Kansas offers a thriving entrepreneurial community with good availability of business funding for new businesses. Kansas has a 2.3% growth rate for small business as compared to the national growth rate of 1.2%, and this provides added optimism for those who want to start a new business there.
How to Start a Business in Kansas:
1. Determine your business structure.
When starting a business, one of the most important decisions that you make will be choosing the legal structure of your company. Your choice will impact on taxes, paperwork, personal liability, and your ability to raise funds.
You can choose from the following legal structures:
A sole proprietorship is the simplest structure and usually involves one individual who is solely responsible for the enterprise while a partnership is suitable for businesses with two or more owners. A corporation is a standalone entity with shareholders while a Limited Liability Company (LLC) is the most popular type because of minimal paperwork, flexibility, tax benefits, and simple implementation process. LLC business owners are not obligated to file a corporate tax return.
LLCs are regulated by Kansas state laws and must be registered by filing the Articles of Organization with the Kansas Secretary of State. LLC costs start from $160.00.
2. Write a business plan.
Your business plan is the foundation of your new business and will serve as an invaluable guide for how to structure, run and grow your company. The business plan can fall into one of two common categories: traditional or lean startup.
The traditional plan is very detailed, takes more time to write, and is quite comprehensive while the lean startup plan is high-level and fast to write.
A strong business plan can help you to get funding and make the process of opening a new business easier.
You can consult with the NetWork Kansas Referral Center, which is a free service that offers guidance and advice for new business owners in Kansas.
3. Sign up for business banking.
A small business bank account is a necessity when you are starting a business. Your business finances must be kept totally separate from your personal ones in order to maintain accurate records. With a business bank account, you can easily obtain statements and access products that would not be available to you as an individual.
4. Seek startup capital and/or loans.
If you are unable to fund your new business on your own, you will need to take out a loan. You can get funding for your business in three common ways: commercial loans, business lines of credit, and small business loans.
5. Decide on a business name.
The business name should reflect your business brand and capture your spirit. Make a list of the names that you like and perform a Google search to find any conflicts with other Kansas business names.
Once this is done, you will need to do a trademark search to ensure that the business name that you chose has not already been trademarked. You can perform the trademark search at the U.S. Patent and Trademark Office and the Trademark Electronic Search System. These databases have a comprehensive list of business names that are registered together with their classification.
After you have confirmed that your business name is not trademarked, you need to check the Kansas Business Center, which is sponsored by the Kansas Secretary of State, to ensure that your business name is not the same or similar to another corporation registered in Kansas.
If you are satisfied that your business name is available, you can then register it on the U.S. Patent and Trademark Office website. You can check out our guide on How to Name a Business to assist you with naming your business.
Once you have found a suitable name, make sure to register the matching web domain and social media handles, should you wish to market your business online.
6. Request an Employer Identification Number (EIN).
Every business needs an Employer Identification Number (EIN). Registering for an EIN is very easy—all you need to do is go to the IRS website. You can complete the application online, and save your EIN confirmation notice once you receive a number from the IRS.
7. Acquire business licenses and permits.
The state of Kansas does not require a general business license. You may need specific business licenses and permits depending on the type of business that you want to start in Kansas. You can refer to the Kansas Business Center portal to view the most common types of businesses together with information on the licenses and permits required for those types of businesses.
In addition, if your new business in Kansas is selling physical products, you will be required to register for Kansas Sales Tax through the Kansas Department of Revenue.
8. Hire employees.
If your business plan included the addition of new employees to your business, it is time to start the hiring process. Compliance with labor laws in Kansas will ensure that your employees are treated appropriately at your business and their rights as employees are protected.
With reference to the pre-employment screening process in Kansas, an employer is entitled to view a job applicant’s criminal history and obtain the relevant records from the criminal justice system.
The current minimum wage in Kansas is $7.25. You can refer to the Kansas Department of Labor for more information on employment laws in Kansas.
9. Check your business employer requirements.
Business employer requirements are specific to the type of business that you are starting and include various labor, safety, and tax obligations that need to be met. You should consider engaging in the services of a tax or business attorney to ensure your business is fully compliant with Kansas laws.
