Whether you are an entrepreneur at heart or you want to venture into something new, starting a business in Missouri can be a great idea. However, the process might seem a little scary, especially if you’ve never started a business before. There are quite a few steps involved in starting a business, so it can be overwhelming.
But by following this handy step-by-step guide, you will be well on your way to successfully starting your business from scratch in Missouri. This guide will cover everything from choosing your idea to marketing your business.
Step 1: Choose Your Idea
The first step in forming a new business in Missouri is to develop an idea. Think of this idea as the foundation of your business. Everything else, including the name, will stem from this idea.
These high stakes may make coming up with a good idea daunting, but these thought-provoking questions should point you in the right direction:
- What are my passions, skills, and hobbies?
- Can these passions be turned into a profitable business?
- What skills will I need for the business to work?
- Is there a need in the market for my business?
- Are there any businesses similar to mine in Missouri?
- If so, how do I plan on standing out from them?
- Do I see myself enjoying or wanting to run the business?
- What consumer problem does my business solve?
The answers to these questions should help you develop a good business idea. You can also ask your friends and family for help brainstorming different ideas.
Step 2: Pick a Name
The name of your business is crucial because this is the first thing many people will see and hear about your business. Their first impressions of your business and whether they want to support it will be based on this name. Therefore, you should be 100% sure about this name, as changing a business name after opening is not often recommended.
Your chosen name should be unique, and it should also be relevant to your business and the services you offer.
The state of Missouri will not allow you to register your business if you use a name that has already been registered with the Secretary of State. So, to check if your desired name is still available, you can conduct a business entity search on their website.
If you are struggling to come up with a name for your business, try out some of these helpful methods below:
- Use an online name generator. These are free and easy to use.
- Host a brainstorming session with friends and family.
- Create a survey on Facebook and ask friends to give their opinions.
Step 3: Write Your Business Plan
Once you have chosen your business idea and your name, the next step is writing your business plan. This plan will have everything about your business, including all the research, planning, and costs. Think of it like the blueprints of your business. While business plans are not a legal requirement in Missouri, they are vital in the planning and investment stage of starting a company.
A good business plan can also be used as an effective marketing tool to attract investors, so be sure to include everything an investor would want to know. This includes information like profit projections and startup costs.
Here are some burning questions you should attempt to answer in your business plan:
- Why have you started the business?
- What services are you offering?
- Who is your target audience?
- How do you plan on converting your target audience into paying customers? What are your marketing techniques?
- Who are your competitors?
- How do you plan on standing out from direct competitors?
- How much do you need to make to break even?
- What are your startup costs?
- What roles will there be in the business?
- Will you need to hire employees in the business? How many?
- What are your future financial goals and predictions for the next three years?
If you’re stuck on writing a business plan, you should be able to find some helpful templates online to get you started.
Step 4: Get Funding
Starting a business requires money for all the startup costs, and if you do not have this money upfront, you will need to get funds from elsewhere. You can do this through a grant, loan, or investor.
The Missouri Department of Economic Development runs a small business grant program; you can read more on the website to learn if your business meets its requirements.
Missouri also has a small-business loan program for businesses. Check out the official website for more details and requirements. Alternatively, go the private route and see if your bank will give you a loan to help start up your business. Even asking friends or family for a loan could be a great option, but if you do this, make sure you get everything in writing. The last thing you want to do is ruin a relationship over monetary issues that may potentially arise!
The third option for funding is to use an investor to help fund the startup costs. Investors can come in the form of acquaintances, friends, or family. Just be sure you have all agreements in writing.
Step 5: Choose a Business Structure
Once you have written your business plan and have the money to start the business, you must choose the business structure you will use. Each structure comes with different benefits.
A sole proprietorship is an informal business structure with no separation between the owner’s and the business’s assets. A sole proprietorship consists of only one owner.
This structure is very similar to a sole proprietorship, as a partnership is also an informal business structure with no separation between business and personal assets. The only difference between this structure and the sole proprietorship is that a partnership consists of more than one owner with equal shares in the business.
