Whether you simply want to escape from your mundane 9 to 5 job or you have an idea you want to expand on, starting a business could be a great step for you. But if you have never started a business before, you might be lost and may not know where to begin. Starting a business in Kentucky may sound like a complicated process, but it is pretty straightforward.

In this article, you will find everything you need to know about starting a business in Kentucky, from choosing a name to marketing your new business successfully.

Step 1: Choose Your Idea

The first step in starting a business is deciding what idea to build your business on. This idea doesn’t need to be overly thought-out at this stage. This is still the creative stage of starting a business.

Choosing a business may seem pretty daunting at first, but your creative juices should start flowing once you ask yourself these idea-stimulating questions.:

  • What are my favorite hobbies and passions?
  • Can any of these hobbies and passions be turned into a profitable business?
  • Is there a need for my business?
  • Will I enjoy running the business?
  • What consumer problem does my solve?
  • Are there any businesses similar to mine already out there?

These questions should give you an idea of whether you are on the right track. If not, you can start the process again until you are happy with your business idea. As a top tip, don’t just think about the business idea on your own. Employ the help of your friends, family, and the general public, and ask them what they think.

Step 2: Pick a Name

Picking your business name is one of the most important decisions you will need to make in the initial stages of starting a business. The name you choose will be the first thing that potential customers will encounter. Their first impressions of your business will be based on the name.

Therefore, it is crucial to choose one wisely. Here are some things to consider when picking a name:

  • The State of Kentucky will not allow you to register your business if your chosen name is already in use. To check if your desired name is still available, you can visit the Kentucky Secretary of State’s website to search through the registered business names.
  • The name you choose should be easy for people to pronounce and spell.
  • The name should be unique.
  • The name should be relevant to the industry your business is in.
  • Your name should give people an idea of what services you are offering.

If you’re battling to come up with a name for your business, try these helpful methods:

  • Use a free online name generator.
  • Hold a brainstorming session with friends and family.
  • Create a poll on your social media like Facebook or Instagram.

Step 3: Write Your Business Plan 

Now comes the hard work. Your business plan should have everything a person needs to know about your business, from the planning and research stages to the actual day-to-day running of the business.

Your business plan can also be used as a marketing tool to attract potential investors to your business, so make sure it is well-written.

While there are no set rules in Kentucky stating what needs to be included in the business plan, you should at least answer some of the following questions:

  • What services will your business offer?
  • Who is your target audience?
  • How do you plan on turning your target audience into paying customers? What are your marketing techniques?
  • What are the start-up costs involved?
  • Do you have the money, or will you need funding?
  • How much do you need to earn to break even?
  • Are there any other financial details that are important to the business?
  • What roles will be available in the business, and how do you plan on filling them?

There are plenty of online business plan templates you can download for free if you’re still unsure how to start writing one.

Step 4: Get Funding

Starting a business is easy, but you need money to get everything up and running. If you don’t have the money to fund the business yourself, you will need to get funding another way. You can get funding for the Kentucky business through grants, loans, and investors.


Getting a grant for the business is one of the most desirable ways of getting funds, as the money does not need to be paid back. Grants often come with a long list of entry requirements, so if you don’t meet these, you can always apply for a loan. The Kentucky Cabinet for Economic Development website has several business incentivizing programs that you can scroll through to see if you are eligible.


If you can’t get a grant, another option is to get a loan. The Kentucky Cabinet for Economic Development has a loan available called the KEDFA Small Business Loan. Depending on your needs, you can borrow as little as $15,000 to as much as $100,000.

You can also get loans privately from your local bank. Alternatively, you can ask your friends and family to see if anyone would be willing to lend you some money to start the business. Make sure to get this in writing to avoid any potential fallouts due to financial issues.


If you are happy to part with some business shares, you could always have an investor fund the business or help with start-up costs.

Step 5: Choose A Business Structure 

Each business structure is suited for a specific business model, so you want to be sure that you choose the right structure for your business.

Sole Proprietorship 

A sole proprietorship is an informal business structure where there is no separation between the business assets and the owner. This structure is typically used for low-risk businesses with only one owner. 


A partnership is very similar to a sole proprietorship as it is not a formal business structure, and again, there is no separation between business and personal assets. The only difference is that this business structure is used for businesses with two or more owners with equal shares in the business.