If you are starting a business in Kansas, you will need to take note of the following important items:
Kansas’s law requires all employers to provide workers’ compensation coverage to their employees, unless their business payroll amount is less than $20,000.00 or if their business is involved in specific agricultural sectors. You can obtain more information at the Kansas Department of Labor website.
Health insurance isn’t a requirement for small businesses in Kansas with fewer than 50 full-time employees. If you have between 2 and 50 employees, you have the option of purchasing small group health plans for your employees as a means to attract and retain quality staff. You can refer to the Kansas Insurance Department for more information in this regard.
The Kansas Business Center
The Kansas Business Center is a free service offered to anyone seeking to start a small business in Kansas and is sponsored by the Kansas Secretary of State. The Kansas Business Center provides guidance and advice as you prepare to register your new business.
In Kansas, your small business is required to establish a Kansas unemployment insurance tax account with the Kansas Department of Labor (KDOL). You must register with the KDOL within 15 days of employing any staff. The KDOL will then issue you a six-digit employer serial number if your business is liable to contribute to the unemployment tax. If your business is required to contribute towards unemployment insurance, you will be required to file quarterly reports.
Every individual or entity engaging in business as a seller of tangible personal property in the state of Kansas is required to pay a sales tax. Services rendered are not taxable. You will need to register for a sales tax permit with the Kansas Department of Revenue. You can get more information here.
Kansas Formation and Registration Fees:
LLC (online application)
LLC (paper application)
Corporation for profit
Corporation not for profit
Limited liability partnership
You can register at the Kansas Secretary of State Business Filing Center for comprehensive information on costs and requirements.
How much does it cost to start a business in Kansas?
Kansas formation and registration fees differ depending on the type of business you're registering but they range between $115.00 and $160.00.
Do I need a business license in Kansas?
Kansas does not require a general business license. You may need other specific kinds of business licenses and permits. However, if your business in Kansas is selling physical products, you will need to register for Kansas Sales Tax through the Kansas Department of Revenue.
How do I form an LLC in Kansas?
- Select your Kansas LLC filing option.
- Submit the Kansas LLC Articles of Organization.
- Form a Kansas LLC Operating Agreement.
- Obtain a Federal EIN from the IRS.
- Open a Kansas LLC bank account.
- Secure any required business licenses.
- File the Kansas LLC Annual Report.
- Pay taxes on the LLC income.
Do LLCs pay taxes in Kansas?
LLCs are not required to pay income taxes in Kansas. Income from the business is distributed to the members of the LLC, and each individual member will be required to pay federal and state taxes on their share of the company’s income.
How long does it take to get an LLC in Kansas?
It can take between four to six weeks to process an LLC in Kansas.
How do I register my business name in Kansas?
You can register your business with the Kansas Secretary of State and have the option of an online or physical application.
How do I get a tax ID number in Kansas?
You will need to obtain an Employer Identification Number (EIN). To register for an EIN, go to the IRS website. You can complete the application online, and save your EIN confirmation notice once you receive a number from the IRS.
Does Kansas require DBA registration?
No, Kansas does not have statutes requiring the registration or filing of DBAs.
What are the best banks for small business in Kansas?
How do I start a business in Kansas with no money?
- Use services to generate cash flow and fund a product-based business.
- Get creative to discover funding sources.
- Grind it out and look for business, even if you don't get paid for it.
- Use your current resources in different ways to generate income.
- Get a credit line to help with the early stages of your business.
- Locate an accelerator if you can hit the market swiftly.
- Crowdfund and allow the public to invest a small percentage of money in return for future buy-in.
- Use a business incubator to provide funding designed specifically to financially assist a startup company.
How can I protect the name and logo of my business in Kansas?
The easiest way is to register your business name on the U.S. Patent and Trademark Office website. Prior to registration, remember to check on the Trademark Electronic Search System and the Kansas Business Center databases to ensure that your business name is not already registered by another company.
Do I need workers' compensation for my new business in Kansas?
All employers in Kansas are compelled to provide workers’ compensation coverage to their employees except for those businesses that have a payroll amount of less than $20,000 or those businesses involved in specific agricultural sectors.
Does my business in Kansas need to contribute to health insurance?
Health insurance isn’t mandatory for small businesses in Kansas with fewer than 50 full-time employees.