Starting a business in Missouri is a step-by-step process. First, research your market and know your audience.
Then, choose a legal structure for your business, like a sole proprietorship or LLC, and register it with the state. Make sure to get the necessary licenses and permits for your specific industry.
Create a business plan outlining your goals and budget. Obtain an Employer Identification Number (EIN) from the IRS for tax purposes.
Build your online presence, connect with local businesses, and provide excellent products or services. By following these steps, you can start and grow your business in Missouri.
Write A Detailed Business Plan
Before you start spending money on the other aspects of starting the business in this state, your main focus should be to write a detailed business plan.?
You must define and determine what products you will deal in and who are going to be your customers. Are you going to cater to B2B businesses, or are you a B2C business?
What are the market conditions, and who are your competitors?
If you analyze these things, you will better understand your further plans.
Note ?️: A detailed business plan can offer you a range of options further. You will have a clear target in mind, and there will also be clarity about the niche you must cater to.
Set A Clear Budget For Your Business
Creating a budget plan for your business from the start is crucial. As you move further, you will come across many costs like license fees, rent, transportation, incorporation fees, equipment purchase costs, and so on.?
Consider what’s going to be your overhead expenses. Also, determine the one-time expenses and the special expenses that you may have to pay in the process.
Starting a small business in Missouri might cost you approximately USD 5000 to USD 18000. But, the actual costs and budget depend on your chosen business model.
Tip ?: If you have a budget sheet ready for your business, you can take practical financial decisions which will help you to estimate your actual income later.
Decide On The Ownership Structure
It is ideal to decide at the initial stages only which ownership structure you have been looking for.
There are different types of legal ownership structures in a business, and a few very common structures adopted in Missouri include Sole Proprietary Business, Corporation, Limited Liability Company, and Partnerships.
Many small businesses in Missouri are sole proprietary businesses. Individuals handle these businesses.
While they file the tax return, all the business income and personal income are taxed in one return only.
However, the disadvantage of this structure is that the proprietors become personally liable for any legal charges on the business or any issues or debts that the business faces.
When it comes to raising funds, starting C Corporations in Missouri will help as they facilitate stocks to the shareholders, and the funding comes on its own.
The only downside is that corporations face double taxation, one for the income and the other when the income is distributed among the shareholders.
On the other hand, the benefit is, the corporations get personal protection of their assets, and the liability also becomes limited.
In January 2020, the corporate income tax in Missouri dropped to 4 percent. This step has also made many individuals start corporations in Missouri.
A partnership business is much like a sole proprietary business. T
he only thing that differs here is that there are two or more individuals in the partnership instead of individuals. But their liability is not limited.
Limited Liability Company
In a limited liability company, there are multiple owners. They are taxed on individual incomes like in sole proprietary business. But, they enjoy limited liability and asset protection. LLCs can avoid filing annual reports.
As per the available reports, there are approximately 127000 LLCs in Missouri.
With the above approaches, you can decide which legal structure is apt for your business.
It is important to note that, in Missouri, if you start a corporation or LLC, there will be a unique registration process.
You have to file your Articles Of Association and also pay a fee. You have to register your business with the Secretary Of State’s Office.
Tip ?: Choose the legal structure of your business that seems perfect depending on the benefits you get in taxes or protection you get for your assets.
Analyze all the structures in detail and then select the suitable one for your business.
Create A Name For Your Business
Now, you must name your business, and while doing so, keep the following things in mind:
- Be original and choose a name that defines your products or services.
- The name should be unique and not be confused with any government organization or entity.
- The name should not be the same as any other business.
Tip ?: Once you have decided a name for your business, you must file the name reservation application with the Missouri Secretary Of State.
You will have to pay a name reservation fee of USD 25. While reserving the name, also inform them about your legal structure, as an LLC or Corporation, etc.
Apply For The Required Licenses And Permits
Carrying out a business in Missouri is hassle-free because there are few licenses and permits.
There is no state-wide license. If you deal in tangible goods or taxable services, then you are supposed to avail of a sales tax license.
To avail of this sales tax license, you are not required to pay anything. It is free of cost. ?
Note ?️: If your business should take any special permits, then you should check with the local clerk’s office and figure out what special permits are needed.
Arrange For EIN Number And Bank Account
Apply for an EIN Number because that will be needed while you are starting the new bank account.
As you are done with the EIN, I would suggest the next step is to start the business bank account.
As the new business starts selling the products and receives the money, the bank account should also be ready simultaneously. A new bank account will help to keep personal and business accounting separate.?
Tip ?: You can apply for an Employer Identification Number on the IRS website. This number is crucial if you are hiring employees for the business or if you will pay taxes to the state and the federal government.
Find The Best Location For Your Business
Starting a business in Missouri is itself an excellent decision because it is centrally located and enjoys an excellent infrastructure. ?
If you are dealing in tangible goods, you will never have an issue with logistics because there’s a perfect road system, airways, and rail systems in Missouri. There are a wide variety of businesses that have thrived and grown in Missouri.
If you are looking forward to starting a small or medium-scale business in Missouri, then choose a location that will help you in every little way. Missouri is already a home for big giants like Bayer Crop Science and Wells Fargo Advisors. ?
Note ?️: Along with business skills, you must also be smart enough to choose the right location for your business.
I have seen many good companies succeed because they could choose an excellent location for their retail venture or office.
