership – suitable when two or more people want to co-own

3. Name and Register Your Business

Once you’ve chosen a structure, pick a unique name that reflects your brand. You’ll need to:

• Check business name availability on the Tennessee Secretary of State’s website.
• Register your entity online by filing the required documents:
• Articles of Organization (for LLCs)
• Charter (for corporations)
• Pay the registration fee, typically around $300 for an LLC.

After approval, you’ll receive a certificate of formation confirming your legal registration.

Checklist for Starting a Business in Tennessee

4. Apply for an EIN

An Employer Identification Number (EIN) is like a social security number for your business. It’s required to:

• Open a business bank account
• File business taxes
• Hire employees

You can obtain an EIN for free through the IRS website in minutes.

5. Register for State Taxes

Depending on your business activities, you may need to register with the Tennessee Department of Revenue for:

• Sales and use tax
• Franchise & excise taxes
• Business tax (required for gross receipts over $10,000)

Use the TNTAP portal to handle registrations and payments online.

6. Get Your Business License

Most Tennessee businesses are required to obtain a county business license. Some cities or municipalities may also have their own requirements.

Licensing fees typically range from $15 annually in some areas but can be as high as $100 elsewhere yearly. Zoning permissions may vary significantly by city and county, especially if you operate a mobile service or home-based business.

Opening a Business in Tennessee: Practical Needs

Once the legal groundwork is set, your focus should turn toward operational readiness. This includes finances, staffing, and digital presence.

What it takes to open a business in Tennessee

1. Open a Business Bank Account

Separate your business and personal finances by opening a dedicated business checking account. Most banks require:

• EIN
• Certificate of formation
• Operating agreement (for LLCs)
• Valid ID

Local banks and credit unions like Pinnacle Bank, First Horizon, and regional branches of national banks offer competitive packages for startups.

2. Get Insurance Coverage

Insurance is not just a formality; it protects your assets and builds credibility. Coverage may include:

• General liability insurance
• Workers’ compensation (mandatory for 5+ employees)
• Property insurance
• Cybersecurity or professional liability insurance (for digital businesses or consultants)

Some industries require additional bonding or regulatory policies.

3. Set Up Bookkeeping and Accounting Systems

Use platforms like QuickBooks, FreshBooks, or Zoho Books to track:

• Revenue and expenses
• Payroll (if hiring staff)
• Tax filings
• Invoicing and cash flow

Consider working with a Tennessee-based accountant familiar with the state’s franchise and excise tax system.

4. Build Your Online Presence

In today’s market, having a digital footprint is non-negotiable. Start with:

• A professional website with clear service or product offerings
• Google Business Profile for local search visibility
• Social media accounts based on your target audience
• Optional: local online directories, Yelp, and industry-specific platforms

Digital marketing becomes the most cost-effective channel for entrepreneurs starting small businesses in TN, and acquiring customers rapidly becomes a major goal.

Best Business to Start in Tennessee in 2025

Choosing the best business to start in Tennessee depends on your skills and the economic trends shaping the state. Here are categories with growing demand:

E-Commerce and Digital Retail

Low overhead and Tennessee’s tax benefits make it attractive for online sellers, especially in fashion, handmade crafts, or regional goods.

Home Improvement Services

With residential growth booming, services like painting, remodeling, landscaping, and plumbing remain in demand.

Health and Wellness Businesses

From personal training and yoga studios to mental health consulting and mobile wellness apps, there’s a growing appetite for self-care and health optimization.

Childcare and Educational Support

More working parents and hybrid work schedules drive demand for flexible, licensed childcare services, after-school programs, and tutoring centers.

Food and Beverage Startups

Whether it’s a speciality coffee cart, Southern BBQ joint, or a plant-based kitchen, food ventures in Tennessee have enormous local support, especially when built on strong branding and community engagement.

Choosing the best business to start in Tennessee

Marketing and Scaling Your Tennessee Business

Once you’re officially opening a business in Tennessee, the next challenge is growing visibility and sales. Focus on:

Local SEO

Ensure your business ranks on Google Maps and local search queries by optimizing your listings. Add photos, collect reviews, and update your hours.

Community Partnerships

Tennessee communities are tight-knit. Join local chambers of commerce, sponsor local events, or offer introductory deals to create word-of-mouth buzz.

Paid Advertising

Test Facebook, Instagram, or Google Ads with small budgets to build brand awareness quickly.

Email and SMS Marketing

Even with modest subscriber lists, consistent messaging can keep customers engaged and returning.

Marketing Strategies for Your Tennessee Business

Resources for Starting a Small Business in TN

Take advantage of these Tennessee-based support systems:

• TSBDC (Tennessee Small Business Development Centers) – Offers free consulting and business planning tools.
• LaunchTN – Statewide organization providing access to accelerators, grants, and pitch competitions.
• Pathway Lending – A nonprofit CDFI that offers microloans and educational resources.
• Tennessee Smart Start Guide – Free publication from the Secretary of State’s office for new business owners.

Entrepreneurs setting up business for the first time find such resources remarkably helpful in spurring quite substantial growth pretty rapidly.

Final Thoughts

With lively metropolitan hubs and supportive rural environments, Tennessee is home to some of the most vibrant new businesses of 2025. Whether you want to create a service-oriented business, an online shop or a craft coffee shop, opportunities abound to start a business in Tennessee.

Beyond your checklist of starting a business in Tennessee and securing your registrations, building brand recognition and linking up to your local market is crucial to ensuring long-term viability.