Limited Liability Company
A limited liability company, also known as an LLC, is a popular choice of business structure for small businesses. This is because this business structure is a hybrid between a sole proprietorship and a corporation. An LLC offers the simplicity and flexibility of a sole proprietorship with the added liability protection that a corporation provides.
C or S Corporation
A corporation is a formal business structure chosen by companies with multiple shareholders. Corporations are given many tax benefits, so it’s a great choice for large companies.
Step 6: Register Your Business
You may need to register your business with the state of Missouri before you can legally operate. The registration process differs depending on the chosen business structure.
This business structure does not need to be registered with the state. Simply set up and start trading. If you wish to operate under a name other than your legal one, you must file for an assumed name with the Secretary of State. This can be done online by filing the Creation, Renewal, Correction and Amendment of Fictitious Name form.
Because this is also an informal business structure, you do not need to register a partnership with the state. But as with a sole proprietorship, you must file for an assumed name, if applicable.
Limited Liability Company
Registering an LLC in Missouri is not as complicated as you may think. To do so, you must complete and submit the Articles of Organization with the state. You can do this online. This fee is $50, or $105 if you file by paper.
To register a corporation, complete the Articles of Incorporation. You must submit the completed form to the Secretary of State with the $58 fee.
Step 7: Set Up Your Finances & Accounting
Setting up your business’s finances and accounting before you begin trading is strongly recommended. To set up your finances, you can start by opening a business bank account, applying for a company credit card, and choosing a payment method for customers to use. For example, your bank can provide you with a credit card machine and set it up for you. If you have employees, you will also need payroll software to manage their salaries and taxes efficiently.
Hiring an accountant to assist you with your business’s books is a good idea to ensure everything is done correctly. An accountant can also help ensure you do not overpay on taxes.
Step 8: Get Business Insurance
Missouri does not require businesses registered in the state to obtain insurance, but it is strongly recommended. Every business needs at least a general liability insurance policy that covers all things you need to run your business on a daily basis, including injury and damage on the premises.
Other types of insurance that you can get for your business are:
- Limited liability company insurance
- Business owners insurance
- Professional liability insurance
- Workers compensation insurance
- Commercial auto insurance
- Commercial property insurance
There are many different options out there, so it can be overwhelming. If you aren’t sure what insurance best suits your needs, consult a broker.
Step 9: Obtain Any Permits or Licenses Needed
Missouri does not offer state-wide general business licenses, but it requires businesses to have a Sales Tax license. You can apply for this license through the Missouri Department of Revenue. You can find more information about what you need on their website.
In addition, you may need other permits and licenses depending on your business. Check with your local county clerk to see what you need to run your business legally.
Step 10: Build a Website
A website for your business is a must-have in today’s technology-driven world, and building one yourself has never been easier. There are so many different web-building options available online for free or subscription-based. Alternatively, you could just pay to have someone design one for you.
Here are some things to keep in mind when designing your website:
- Check if your desired domain name is still available; there are many ways to do this for free on the internet.
- Make sure your business name is easily visible for viewers to read.
- Keep all fonts neat and easy to read.
- Avoid overloading the page with images, GIFs, and videos, as this can cause the loading times to slow.
- Ensure your website is mobile-compatible.
- Include a call to action button like “Shop Now” or “Contact Us.”
- Link your other social media accounts to the website.
Step 11: Hire Employees (If Any)
Once you get busy enough, you may need to hire employees to help you. When you do, you are legally required to report any new hires to the Missouri Department of Social Services. This needs to be done within 20 days of the new hire date, and there is no fee to report new hires.
Step 12: Market Your Business
Marketing your business is the final step in starting a business. There are so many ways to market a business, so you can pick a few different ways that best suit your needs and your intended audience. The key to good marketing is to be consistent.
Here are some ways to market your business:
- Advertise and engage with customers on your website.
- Use social media like Facebook and even TikTok.
- Attend markets and local events in Missouri.
- Attend networking events.
- Hold giveaways or spot prizes.
- Create a Google business profile to advertise there.
- Hand out promotional flyers.
- Advertise on your local radio station.
You can do this all yourself or hire someone to handle the marketing for you.