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A whopping majority of Missouri’s landscape is considered rural, making agriculture and forestry one of the top industries along with manufacturing, mining, and power. As the home of Boeing Defense, Space, and Security, it’s also widely regarded in the realm of aerospace and defense.
Putting it simply, Missouri is a great place for businesses that need a lot of affordable space, though cities like St. Louis and Kansas City also provide unique opportunities and a larger pool of local consumers.
If you’re looking for info on how to start a business in Missouri, then this guide can help you get started.
Missouri helps simplify the process of opening and operating a new business with their online business portal, which allows you to register for permits, hire employees, and seek government assistance. You’ll also likely need to deal with the Missouri Secretary of State, which has its own Business Outreach Office. Additional guidance can be found through the Missouri Department of Revenue.
Overall, the process is not too dissimilar from that of other states, and the following checklist can help keep you on track.
Business plans do more than just help keep a new business on track. They’re also crucial if you need to land investor funding or score a business loan. They’re an essential way to prove your business idea has a chance to be viable.
When you create a business plan, consider doing the following:
All businesses have to choose a business structure. The most common types are limited liability companies (LLCs), corporations, partnerships, and sole proprietorships. Your choice of business structure has a critical impact on taxation and potential liability.
Sole proprietorships and general partnerships (GPs) are the easiest type of business structure to set up because they don’t require registration with the state. With a sole proprietorship or GP, you can start doing business today.
Taxes are also simple since income is taxed on your personal tax return. However, sole proprietorships and GPs have a major drawback. If the business gets into financial trouble, such as being sued or going into debt, your personal assets are at risk, including your house, car, bank accounts, and even your kid’s college fund.
There are two types of corporations: the C corporation and S corporation. C corporations require more paperwork to get started, but they offer liability protection. That means that as long as the business stands, you are not personally liable for business debts, and your personal assets are safe.
However, income gets taxed twice — once at the corporate level and a second time on the shareholders’ personal tax returns. S corporations only tax the money at the personal level, but they’re harder to qualify for.
The “best of both worlds” for many entrepreneurs is the limited liability company (LLC). LLCs are “pass-through” organizations for tax purposes. In other words, the income is taxed only on your personal tax return. LLCs also offer liability protection, so if the business gets into trouble, your personal assets are protected.
Both corporations and LLCs must appoint a registered agent and file their corresponding articles (Articles of Organization for LLCs, Articles of Incorporation for corporations) with the Missouri Secretary of State. Filing fees will vary. If you need help getting a registered agent in Missouri, we can help.
It’s important to understand your overall business costs. This can help you figure out how much startup capital you’ll need and budget for the future without going broke. Remember to always add a six-month cushion in case of an emergency.
To determine how much it will cost to run your business, add up:
Most small business owners don’t have enough startup capital hanging around in their back pockets, so they’ll need to find funding. Business credit cards may work for smaller, one-time purchases, but most entrepreneurs will eventually search for a business loan. This can be done through the Small Business Administration (SBA) or a bank. Missouri also has a small business loan program.
Both Missouri and the federal government have a number of available grants and resources. The state’s Department of Economic Development has incentives and financing options listed on its website. If your business has been affected by the COVID-19 pandemic, the Missouri Department of Labor may also be able to help.
Next, you’ll need to settle on a business name. The key point here is that the name needs to be unique in the state of Missouri. If it’s not, your LLC or corporation filing will be rejected. To find out if the name you’ve chosen is unique, use Missouri’s online business name search tool.
For a sole proprietorship or general partnership, you’ll have to do business under your own name unless you register for a “doing business as” (DBA) name. For instance, if your name is Kevin Cogswell, and your company is a sole proprietorship, it’ll have to be called “Kevin Cogswell” unless you sign up for a DBA or “fictitious name.”
With a DBA, you can call your business “Cogswell’s Cakes” or any other name you like. If you need a DBA, you can register one with us. Per Missouri state law, any company using a DBA or fictitious name must file a fictitious name registration form with the secretary of state.
Check local business registrations to make sure your name isn’t already taken, otherwise, you may face legal issues from other companies. Some corporations and LLCs also use DBA names for marketing and business purposes. For instance, a restaurant may run a catering operation on the side, using a DBA name to differentiate both business lines. If you’ve chosen a name and are still in the process of setting things up, we can reserve a business name for you.
The best business name is simple enough to help you form an online presence through domain registration and social media profiles. It’s also distinct enough to define your brand identity and stand out in a sea of competitors. If you’ve decided to have a business website, then register the domain name with us.
Once you have a business name, you need to finish the rest of the paperwork. There can be a lot, so it’s best to stay organized.
Keep the following in mind when registering your business:
In Missouri, not all companies need a business license. You’ll need to check with your local city clerk. For example, in St. Louis, all businesses need a Graduated Business License (GBL) and may also need industry-specific licenses. If you’re selling tangible personal property or services, you will also need a retail sales tax license unless you qualify for an exemption.
Most businesses need some kind of insurance if only to protect the business’s assets. Most commonly, businesses have general liability insurance. If you hire employees, you’ll have to pay into things like workers’ compensation insurance and disability insurance.
Depending on the business, you may need specialized insurance like a commercial auto policy or event insurance. You can find out more information through the Missouri Department of Insurance.
A great marketing strategy will get consumers through your door. These days, the focus is heavily on digital. This includes a comprehensive cross-platform strategy on social media platforms like Facebook, Instagram, LinkedIn, Twitter, and YouTube.
You may also want to adopt a search engine optimization (SEO) strategy to improve your search engine ranking (i.e., where you show up in a Google Search). This is a big task, so if you’re not sure about digital marketing, consider finding professionals to do this for you.
Additionally, you may want to sign up for Yelp, Google My Business, Angie’s List, and other local business registrations. Print advertising can also be a good option, especially with a local approach, but it’s generally more expensive.
Missouri is one of the friendlier states to launch a business. It has one of best business tax climates in the United States, and a lot of that has to do with how Missouri corporations are taxed. The state claims it’s the West North Central leader in corporate expansion and one of the fastest-growing states for tech jobs.
Missouri has some of the lowest corporate taxes in the nation, set at a rate between 4% and 6.25%. This change was administered in the 2020 tax year by the Chamber of Commerce and Industry as an initiative to help bring more businesses to the state and expand the operations of existing companies.
Beyond that, Missouri’s Department of Economic Development has a number of business resources for startups and existing firms, particularly in the world of tech and IT.
For the would-be business owner, choosing the best business entity is important for how you’ll want to run things. Here are a few business entity types to consider:
It may be in your best interest to reach out to a business attorney to help you understand each of these in more detail before making a decision.
Missouri is a growing hot-spot for technology companies, and the state has crafted numerous incentives to bring in more startups. Still, that’s not the only type of company that can succeed. Since Missouri is largely rural and has relatively low property costs, it’s a great place to start a farming or manufacturing business that needs large warehouses or a lot of space.
In recent years, Missouri has made an effort to attract new businesses amidst stagnant growth. In terms of economic expansion, it’s got a lot of untapped potential. Cheaper living and business costs make it an excellent place to launch a business that will thrive in a rural environment.
You can visit the Missouri Secretary of State’s website for a comprehensive list of basic filing costs for a variety of business structures in Missouri.
LLCs have a $50 startup fee if you’re filing online and a $105 fee to file by mail, but these are only the basic fees for filing Articles of Organization.
The Bureau of Labor Statistics doesn’t have salaries listed for small business owners, but they do note that those holding management positions make a mean annual salary of $106,760. Chief executives in the state make a mean annual salary of $172,430.