Limited Liability Company 

A limited liability company, or LLC, is one of the most commonly used business structures for small businesses. This is because LLCs have the ease and flexibility of a sole proprietorship or partnership with the liability protection of a corporation. You get the best of both worlds with an LLC business structure.

C or S Corporation 

A corporation is the most formal type of business structure and is mainly used by large companies with multiple shareholders. Companies like Coca-Cola and Microsoft are examples of corporations. The corporation is a separate entity from the business owners.

Step 6: Register The Business

Once you have chosen what business structure to use, you will need to register the business to operate legally.

Sole Proprietorship

Kentucky does not require sole proprietorships to register their business with the state. However, if you wish to operate your business under a different name other than your legal name, you will need to file an assumed name with the Kentucky Secretary of State.


This business structure does not need to be registered with the state either. If you wish to file an assumed name, you can do this with the Kentucky Secretary of State. It is highly recommended that all business owners complete and sign a partnership agreement, but this does not need to be filed with the state.

Limited Liability Company 

Register your LLC with the state of Kentucky by completing and submitting the Articles of Organization to the Kentucky One Stop Business Portal. The fee to register your LLC is just $40.

C or S Corporation 

To register your corporation with the state, you must complete and submit the Articles of Incorporation on the Kentucky One Stop Business Portal. The fee for filing the paperwork is $50.

Step 7: Set Up Your Finances & Accounting 

Setting up your finances and accounting before trading is a good idea and one that is simple enough to do and will make your life much easier in the long run.

To set up your finances, you will need to apply for a bank account for the business, a credit card, and a payment method for your customers to use. Many banks can set up your credit card machine for you.

You may want to install payroll software and hire an accountant to look after the business books if you have employees. You will be thankful for the extra help, especially when tax season rolls around.

Step 8: Get Business Insurance 

Obtaining insurance for your business may not be a requirement in Kentucky, but it would be risky not to. While there are many different insurance policies you can choose from, you should at least have a good general liability insurance policy. This broad insurance policy covers all the basics of running a business. This policy also covers any incidents of damage or injury on your business premises.

Other popular insurance policies that you can choose from:

  • Professional liability insurance
  • Commercial property insurance
  • Business owners insurance
  • Workers compensation insurance
  • Commercial auto insurance
  • Limited liability company insurance

If you’re feeling overwhelmed and unsure what kind of insurance best suits your needs, consult a broker or a business attorney.

Step 9: Obtain Any Permits or Licenses Needed

The State of Kentucky does not issue general business licenses, but some counties and cities may have their own rules. You can visit the One Stop Business Portal to see what license your business may need.

If your business sells taxable goods and services, you must register for a Kentucky Sales Tax Permit. You can do this on the One Stop Business Portal.

Step 10: Build a Website

Having a website for your business is crucial in today’s modern world, and building one yourself has never been easier. You can choose from plenty of web-building services and do-it-yourself platforms.

Here are a few things to remember when building a website:

  • Check that your desired domain name is still available.
  • Ensure that your business name is clear and easy to find.
  • Ensure all font is neat and easy to read.
  • Avoid cluttering the website with too many images, graphics, videos, and GIFs.
  • Make sure that your webpage is compatible with mobile browsers.
  • Include a good call to action or a contact us button.

Step 11: Hire Employees (If Any)

If you find that you cannot run the business on your own, you may need to hire employees. You will need to report each new hire within 20 days of the hire date to the Kentucky Cabinet For Health and Family Services. There is no fee to do this.

Step 12: Market Your Business

Thanks to the internet, there are so many different ways to market your business in this day and age. However, the key to effective marketing is consistency.

Try out these easy marketing methods, suitable for any budget:

  • Advertise and engage with people on your business website.
  • Create interest and events and advertise for free on social media like Facebook and Instagram.
  • Create a Google Business Profile and advertise on Google.
  • Attend local events and business conventions.
  • Hold competitions and specials.
  • Advertise on your local radio or television stations.
  • Create flyers.
  • Give out freebies or samples.

There are endless ways to market a business. Consider hiring a marketing expert if you need help building a name for your business.

Scroll to Top