Situated in the heart of the United States, Kansas is a state that is named after the Kansa Native American tribe, which inhabited the area. From an economical point of view, “The Free State” (also officially known as the “The Sunflower State”) – aka Kansas – had the total gross domestic product in 2014 of US$140,964 billion, according to an estimate done by the Bureau of Economic Analysis. Although in 2015, the job growth rate was only .8% - among the lowest in the country – the state has plenty of potential when it comes to starting businesses.
The state’s most prolific industry sector is agriculture, nearly 90% of Kansas' land being devoted to it. Kansas is also ranked 8th in the US in the production of petroleum and natural gas. Another important industry that has a substantial impact on the state’s economy is the aerospace industry.
Big companies headquartered in Kansas include Spirit AeroSystems, Bombardier Aerospace (LearJet), and Textron Aviation.
But let’s learn more about what it means to start a business in Kansas. Here are a few basic and essential steps towards becoming an owner.
1. Pick a great idea
Choosing the right business idea is especially important when you live in a state like Kansas that is not as economically developed as other American states. Finding a gap in different markets can be a great starting point in the journey of becoming your own boss.
First of all, it is highly important that your future company suits your interests, goals and skills. This way it will be much easier to keep yourself motivated during the bumps of forming and developing your business – which requires a lot of dedication and time.
To give you a few ideas - these are a few types of enterprises that are most popular and bring consistent income to owners in “The Sunflower State”:
· Coffee shops
· Liquor store
· Outdoor stores
· Health clinics for pets
· Drone businesses
Additionally, here is a short list that includes companies the highest revenue growth rate during the last 3 years:
· AgForce Transport Services
· Apollo Insurance Group Inc.
· Aratana Therapeutics Inc.
· ARCO National Construction - KC Inc.
· Asset Services Inc.
· Bank of the Prairie
· Black & McDonald
· Brown Button Estate Sale Services
· Clemons Real Estate
· Cowell James Forge Insurance Group LLC
· CrossFirst Bank
· D&L Transport LLC
· Dynamic Logistix
· EAG Advertising & Marketing
· International Builders & Consultants Inc.
· JNA Advertising
· Mortgage Lenders of America
· Metro Construction Management Inc.
· Stewardship Investments LLC
2. Research, research research
This may be the most important steps of starting a business. Knowing the marketplace and filling a real need is vital for your business’s success and development. The easiest way to grow and attract prospects is to know everything there is to know about your competitors. Being a step ahead is a must. As technology has a huge impact and changes many – sometimes unexpectedly – aspects of running a business, every business owner or future owner should be up-to-date with technology.
Also doing research regarding the steps of starting a company – which most of the time can be quite tedious and energy consuming – will definitely simplify the process, as you will know what to expect and it could ultimately save you a lot of time.
3. Plan your business
Creating a complex business plan even before you start the initial steps of forming will help you keep things organized and the chances of your business’s success will drastically increase more than you would think.
A business plan should address the following:
· Executive Summary
· Product or service description
· Sales & Marketing
· Financial plan
· Employers & employees
· Target audience
Remember to keep it short so it can be easy to follow!
4. Choose a business entity
As the state of Kansas has 12 types of taxes it is highly important to choose a business structure that perfectly suits your future business. The entity will ultimately define the ownership type and the owner/s’ responsibilities, each structure having different advantages. Consulting a tax practitioner – which can be either an accountant, attorney, enrolled agent etc. – may be the best idea if you are a first-time owner or have little knowledge about taxes and business-related procedures.
These are the most commonly used business structures:
The simplest and most common form of business, the sole proprietorship is a company owned and operated by a single person. The earnings are reported on the individual’s income tax return. Owners usually make estimated tax payments, because the income taxes are not automatically withdrawn from their business income.
This type of business is owned by at least two individuals who each contribute money, property, labor or skills. A partnership is not a taxable entity, which means that each partner has to report the earnings – similarly to sole proprietorships.
A legal entity created under state or federal law with an existence separate and apart from its members or stakeholders, a corporation reports business income on a corporate income tax return, and may need to file estimated tax payments. Additionally, corporations also have reporting and registration obligations to the Secretary of State.
S Corporations are not usually taxable entities, shareholder including their share of income (or loss) on their personal income tax return – as partnerships and sole proprietorships.
Limited Liability Company – LLC
This type of entity is a business typically owned by one or more individuals. It has combined aspects of partnerships and corporations. LLCs must register with the Secretary of State.
5. Create a business bank account
Separating your personal bank account from your business account will help you easily keep track of your funds. This way you will be able to simplify accounting and also look more professional and credible in front of your future customers. Having a business bank account is especially important if you choose to own a corporation or an LLC because it will help you protect your business’ corporate veil.
6. Form a suitable team
Hiring the right people is a determining factor when it comes to your business’s success and development. The perfect team is usually made up of motivated and ambitious employees along with experienced business advisors – lawyers, accountants, marketing experts etc.
7. Always keep an open mind
Last, but not least, always keep an open mind and embrace that changes that technology brings. Being prepared to adapt can help your business flourish and have long-term consistent success.