The Sunflower State is known for its beautiful, vast plains and as the geographic center of the contiguous US. But it also has a strong culture of entrepreneurship thanks to an ongoing state-level commitment to supporting small businesses.
Home to more than 250,000 small businesses—which make up 99.1% of all businesses in the state—Kansas is the perfect location for anybody looking to start and grow their own company. And it’s ranked top 10 in the US for affordability, cost of living, and housing prices, so your earnings will go further than most places in the country.
Companies like Garmin, AMC Theatres, H&R Block, and Cessna all got their start in Kansas. Ready to be the next homegrown success story? Read this guide to learn how to start a business in Kansas in 12 key steps.
How to start a business in Kansas
- Create a business plan
- Choose a business name
- Check zoning requirements
- Choose a business structure
- Register your business
- Open a business bank account
- Secure small business funding
- Arrange permits and licenses
- Insure your business
- Invest in business software
- Understand your tax obligations
- Build your team
1. Create a business plan
The first step in any successful venture is to write a business plan. This will ensure that you’ve clearly mapped out your business strategy, startup costs, goals, competition, and growth plan so that you can hit the ground running on opening day. It’s also a requirement for securing funding at many financial and government institutions.
A well-crafted business plan will help you:
- Calculate business costs and expenses
- Define your business goals
- Identify opportunities and risks
- Define your unique selling proposition (USP)
- Create a growth strategy
- Identify your target market and potential customers
- Create basic marketing strategies
- Identify additional revenue streams
- Secure funding and investments
We recommend using the business plan template from the Small Business Association (SBA) to help guide you through the process. The Kansas Business One Stop also contains some great resources and links to local business plan services in the state.
2. Choose a business name
In Kansas, sole proprietors are allowed to use their full, legal name(s) as their business name. They do not need to file any registration documents to run their business. Still, it’s recommended that you use the business name database to determine if your chosen business name is unique in the state.
Limited liability companies and corporations must register their business name using either an Articles of Organization or Articles of Incorporation form, respectively. This is done through the Kansas Secretary of State Office.
How to name a business in Kansas
- Perform a business name search. Check to see if your preferred business name is available using Kansas’ Business Entity Database.
- Register your business name. If the name is available, and you are starting a limited liability company or corporation, you can claim it when registering their business. This can be done through the KanAccess port with the help of a registered agent. The filing fee is $90 for Articles of Incorporation, and $165 for Articles of Organization.
The state of Kansas does not register or require “doing business as” names, assumed names, trade names, or fictitious names for businesses who opt to conduct business under a different identity to their registered business. Instead, the Secretary of State’s office recommends that you consult with an attorney to discuss protecting your business name.
3. Check zoning requirements
All businesses in Kansas should check with their local and municipal governments to ensure that they are in compliance with the appropriate zoning laws. Zoning laws in Kansas City, for example, will be different that those in Shawnee County.
Your business location in Kansas will likely be regulated by zoning laws, even if you run a mobile or home-based business. Depending on your type of service business, you may need to look for specific zones within your city or county that allow your type of business to operate.
4. Choose a business structure
An important step to starting your successful business in Kansas is choosing a business structure—sometimes referred to as a business entity, legal structure, or legal entity— that will allow you to operate effectively.
The most common business entity types in Kansas are:
- Sole proprietorship
- Partnership
- Corporation
- Limited liability company (LLC)
The formal business structure you select will impact the complexity of your startup process, personal liability protection, business size, and tax registration process. Many service businesses opt to function as limited liability companies due to the personal asset protections and tax flexibility that this legal entity provides.
If you’re not sure which business structure is right for you, work with a CPA to choose the best business structure for your operation. Kansas also has a Business Startup Wizard that helps you determine what is required if you structure your business as each legal entity.
5. Register your business
Business registration in Kansas is done through the Kansas Secretary of State Office, and online through the KanAccess portal. Before you get started, head over to the Kansas Business One Stop to ensure that you have everything you need to register.
Remember: Sole proprietors don’t need to register their business in Kansas.
Businesses forming as partnerships, corporations, or limited liability companies typically go through this process:
- Select a registered agent. This person or corporation will handle all legal notices and government correspondences on behalf of your business. They must have a physical address in Kansas.
- File forms and pay fees. Registration forms and fees will change depending on your business entity type. All forms and fees are completed and paid via the KanAccess portal.
- Set up a Federal Employer Identification Number (FEIN or EIN). You need an EIN to pay business taxes, open business bank accounts, and hire employees. You can apply for an EIN online.
- Register for state-level taxes. Depending on the type of business you’re creating, you may need to register for a variety of state-level taxes in Kansas. To find out, head to the Kansas Department of Revenue Customer Service Center. Register for an account and log in. Then, fill out the questionnaire. This will tell you what business taxes you need to register for in Kansas.
How much does it cost to register a business in Kansas?
It costs $165 to register a corporation in Kansas, and $90 to register a limited liability company.
6. Open a business bank account
A business bank account isn’t just a good idea, it’s also a requirement for most business types. This ensures that you can keep your personal and business finances separate, saving you time and confusion during bookkeeping, account, and tax activities.
