How Much Does It Cost to Start a Business in California?
Last updated: May 2026
California Business Overview
LLC Filing Fee
$70
Sales Tax Rate
7.3%
Minimum Wage
$16.9/hr
Cost of Living Index
142.2
Workers Comp
Required
Annual Report Fee
$20
Starting a Business in California
California requires businesses to register with the Secretary of State and obtain local permits. Most cities require a business license and some require additional permits for specific industries.
California has a progressive income tax with rates up to 13.3% — the highest in the nation. LLCs pay an $800 minimum franchise tax annually plus a gross receipts fee.
California LLCs file a Statement of Information every two years ($20, form LLC-12, per https://www.sos.ca.gov/business-programs/business-entities/forms/limited-liability-companies-statement-information) and corporations file annually ($25, form SI-550, per https://www.sos.ca.gov/business-programs/business-entities/forms/corporations-statement-information) with the Secretary of State — these are the stored annualReportFee path. Separately, all LLCs and corporations owe a minimum $800/year franchise tax to the Franchise Tax Board (see https://www.ftb.ca.gov/file/business/types/), distinct from SoS filing fees. High minimum wage, strict environmental regulations, and premium commercial rents make California one of the most expensive states for startups.
For official formation documents, visit the California Secretary of State.
Startup Costs for 100 Business Types in California
The table below shows estimated startup costs for every major business type, adjusted for California’s cost of living index of 142.2. Click any column header to sort. Click a business name to see full cost breakdowns, calculator, and licensing requirements.
| Accounting Firm | Professional Services | $10,640 | $30,400 | $69,920 |
| Airbnb & Vacation Rental Business | Real Estate | $16,720 | $45,600 | $136,800 |
| Ambulance Service | Transportation & Logistics | $121,600 | $304,000 | $760,000 |
| App Development Company | Tech & Online | $15,200 | $45,600 | $121,600 |
| Architecture Firm | Professional Services | $30,400 | $83,600 | $197,600 |
| Auto Detailing Business | Automotive | $7,600 | $45,600 | $152,000 |
| Auto Repair Shop | Automotive | $114,000 | $304,000 | $760,000 |
| Bakery | Food & Beverage | $30,400 | $144,400 | $456,000 |
| Bar & Nightclub | Food & Beverage | $152,000 | $532,000 | $1,292,000 |
| Barbershop | Beauty & Personal Care | $22,800 | $98,800 | $266,000 |
| Beauty Supply Store | Beauty & Personal Care | $45,600 | $152,000 | $456,000 |
| Bookstore | Retail | $38,000 | $152,000 | $456,000 |
| Brewery / Microbrewery | Food & Beverage | $380,000 | $608,000 | $2,280,000 |
| Cannabis Dispensary | Specialty & Regulated | $189,240 | $504,640 | $1,892,400 |
| Car Wash | Automotive | $189,240 | $826,880 | $2,362,080 |
| Carpentry & Woodworking Shop | Construction & Trades | $15,960 | $42,560 | $106,400 |
| Catering Business | Food & Beverage | $18,240 | $80,560 | $197,600 |
| Chiropractic Office | Health & Wellness | $152,000 | $182,400 | $456,000 |
| Cleaning Business | Home Services | $2,280 | $16,720 | $56,240 |
| Clothing Boutique | Retail | $45,600 | $152,000 | $456,000 |
| Coffee Shop | Food & Beverage | $91,200 | $182,400 | $532,000 |
| Concrete Business | Construction & Trades | $38,000 | $98,800 | $228,000 |
| Consulting Business | Professional Services | $3,040 | $13,680 | $39,520 |
| Convenience Store | Retail | $76,000 | $425,600 | $1,140,000 |
| Courier & Delivery Service | Transportation & Logistics | $12,160 | $33,440 | $83,600 |
| Cybersecurity Firm | Tech & Online | $30,400 | $83,600 | $228,000 |
| Dance Studio | Childcare & Education | $30,400 | $121,600 | $380,000 |
| Daycare Center | Childcare & Education | $91,200 | $273,600 | $760,000 |
| Demolition Company | Construction & Trades | $45,600 | $121,600 | $304,000 |
| Dental Practice | Health & Wellness | $532,000 | $760,000 | $1,520,000 |
| Digital Marketing Agency | Tech & Online | $6,080 | $18,240 | $48,640 |
| E-Commerce Store | Tech & Online | $7,600 | $22,800 | $76,000 |
