You can still do business in CA regardless of where you incorporate. You'll still need to pay taxes in CA, but the benefit Nevada provides (like Delaware) is pro-employer legal language and well defined laws. The other benefit is if you take financing later from an investor, they will appreciate that the company is established in NV or DE.

Congratulations on your growing startup! I'm a business lawyer and I've formed hundreds of corporations, LLCs, and partnerships.

Incorporation sounds like the right next step for you. However, I'm not sure NV is the right answer. Some people choose NV because of its perceived privacy protection, but I actually prefer the protections offered by other states, including Delaware. You'll also hear people tell you that you can save on taxes by incorporating in Nevada, but this isn't necessarily true. If you're operating offices in CA and MI, you'll need to register as a "foreign corporation" in those states, and you may be subject to their taxes anyway.

I would suggest Delaware or California, but I'd need to know a bit more to give you the pros and cons of each and ultimately make a recommendation. If you'd like to arrange for a call, I'd be happy to speak.