Missouri, situated at the crossroads between east and west (it’s home to the literal “Gateway to the West” afterall). Missouri has the benefit of being in the middle of the country—the 2020 US population center is in Hartville, while the geographic center of the Lower 48 is just across the border, in Lebanon, Kansas. Aside from its convenient geography, the state offers an array of tax credit and exemption programs, as well as state-funded investment schemes. Small businesses make up the vast majority of companies in Missouri. So, if you live in the state and want to start a business, you won’t be alone. Here are resources to get you started.
Start a Business in Missouri
1. Choose a business idea
First thing first for any entrepreneur, in Missouri or elsewhere: Choose a viable business idea. Will you sell a product or service? Perhaps a range of both? Regardless, there are two key questions you should ask yourself before moving forward:
- Who is your customer? Understanding the profile of who your business will sell to and what they’re looking to buy is one of the most important considerations you’ll make as a small business owner. Will you sell direct to consumer (B2C) or business to business (B2B)? Will you sell online or through a brick-and-mortar storefront? To make these decisions, survey prospective customers, analyze marketplaces, and research industry trends.
- What is your projected profitability? The key to success in business is the ability of the company to churn a profit. There are several variables to consider in your profit strategy, including pricing, distribution, and the costs you’ll incur over the course of building out the business. What moves do you need to make to break even? Try to figure out how much product you need to move, or services you need to bill, to cover your overhead costs and generate a profit.
2. Name your business
Once you have an idea for your Missouri business, you’ll have to name your business. Choose a name that’s simple, memorable, and indicative of what you’re selling. You also need to follow specific state-level rules. Here are guidelines when choosing a business name in Missouri:
- Be original. Your Missouri business name must be wholly different from any other business entity registered in the state. You can run a search of existing businesses on the Missouri Secretary of State’s website to check if your preferred name is available.
- Include certain words. Depending on the structure you choose for your Missouri business, you may be required to include certain words in your business name. For example, sole proprietorships must operate under the surname of the owner. Limited liability companies (LLCs) must contain the phrase “Limited Liability Company” or “Limited Company,” or an abbreviation thereof (LLC, L.L.C., LC, or L.C.). Corporation names must contain the words “Corporation,” “Company,” “Incorporated,” or “Limited,” or an abbreviation of these.
- Exclude certain words. The name of your Missouri business may not contain words that would confuse the business with a government agency, like the FBI or State Department.
- Reserve your name. To reserve a business name in Missouri, you must file an Application for Reservation of Name with the Secretary of State’s office, along with a $25 fee.
- Adopt an assumed name/DBA. If you’d like to operate your Missouri business under an alternative name, also known as a “doing business as,” or DBA, you’ll have to register this information with the state. DBAs in Missouri must comply with state naming rules, meaning they too must be entirely unique. You may then register a unique DBA through the Secretary of State’s office, and pay a filing fee of $7.
- Secure a domain name and social media handles. In today’s business climate, an online presence is absolutely crucial. Purchase a domain name (URL) and choose social media usernames that align with your business name or DBA so customers can easily find you.
3. Create a business plan
To get your Missouri business off the ground, you’ll need a business plan. A successful business plan includes your business function, thorough market research, the business’s organizational structure, products or services, target customer profiles, and detailed strategies for marketing, logistics, and finance.
You can use a customizable template to draft your business plan. It should reflect your overall business goals and give a sense of how you want the company to operate generally.
4. Choose a business structure and get started
There are a variety of business structure types for you to choose from when forming your Missouri company. Each one boasts its own set of advantages and disadvantages.
Sole proprietorships are the default designation for anyone transacting business in Missouri, or anywhere else in the United States. Sole proprietorships are owned and operated by a single person, and all earnings are subsequently taxed on the proprietor’s personal tax return. In this way, sole proprietors avoid so-called “double taxation” (taxes on income at the business level, and again at the business owner’s personal income levels). A downside to operating a sole proprietorship is that proprietors are personally liable for any debts or legal damages incurred by the business.
Limited liability company (LLC)
The Limited Liability Company, or LLC, differs from a sole proprietorship in that it can have multiple owners, known as “members.” Like sole proprietors, members are generally taxed at their personal income levels. The advantage of LLCs over sole proprietorships, however, is that members enjoy liability protection for their personal assets in the event debts or legal damages are incurred by the company. Only the business’ assets are reachable. Missouri does not impose a franchise tax on LLCs, nor are LLCs required to file annual reports.