| Electrical Business | Home Services | $22,800 | $83,600 | $243,200 |
| Esthetics & Skincare Business | Beauty & Personal Care | $12,160 | $60,800 | $182,400 |
| Excavation Company | Construction & Trades | $76,000 | $197,600 | $532,000 |
| Financial Planning Practice | Professional Services | $30,400 | $83,600 | $197,600 |
| Flower Shop | Retail | $30,400 | $114,000 | $304,000 |
| Food Delivery Service | Food & Beverage | $15,200 | $79,040 | $197,600 |
| Food Processing Business | Food & Beverage | $304,000 | $380,000 | $1,140,000 |
| Food Truck | Food & Beverage | $68,400 | $182,400 | $304,000 |
| Freight Brokerage | Transportation & Logistics | $24,320 | $54,720 | $121,600 |
| Furniture Store | Retail | $76,000 | $304,000 | $912,000 |
| General Contracting Business | Construction & Trades | $30,400 | $83,600 | $197,600 |
| Ghost Kitchen | Food & Beverage | $30,400 | $91,200 | $228,000 |
| Gift Shop | Retail | $30,400 | $106,400 | $304,000 |
| Gym & Fitness Center | Health & Wellness | $76,000 | $380,000 | $1,520,000 |
| Hair Salon | Beauty & Personal Care | $22,800 | $114,000 | $380,000 |
| Handyman Business | Home Services | $3,040 | $15,200 | $50,160 |
| Home Health Care Agency | Health & Wellness | $60,800 | $197,600 | $456,000 |
| HVAC Business | Home Services | $30,400 | $106,400 | $304,000 |
| Ice Cream Shop | Food & Beverage | $30,400 | $114,000 | $304,000 |
| Insurance Agency | Professional Services | $22,800 | $60,800 | $136,800 |
| IT Services Business | Tech & Online | $22,800 | $60,800 | $152,000 |
| Juice Bar & Smoothie Shop | Food & Beverage | $38,000 | $136,800 | $380,000 |
| Landscaping Business | Home Services | $15,200 | $60,800 | $182,400 |
| Laundromat | Real Estate | $152,000 | $380,000 | $912,000 |
| Law Firm | Professional Services | $18,240 | $51,680 | $123,120 |
| Limousine & Car Service | Transportation & Logistics | $60,800 | $136,800 | $334,400 |
| Liquor Store | Retail | $76,000 | $273,600 | $760,000 |
| Marketing Agency | Professional Services | $7,600 | $27,360 | $76,000 |
| Martial Arts Studio | Childcare & Education | $30,400 | $106,400 | $304,000 |
| Meal Prep Business | Food & Beverage | $30,400 | $98,800 | $304,000 |
| Med Spa | Health & Wellness | $152,000 | $532,000 | $1,520,000 |
| Medical Practice | Health & Wellness | $228,000 | $608,000 | $1,520,000 |
| Mental Health Practice | Health & Wellness | $22,800 | $76,000 | $228,000 |
| Moving Company | Home Services | $45,600 | $152,000 | $456,000 |
| Music School | Childcare & Education | $15,200 | $76,000 | $228,000 |
| Nail Salon | Beauty & Personal Care | $30,400 | $136,800 | $380,000 |
| Painting Business | Home Services | $7,600 | $38,000 | $121,600 |
| Personal Training Business | Health & Wellness | $7,600 | $38,000 | $152,000 |
| Pest Control Business | Home Services | $15,200 | $60,800 | $182,400 |
| Pet Store | Retail | $45,600 | $152,000 | $456,000 |
| Pharmacy | Health & Wellness | $380,000 | $608,000 | $1,520,000 |
| Physical Therapy Clinic | Health & Wellness | $91,200 | $273,600 | $684,000 |
| Pizza Shop | Food & Beverage | $114,000 | $266,000 | $608,000 |
| Plumbing Business | Home Services | $22,800 | $76,000 | $228,000 |
| Podcast Production Company | Tech & Online | $3,040 | $9,120 | $27,360 |
| Preschool | Childcare & Education | $76,000 | $228,000 | $608,000 |
| Property Management Company | Real Estate | $15,960 | $36,480 | $83,600 |
| Real Estate Agency | Professional Services | $15,200 | $42,560 | $106,400 |
| Real Estate Investing & Rental Business | Real Estate | $38,000 | $114,000 | $380,000 |
| Restaurant | Food & Beverage | $266,000 | $570,000 | $1,140,000 |
| Roofing Company | Home Services | $22,800 | $91,200 | $273,600 |
| SaaS Company | Tech & Online | $30,400 | $91,200 | $304,000 |
| Spa & Massage Therapy | Health & Wellness | $15,200 | $106,400 | $380,000 |
| Staffing Agency | Professional Services | $30,400 | $83,600 | $228,000 |
| Storage Unit Facility | Real Estate | $304,000 | $912,000 | $3,040,000 |
| Tattoo Shop | Beauty & Personal Care | $30,400 | $89,680 | $304,000 |
| Tax Preparation Business | Professional Services | $5,320 | $15,200 | $41,040 |
