You’re about to embark on a long and exciting journey, one full of hard work and rewards: starting a new business. With wide eyes and big dreams, you’re about to enter the world of business ownership.
But beyond the initial thrill of the startup decision, there’s a lot to consider. In fact, if you’ve never done it before, starting a business can seem like an intimidating mountain of work. Out of all your responsibilities and tasks, you might not even know where to start.
But have no fear. The good news is that once you have everything planned out and understand the process, the formation process is smooth sailing. And this is your go-to guide.
Everything you’ve been wondering about, everything you need to do, every question you have – it’s all right here. By the time you’re through these 16 steps, you’ll be a bonafide business owner who’s prepared for sustained success.
1) Write a Business Plan
Jumping into this endeavor without goals, directives, or a sense of direction can lead to a scattered, unproductive business.
A business plan lays the groundwork for your future success. It helps you analyze key elements of your business and forge pathways to achieve your goals. Here are a few things you should consider including in your business plan:
- Executive Summary (a separate document that gives a complete overview of your business’ purpose, plans, goals, competition, opportunities, etc.)
- Company description
- Market Analysis (opportunities, competition, etc.)
- Managerial or organizational structure
- Products and/or services
- Marketing strategies
- Funding goals
- Financial projections
Business plans aren’t just great for internal operations, but they give your business legitimacy in front of potential investors, customers, partners, and more. Need help? Check out this guide from the U.S. Small Business Administration.
2) Decide on a Business Name
You might’ve come up with the perfect name right away. If so, consider yourself lucky.
Sometimes, deciding on a business can be difficult, requiring brainstorming meetings and late-night rap sessions. That’s because your name is your business’ identity and reputation. It should be something that’s unique and memorable but also defines your business purpose.
Once you choose a business structure (see section 3), you’ll need to follow that structure’s specific naming requirements. For example, limited liability company names must use the terms “limited liability company,” or an abbreviation like “LLC.” Likewise, corporation names should include “corporation,” “incorporated,” “company,” “limited,” or an abbreviation thereof.
Meeting those requirements won’t matter, however, if your name is unavailable. Search for your desired name to see if another company has already claimed it. If not, you’re free to reserve it or use it on your formation documents.
3) Decide on a Legal Structure
There are only a few types of business structures, but each one dictates some important parts of how your business will run.
The most popular types are the sole proprietorship, general partnership, limited liability company (LLC), S corporation, and C corporation. Most small businesses go with the LLC because of its unique blend of flexibility and personal asset protection.
However, you shouldn’t make this decision without reading up on all of your options. We’ve done plenty of research on each business type and developed side-by-side comparisons. Check out our LLC vs. Corporation and LLC vs. Sole Proprietorship comparison guides for a closer look.
4) Choose a Registered Agent
The Secretary of State needs a point of contact for your business, someone who will be available at your registered office address during typical business hours – 9am to 5pm.
This person is called a registered agent, and they serve as an intermediary with the state, receiving all of your company’s important legal communications and relaying them on to you. The Missouri registered agent ensures that no important state documents, deadlines, or payments fall through the cracks, so you’ll want to choose a person or company you trust.
You can choose either an individual or a business entity as your registered agent in Missouri, but they must:
- Be an individual Missouri resident or a corporation authorized to do business in the state.
- Have a physical address in Missouri.
- Have a mailing address in Missouri (no P.O. boxes allowed).
A registered agent helps keep your business compliant, which is an important responsibility. So, it can be wise to choose someone familiar with business maintenance, like an attorney, manager, or other professional. However, the state’s requirements are broad, so family members and friends are also viable options.
Or, you can choose a registered agent service instead. These companies take care of all your registered agent responsibilities, and some will even handle your business formation and annual reporting as well.
Important: You must continuously maintain a registered agent on file with the Secretary of State. If your agent resigns or you appoint a new one, you’ll need to notify them by filing the appropriate documents.
5) Register Your Business
This is the big one, the step that officially creates your business. No matter which business type you choose, you’ll need to register it with the Secretary of State.