Determine The Finances You Will Need For Business Operations
Even though you might have estimated a budget at the start of your business, you will notice that many other costs will be added as you get ahead and move step by step.
Like, while I was inquiring with my friends about whether they could stick to their budgets or not, during the initial phase of the business, the answer was NO. ?
My friends said that the budgets went slightly higher later because a few things like social media management, digital marketing, and online marketing campaigns were not estimated at the start.
In Missouri, there are many small businesses and obviously much competition too. It is therefore obvious that you must arrange for finances promptly so that you can take care of the business operation expenses and even the marketing expenses.
How much funds did you have when you started? We would love to know how it workedd for you and for our fellow interested people.
Note ?️: You must always keep some funds extra as there will be many expenses like warehouses, marketing costs, logistics costs, rent and social media marketing costs.
As you determine the finances, also find the sources from where you can find the funds. Either you self-fund your business, take a business loan, or raise capital with the help of shareholders.?
Insure Your Business
Every business should seek insurance to keep private assets protected. If there are some legal issues with the business, then the costs that come up will be paid by the insurance company if your business is insured.
I had a few friends who had to bear the brunt of not staying agile and avoiding business insurance. They did not want to pay premiums, and this led them to get into many financial burdens later.?
Tip ?: Insurance is crucial for liability protection and workers’ compensation. You can figure out the different insurance policies in Missouri and determine which business insurance seems to be perfect for you.
Decide What’s Your USP To Make Your Business Successful?
Starting a business in Missouri will be rewarding if you have a well-established plan. But, along with the right business operations, you ought to also determine the USP of your business.
Many innovative entrepreneurial communities in Missouri preach innovation and enthusiasm.
If you can figure out the USP of your business and also become part of these collaborative communities to share each other’s ideas and innovative approaches, then it can also provide immense help.?
Missouri’s Licensing Requirements for Contractors
Missouri’s licensing requirements for contractors are stringent and designed to ensure the competence and reliability of those in the construction industry.
To obtain a contractor’s license, applicants typically need to pass a comprehensive exam, demonstrate financial responsibility, provide proof of insurance, and show relevant experience.
The state offers various license classifications for different specialties within the construction trade.
Adhering to these regulations helps protect consumers by ensuring that contractors are qualified and accountable, ultimately promoting the quality and safety of construction projects throughout Missouri.
Software to Improve Your Business
In today’s fast-paced business landscape, leveraging cutting-edge software is essential for staying competitive and efficient.
Software solutions tailored to your specific industry and needs can streamline processes, enhance productivity, and boost profitability.
Whether it’s customer relationship management (CRM) systems, project management tools, accounting software, or data analytics platforms, these technologies empower businesses to make data-driven decisions, optimize resource allocation, and provide exceptional customer experiences.
Investing in the right software can be a game-changer, propelling your business toward success in the digital age.
Top Missouri Business Fields
Missouri, located in the central United States, has a diverse economy with several thriving business fields. The top business fields in Missouri include:
Agriculture has historically been a significant industry in Missouri. The state is known for its production of corn, soybeans, livestock, and poultry.
Missouri has a strong manufacturing sector, with industries like aerospace, automotive, and food processing. St. Louis and Kansas City are notable hubs for manufacturing companies.
The healthcare industry is a major driver of the Missouri economy, with several renowned medical institutions and hospitals, including the Barnes-Jewish Hospital in St. Louis and the University of Missouri Health Care system.
Missouri has seen a growing tech industry, particularly in cities like St. Louis and Kansas City. These cities are home to tech startups, IT companies, and innovation hubs.
The financial sector, including banking and insurance, plays a crucial role in Missouri’s economy. Kansas City is home to several major financial institutions.
Higher education institutions such as the University of Missouri and Washington University in St. Louis contribute significantly to the economy through research, education, and innovation.
Tourism and Hospitality:
Missouri’s natural beauty, historical sites, and recreational opportunities make tourism and hospitality important industries. Branson, in particular, is a popular tourist destination.
Transportation and Logistics:
Due to its central location in the U.S., Missouri is a hub for transportation and logistics. Cities like St. Louis and Kansas City are major transportation centers with extensive rail and highway networks.
Besides traditional agriculture, agribusiness plays a crucial role in Missouri’s economy. This includes food processing, distribution, and related industries.
Missouri has a growing renewable energy sector, including wind and solar power generation. The state is also involved in traditional energy sources like coal and natural gas.
Aerospace and Defense:
Missouri hosts numerous aerospace and defense companies, including Boeing and numerous suppliers. The industry is concentrated around the St. Louis area.
Retail is a significant contributor to Missouri’s economy, with various shopping centers, outlets, and retail chains.
Pros and Cons of Doing Business in Missouri
- Central Location
- Affordable Living Costs
- Skilled Workforce
- Business Incentives
- Low Business Costs
- Limited access to ports
- State income tax
- Sales tax on business inputs
- Weather-related challenges
- Limited public transit
Starting a business in Missouri is an exciting journey. By following the rules, researching the market, and planning well, you can build a strong foundation for success. Missouri is a great place for new businesses, with support and resources to help you thrive.
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Business, marketing, and blogging – these three words describe me the best. I am the founder of Burban Branding and Media, and a self-taught marketer with 10 years of experience. My passion lies in helping startups enhance their business through marketing, HR, leadership, and finance. I am on a mission to assist businesses in achieving their goals.