How to Start a Small Business in KY
According to Kentucky's Cabinet for Economic Growth, about 90 percent of businesses that operate within the state have less than 50 employees.4 min read
Are you wondering how to start a small business in KY? According to Kentucky's Cabinet for Economic Growth, about 90 percent of businesses that operate within the state have less than 50 employees. The Small and Minority Business Branch of Kentucky supports entrepreneurs and companies as they begin building their businesses. For example, in 2010 Kentucky lowered the business income tax rate to 6 percent and eliminated the corporate license tax. These two actions were taken in order to boost relocating and startup businesses.
Starting a Business in Kentucky: Business Formation
There are 14 essential steps to forming a business in Kentucky:
- File a business formation document with the Kentucky Secretary of State (SOS).
- Obtain and register your assumed business name or doing business as name.
- File the business formation document with the SOS.
- Request a Federal Employer Identification Number (FEIN).
- Create a business governing document that will outline the rules for managing the business.
- In order to begin tax collection and assessment, you'll need to register with the Kentucky Department of Revenue.
- Request a business license with the county that you'll be doing business in.
- Register with the local zoning and building inspector.
- Obtain all permits or licenses for the business.
- Open a business checking account.
- Obtain property and business insurance.
- Register any relevant trademarks.
- Advertise to grow the business.
- Create a website dedicated solely to the business.
Starting a Business in Kentucky: Business Planning
Starting a business in Kentucky should begin with creating a solid business plan. A business plan is considered by many to be a tool for entrepreneurs to guide their business operations as opposed to a strict blueprint or manual that needs to be adhered to and carried out exactly. The business plan should address the following:
- Overall strategy and mission
- Marketing approach
The purpose of creating goals is to make sure you can measure the growth or progress of your actions. Also, the creation of a business plan helps entrepreneurs determine whether their decision to create a business is established on the correct reasoning.
It's never a good idea to start a business if you're doing it because you feel like you've run out of options or you've recently lost a job. Many entrepreneurs gain financial success from starting a business. However, there are usually a great number of overlooked risks too. Remembering to stay focused and understanding the risks associated with your venture will help you to stay motivated in difficult situations and improve your chances of success.
The first step in starting a business is to begin researching and reviewing the procedures to take in order to get a company up and running. There's a large array of publications and information online that specifically address the exact steps to take.
This post was created with the sole purpose of identifying the steps to start a business, and putting them into an easy-to-understand sequential process. It will focus on the requirements and decisions that the majority of Kentucky entrepreneurs will face during the startup process. The links below provide legal and practical topics that many small business owners face during implementation.
- Kentucky Cabinet for Economic Development
- U.S. Small Business Administration (USBA)
- USBA Business Guide
The second step to starting a business is to develop the business plan. The business plan will serve as a blueprint for the goals of the organization. It will also provide the essential steps for achieving and measuring success. A solid business plan should allow the owner to objectively analyze the weaknesses and strengths of the company prior to opening.
The third step to starting a business is to gain a solid understanding of basic financial administration and management. Entrepreneurs should objectively scrutinize their business plan to identify whether it may be profitable. In order to do this, you'll need to create a projection of revenues and expenses.
The fourth step to starting a business consists of creating a business name. It's important to create a business name that is original and unique. Remember, the name you're thinking about using may have already been previously trademarked by someone else. In cases where your desired name is already trademarked, you may be prevented or prohibited from using that name entirely. Before spending a lot of time, effort, and money on creating a brand or business name, make sure to complete a comprehensive trademark search.
The fifth step in starting a business is to select a business entity type. This will entail deciding on whether the business will be a:
- Sole proprietorship
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