LLCs: For new Missouri LLCs, this means filing the Articles of Organization with the Secretary of State. You can submit it either online or using a hard copy, although online filing is the cheaper and faster option. Electronic submissions will be processed immediately and only cost $55, while paper forms take 3-5 business days and cost $105.
Corporations: Filing processes for corporations aren’t much different, although you’ll need to file the corporation-specific Articles of Incorporation instead.
Sole Proprietorship/General Partnership: There are no official forms or fees to register as a sole proprietor or general partnership. Simply start doing business and that’s it! While this is obviously faster and easier, we recommend incorporating your business because of the personal asset protection LLCs and corporations provide.
Foreign Entities: Any business that was formed outside of Missouri but begins doing business in-state is deemed “foreign” instead of “domestic.” These businesses must foreign qualify by filing an “Application for Registration of a Foreign LLC” for $105 or an “Application for Certificate of Authority for Foreign Corporation” for $155. You can file either online or by downloading the appropriate document from the Secretary of State Fees and Forms page.
6) Get an EIN
The Employer Identification Number (EIN) is your ticket to doing state and federal taxes. It’s a nine-digit number, much like a Social Security Number, that identifies your business on tax documents.
If you’re forming an LLC, it will be considered a “pass-through” entity, so the business itself won’t pay federal income taxes. Instead, you and the other members will report income and losses on your personal tax returns.
But this doesn’t mean you can go without an EIN. If your LLC pays any type of business taxes – like Sales, Use, or Unemployment Taxes – or hires employees, you’ll need to get one.
Unsure if you need one? The IRS provides a useful “Do I need an EIN?” link on this page, where you can also apply for an EIN. If you go through the online application process, you’ll receive your number immediately.
Otherwise, you can submit a Form SS-4 by fax to (855) 641-6935 or by mail to :
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
7) Open a Business Bank Account
LLC and corporation owners are required to keep their personal and business finances completely separate, or they risk losing their personal asset protection. To do so, you’ll need a business bank account.
The good news is that opening a business bank account is pretty simple. Just pay a visit to your bank’s local branch and sit down with one of the bankers there. You will need to present your formation documents, an EIN number, and some personal information. Then, you can direct all of your business income and expenses to that account instead of a personal one.
It doesn’t really matter which bank you choose, whether it’s a national giant like Chase or Bank of America or a small, local bank. However, it’s usually easiest to go with the one where you have existing accounts.
8) Handle Any Tax Obligations
Ah, taxes. They’re always part of the picture, especially when you run a business.
Familiarizing yourself with your business’ tax requirements will help you establish a solid financial plan going forward. LLCs don’t need to file a corporate tax return and pay federal income taxes, so you’ll handle these taxes as part of your personal return.
Corporations, on the other hand, will need to file a Corporate Income Tax Return, while sole proprietorships/general partnerships will need to pay self-employment taxes.
Some states require their businesses to pay a “franchise” or “privilege” tax each year, but Missouri doesn’t, so you won’t need to worry about it. However, there are a few other taxes your business may owe, depending on your circumstances:
Sales and Use Taxes: Does your business sell goods? If so, it will be responsible for paying the states’ 4.225% Sales and Use Taxes. This rate can vary between cities and counties, but you can keep track of different rates here.
Withholding and Unemployment Taxes: All employers in Missouri must pay certain taxes, namely a Withholding Tax through the Department of Revenue and an Unemployment Tax through the Department of Labor and Industrial Relations. So, if your business hires any employees, don’t forget to register for these taxes.
Other Taxes: There are other highly-specific business taxes that apply to certain goods and activities, like Cigarette Tax and the Motor Fuel Tax. Check the Department of Revenue’s Business Tax page for a full list.
9) Find an Accountant
Sometimes it’s easier to hand off your financial responsibilities to a professional. Not only will an accountant ensures that your taxes are filed and paid correctly, but they might also find a few ways to save your business money.
Bookkeeping and tax procedures are time-consuming and require some specialized knowledge. Balance sheets, financial reports, cash flow, audits, and much more – an accountant can ensure that your company operates smoothly and streamlines its expenses.
This can be expensive depending on the complexity of your finances, but the benefits an accountant offers can be well worth it.