You’ll need an EIN to open a bank account. Your chosen business structure will also dictate what other forms or pieces of identification may be required. Check with your local financial institution to confirm what will be required to open your business bank account.
A business checking account is perfect for day-to-day transactions. A savings account is also helpful to set aside profits and business income for tax time. You can also apply for a business credit card or credit account to help you build a credit score for your business.
7. Arrange permits and licenses
Depending on the type of business you operate, and the products and services you sell, you may also need to apply for licenses and permits at the federal, state, and local levels.
Here’s where to look at each level:
- Federal level. Check the SBA’s licenses and permits page.
- State level. Kansas does not have a general business license. Once an LLC, partnership, or corporation is registered through the Kansas Secretary of State Office, they are legally entitled to operate anywhere in the state. Some businesses may still need specific professional licenses and permits. Kansas Business One Stop Shop has a helpful list of all permits that may be required, and who to contact to get them.
- County and local levels. Check with the county-level government or your municipal government to learn about specific licenses and permits that may be required.
8. Secure small business funding
Outside funding is necessary for many new businesses first starting out, especially if you need to buy equipment, materials, real estate, or any other startup costs.
This is where your business plan will come in handy. With it, you can apply to loans and grants from various government and financial institutions. They’re going to want to see that you have a clear path to profitability.
The Kansas Business One Stop contains a list of business resources that entrepreneurs can use to help find and secure funding options and receive tax incentives.
You could also consider:
- Equity partners
- Friend or family loans
- Small business loan
- Financing for business owners
- Angel investment
Not all service business owners can benefit from small business financing. Check with your local lenders to find out what options are available to you.
9. Insure your business
Most service businesses require some types of business insurance, even if you don’t own physical materials, equipment, or real estate.
Businesses operating as a Kansas LLC will have some professional liability insurance and personal asset protection, but additional coverage is also a good idea just in case. It may also be a requirement, in some cases.
Kansas state law requires almost all employers to have worker’s compensation insurance. The exception is businesses in certain agricultural areas, or who have a gross annual payroll less than $20,000. In addition, all business-owned vehicles also must be covered by commercial auto insurance in Kansas.
If your business grows beyond 50 full-time employees, you may also be required to provide health insurance benefits.
For more details, read Insurance Information for the Small Business Owner and check out our guide: What type of small business insurance do I need?
10. Invest in business software
Small business owners are incredibly busy. Finding ways to save time early will help you focus on the business activities that drive the most impact for you and your customers.
Business software applications are a great investment that can help you automate and streamline time-consuming but important tasks.
Use business software to automate these back-office tasks:
- Invoicing: Use free invoicing software to automate invoicing, accept credit card payments, and get paid promptly.
- Scheduling: Automate appointment booking and reminders with tools like Calendly and TidyCal.
- Review management. Durable’s review management tool can help you get more customer reviews, faster.
- Customer relationship management. Track interactions and milestones with your clients and prospects. Deliver personalized messages and offers to them at the right time to increase loyalty and trust in your brand. Durable’s CRM automates many different customer interactions, helping you stay organized and top-of-mind.
11. Understand your tax obligations
It’s important to have a clear handle on all tax obligations associated with your business. Tax codes can be complicated, so we recommend seeking professional help from a CPA who specializes in your business niche.
In addition to the personal tax return you’ll have to file in Kansas, you should also pay attention to your business’s potential tax obligations at the local, state, and federal levels.
Here are some key business tax obligations in Kansas:
- Sales and use tax. Many businesses in Kansas will need to collect sales and use tax, and remit it to Kansas’ Department of Revenue.
- Withholding tax. Businesses with employees are also required to withhold some of their employees’ wages to help pre-pay state income tax for each individual.
- Business-specific taxes. Businesses in Kansas may also be subject to a variety of taxes based on the business products or services that they sell. The Department of Revenue has a helpful list of business taxes that may apply to you.
- Local taxes. Check with your county or municipality for any additional taxes you may need to pay on your personal property or real estate holdings.
12. Build a team
If you need some extra help with your service business, it’s a good idea to consider independent contractors when you’re first starting out. Hiring full time employees is a big commitment for small business owners that can add a lot of additional business expenses and complexity to your operation.
If you’re ready to take on some full- or part-time employees, you’ll need to make sure that you’re compliant with state and federal employment regulations.
Here are some key employer responsibilities in Kansas, and federally:
- Obtain an EIN. You need an EIN to hire employees.
- Understand your obligations. The Kansas Department of Labor offers a detailed breakdown of all labor and business laws governing employers in the state.
- Verify employee eligibility. You’ll need to verify that your potential hires are eligible to work in the United States by having them fill out this form.
- Report new hires. All employers are required to report new hires to their business in Kansas via the Department of Labor Business Login portal.
Grow your Kansas business with Durable
Kansas has a long, proud history of supporting small businesses and entrepreneurs. If you have a business idea and want to make the leap into entrepreneurship, then follow the instructions in this 12 step guide to start your business in Kansas.
One your business is set up, stick around and give Durable a try. Durable is an all-in-one platform with everything you need to start, run, and grow a service business. Build your business website in minutes, and make invoicing, customer management, and review management a breeze.
Try Durable today—it’s free!