BusinessHABPlanning to start a business? The state of Missouri, with its bustling local economy, feasible business environment, and growing population, offers the ideal stage for you to do so. At present, there are already more than half a million registered small businesses in the state that make up 99.4% of all private companies in the area. Still, between January 2021 and 2022, new applications in excess of 91,000 were submitted by new ventures looking to set up shop in the state. This number put Missouri at the 21st spot among all states of the US in terms of new requests received.
Missouri’s 4% lowest corporate tax rate is one of the prominent features that entice businesses to establish themselves here. However, starting a new enterprise is no walk in the park, and it goes without saying that as a fresh business owner, you need to be at the top of your game. It must be evident that the opportunities in Missouri come with a set of unique challenges, like extensive competitiveness in the local market. Overcoming these hurdles will require creative efforts across the board, allowing you to stand out from the rest.
Here are a few pertinent tips to guide you along the way and facilitate you in setting up a new business in Missouri:
Have a solid foundation before starting
There are certain factors that are important to consider before you even think about setting up a business. Chief amongst these is whether you have the knowledge, skills, and experience to make your venture a success. An MBA program offers a lot in terms of the first two parameters. You can easily find an online MBA program in Missouri to get the ball rolling and establish a strong footing for your business acumen.
Most entrepreneurs are born with a creative instinct that makes them well-suited to run a business. Still, the competitiveness of Missouri’s local market means that you don’t just need a new idea, but something that is innovative and needed by a significant segment of customers. In addition to this distinct idea, you also require a strong and sustainable plan drawn up to back it. This plan is your blueprint to build a successful business in any market.
Decide the type of entity you want to establish
There are different types of business entities you can register. These include the following:
- A sole proprietorship where you are the only owner
- A partnership
- A limited partnership (LP)
- A limited liability partnership (LLP)
- A limited liability limited partnership (LLLP)
- A limited liability company (LLC)
- A corporation
Each type of entity has its own set of rules, regulations, laws, and compliance statutes that it needs to abide by. In a sole proprietorship, you have no liability coverage, which means that the business being sued means you are personally being dragged to court. Similarly, if it goes under, your personal assets are also at stake.
LCs, LPs, LLPs, and LLLPs all have different levels of liability for you and the other partners, but they do offer a certain degree of protection that you don’t get in a sole proprietorship. In Missouri, an LLC offers an additional benefit in that there are no requirements for the business to present annual reports or pay a fee.
In a corporation, you mostly have shareholders, but more importantly, the company assets and liabilities are completely separate from personal assets. Sit down with a legal representative in Missouri to get all the details for what type of company you can and should set up.
Register the company type of your choosing
Once you decide on the type of company you want to register, it is time to file the papers. In Missouri and a host of other states, these papers are submitted to the Secretary of State. For a simple partnership or sole proprietorship, you only need to file a DBA on the Missouri Online Business Filing portal, but only if you are not using your legal name. Whatever the name may be, you need to renew it after five years and there is a $7 fee for the filing.
Similarly, LP, LLP, and LLLP papers are also filed through the online portal. The paperwork for each type is different, and the fees depend on the number of partners. As an LLC, you need to file the articles of organization.
It is best to enlist professional legal help for this process as the slightest error in registering paperwork can result in the rejection of your application.
Get your finances in order
After registering the company, the first thing to do is to sort out its financial issues. This includes obtaining the EIN (employer identification number) through the IRS website and then opening a business checking account with the bank of your choice. The EIN will also serve as the basis for creating your unemployment insurance account and even when filing your taxes with the state.
Moreover, you will also have to sort out investments for the business. There are numerous ways in which a business can get funding. Family support, loans, venture capitalists, and a host of other investors are just some options you can explore. Most avenues require pitching the business idea to high net-worth individuals and organizations, convincing them to take a bet on your idea.
Sort out licenses, permits, and insurance
Once you acquire funding, you are all set to put your idea into the execution phase. This is where you will need to think about licenses, permits, and insurance first. In the state of Missouri, every business doesn’t need a license, but those selling taxable services or tangible goods need one. The particular permits and licensing requirements can also differ between counties as well as municipalities.
Furthermore, insurance is a crucial factor to consider because accidents can happen at any time. You don’t want to risk a budding enterprise the fact that a mishap brings it down before it can even start.
Conclusion
While the state of Missouri has a lot of exciting prospects for energetic, new businesses, certain aspects require careful efforts and deliberations. From deciding the type of company you want to establish, registering it, and acquiring funding for it along with the necessary licenses for operations to initiating work on the actual business plan, you will go through many sleepless nights and tense moments. The secret is to not lose hope because the rewards are worth it at the end of the day.
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