| Thrift Store | Retail | $30,400 | $114,000 | $304,000 |
| Tire Shop | Automotive | $76,000 | $228,000 | $608,000 |
| Towing Company | Automotive | $76,000 | $228,000 | $608,000 |
| Trucking Company | Transportation & Logistics | $45,600 | $121,600 | $304,000 |
| Tutoring Business | Childcare & Education | $3,040 | $36,480 | $152,000 |
| Used Car Dealership | Automotive | $76,000 | $304,000 | $912,000 |
| Vape Shop | Retail | $38,000 | $114,000 | $304,000 |
| Web Development Agency | Tech & Online | $5,320 | $18,240 | $50,160 |
| Welding Business | Construction & Trades | $22,800 | $60,800 | $152,000 |
| Winery | Food & Beverage | $760,000 | $1,158,240 | $4,560,000 |
| Yoga Studio | Health & Wellness | $22,800 | $121,600 | $304,000 |
Most Popular Business Types in California
Restaurant
Food & Beverage
$266,000 – $1,140,000
Food Truck
Food & Beverage
$68,400 – $304,000
Real Estate Agency
Professional Services
$15,200 – $106,400
Gym & Fitness Center
Health & Wellness
$76,000 – $1,520,000
Cleaning Business
Home Services
$2,280 – $56,240
Web Development Agency
Tech & Online
$5,320 – $50,160
Licenses & Permits in California
General Business License
California does not have a statewide general business license, but most cities and counties require a local business license or business tax certificate. Businesses must register with the California Secretary of State for entity formation, obtain a seller's permit from the California Department of Tax and Fee Administration if selling taxable goods, and register with the EDD for payroll taxes if employing workers. San Francisco, Los Angeles, and other major cities have their own business registration and tax requirements.
Industry-Specific Licenses
- Food Facility Permit — California Department of Public Health or County Environmental HealthCost: Varies — contact agency • Renewal: Annual
- Contractor's License — California Contractors State License Board (CSLB)Cost: Varies — contact agency • Renewal: Biennial
- Cosmetology Establishment License — California Board of Barbering and CosmetologyCost: Varies — contact agency • Renewal: Biennial
- Real Estate Broker License — California Department of Real EstateCost: Varies — contact agency • Renewal: Every 4 years
- Child Care Center License — California Department of Social Services — Community Care LicensingCost: Varies — contact agency • Renewal: Biennial
- Alcoholic Beverage License — California Department of Alcoholic Beverage Control (ABC)Cost: Varies — contact agency • Renewal: Annual
- Landscaping Contractor License (C-27) — California Contractors State License Board (CSLB)Cost: Varies — contact agency • Renewal: Biennial
- Motor Carrier Permit — California Department of Motor VehiclesCost: Varies — contact agency • Renewal: Annual
- Auto Repair Dealer Registration — California Bureau of Automotive RepairCost: Varies — contact agency • Renewal: Biennial
Home-Based Business Rules
California's Home Occupation Ordinance varies by city but generally allows home-based businesses that don't generate customer traffic, employ non-resident workers, or create visible commercial activity. AB 2221 expanded rights for home-based food businesses under the Homemade Food Operations Act. Some cities, including Los Angeles, have updated their home occupation rules to allow more types of businesses post-pandemic.
California Business Resources
SBA District Office
California SBA District Offices — Los Angeles, San Diego, San Francisco, Fresno, Sacramento
Secretary of State
https://www.sos.ca.gov/business-programsZoning Information
California cities have detailed zoning codes. Commercial leases in urban areas often require conditional use permits for food service, alcohol, or other regulated uses.
Health Department Notes
Food establishments require a permit from the local county health department. California has strict food handler certification requirements and regular inspections.
Workers Compensation
Required for all employers with one or more employees. California has the most complex workers comp system in the US with high premiums.