10) Create an Operating Agreement
An operating agreement constructs a framework of procedures and standards for your business. This is where you can lay out processes for member conduct, asset allocation, compensation policies, voting procedures, dissolution, and much more.
Missouri is one of the few states that require LLCs to have an operating agreement. This is good, as it allows your business to establish its management structure and other procedures before you begin your activities in the state. Not to mention, it makes your company more legitimate to courts, banks, potential business partners, and more. The operating agreement is an internal document, so you don’t need to submit it to the state. Just keep it on file for reference, or in case anyone needs to see it.
You can either draft one yourself using an online template, or you can hire an attorney or an incorporation service to take care of it for you.
Once you’ve drafted your agreement, it must be approved by each of your LLC’s members, then filed with the rest of your business documents. You do not need to submit it to the Secretary of State.
11) Acquire the Necessary Licenses
After filing your formation documents, your business is legitimate, but it might still need specific licenses before opening its doors in Missouri. This depends entirely on your business type and purpose, but there are three main state licenses you should know:
Professional/Occupational Licenses: There are a number of vocations the require special licensure through one of Missouri’s state boards. Say you’re opening a massage therapy business. You would first need to obtain a license from the state’s Board of Therapeutic Massage before taking any clients. You can find more information, along with a full list of licensed occupations, on the Division of Professional Registration website.
Environmental, Building, and Zoning Permits: If your business is going to construct a physical presence or work with the land, air, or water, you may need a permit from the Department of Natural Resources as well as a building or zoning permit from your county or city.
Department of Health Permits: These primarily apply to food service, hospitality, and health care businesses, but may apply to other business types as well. You can check the Department of Health website for more information.
Local Licenses: Your specific city, county, or municipality might have its own licensure requirements. Take a look at your local government’s website to find out.
12) Consider Business Insurance
Even though it’s not pleasant to consider, there’s always a chance that unforeseen events might take a toll on your assets.
While forming an LLC or corporation offers some personal asset protection, additional business insurance can also protect your business assets in cases of lawsuits, damages, etc. You can acquire insurance for your business products, vehicles, specific occupations and much more.
If you hire employees, you’ll also need to get workers’ compensation insurance. SBA.gov has a useful guide for determining which forms of insurance your new business might need.
13) Build a Website
Your company’s digital presence is just as important as its physical one. Like it or not, most potential customers will find your business online, and if you don’t exist online, you’re missing out.
But don’t worry, you don’t need to be an HTML or web design expert to build a website. Sites like WordPress and Squarespace make it easy to construct an elegant and responsive website, no coding necessary. But if you’re not comfortable or confident doing it on your own, you can always hire a professional web designer to take care of it for you.
14) Launch Social Media Accounts
Making your mark on the digital landscape doesn’t start and end with your website. Most successful businesses also have a robust social media presence on multiple platforms. Facebook, Twitter, and Instagram are all great ways to connect organically with potential customers and develop your brand voice.
Just don’t forget to publish consistent social media content, or you’ll have trouble building a base of followers.
15) Understand Ongoing Missouri Requirements
After you’ve launched your business, things will likely be moving at 100 miles per hour as you evolve and grow. But in all of the excitement, you can’t forget your state’s ongoing compliance requirements. Every state has its own annual or biennial business requirements.
Missouri Annual Reports aren’t required for all businesses. If you’re starting an LLC, you won’t need to worry about filing them. But if you’re going with a corporation, you will. This filing is due by the end of your incorporation month (the month you first incorporated your business) and costs $45 by mail or $20 online.
16) Check Out Missouri Small Business Resources
You’re not on this journey alone. There are plenty of free resources available to make starting and growing your business a smoother, easier process.
One of the most prevalent is SBA.gov. This website has a ton of valuable information and resources, even Missouri-specific ones, so you can find local business development centers, networking events, loan opportunities, consultants, and more. Take a look at their St. Louis and Kansas City district office pages and you’ll find this helpful resource publication (St. Louis and Kansas City).
The University of Missouri also maintains a website called Extension that assists small businesses, providing community courses, event notices, grant/loan information, and plenty more.
Equipped with all this great information, you’ll be ready to establish a firm foundation for your new business and guide it toward a bright future.