One of the main benefits of forming your Missouri business as a C corporation is the fundraising opportunities inherent to the format. Corporations can issue stocks to shareholders—meaning individuals, or even other companies, can directly invest in the growth of your business. The downside of the corporate structure is that corporations are taxed twice, once on business income and again once that income is distributed to owners and/or shareholders. Missouri applies a 4% tax on corporate income, but for mature businesses that earn steady, high profits, the ability to raise funds through stock issuance may justify the added complexities. Corporations, like LLCs, enjoy personal asset protection for owners and shareholders.
Getting a federal employer identification number (EIN)
Once you’ve chosen a formal legal structure for your Missouri business, you must next apply for a federal employer identification number, or EIN. Although EINs are issued by the US Internal Revenue Service (IRS), both federal and state tax authorities use them to identify business entities and assess their obligations. You can apply for an EIN online through the IRS website, free of charge.
Incorporating within Missouri
The process for registering your business with state authorities in Missouri will vary depending on your choice of business structure. Sole proprietorships, being the default designation for anyone transacting business in the United States, do not require any special registration steps.
- LLCs. To register your Missouri LLC, you must file Articles of Organization with the Secretary of State’s office. You can apply online or by mail. If you file online, you must pay a $50 filing fee, and $105 if by mail.
- Corporations. To register your Missouri corporation, file an Articles of Incorporation of a For-Profit Corporation (Corp. 41) form with the state. This form can be filed by mail or online. The fee to file is $50 for the first $30,000 of authorized shares, with another $5 for each additional $10,000 of authorized shares.
5. Obtain business licenses and permits
There is no general statewide business license required in Missouri; however, all businesses selling tangible goods or taxable services in the state must apply for and receive a sales tax license, which is free of charge. Additionally, certain counties and municipalities may require you to obtain licenses for your business location, as well as some professions and business activities. Check with the local clerk’s office where you intend to do business to determine licensing requirements. Likewise, research industry-wide licenses in Missouri to see if your business is subject to any special permitting.
6. Examine business insurance options in Missouri
Purchasing insurance for your Missouri small business is essential for managing risk. It can also afford you peace of mind for Missouri entrepreneurs, allowing them to better focus on growing the business. Types of business insurance available for Missouri businesses include:
- Workers’ compensation insurance. Known as workers’ comp, this insurance policy covers injuries and illnesses that might befall employees on the job. Workers’ comp is required for Missouri businesses with five or more employees.
- General professional liability insurance. This policy protects businesses from lawsuits, some financial losses from property damage, and third-party injuries on the job (such as customer slip-and-falls). You’re not required to buy general liability insurance under Missouri law, but if you want to rent an office, storefront, or warehouse space, you may be required to purchase it under your lease.
- Business interruption insurance. Business interruption insurance covers against earnings lost due to damage to physical property so severe they interrupt operations—such as tornadoes, for example, which are common in the state of Missouri.
7. Understand financial considerations
Aside from purchasing insurance, you may need to make other investments to get your Missouri business off the ground, such as hiring professionals or contractors, like lawyers, accountants, or web designers. You may also want to pay for digital services, like social media management or professionally designed business websites. If you decide to run a physical shop or ship items through a warehouse, you’ll need money to rent space. If these startup costs seem overwhelming, there are business resources. Consider also visiting a bank to set up a business bank account for handling business expenses and managing cash flow.
8. Market your business
Once your Missouri business is up and running, your job is far from over—you still need to create a marketing strategy for your products or services. When it comes to marketing, word of mouth is a great start, but to grow your business, you’ll need a solid marketing plan detailing how you will approach this big task. A thorough marketing plan will cover the strategies you’ll use to attract customers, such as:
- Paid advertising and promotion. Paid advertising is one of the more traditional, and trusted, methods of marketing. You can do this yourself or hire an agency to craft ads on your behalf.
- Social media. Use social channels like Instagram, Facebook, YouTube, or TikTok to promote your products and services and make it easier for customers to find out information about your business.
- Public relations. Identify and reach out to local—or even national—media outlets to broaden your reach, cultivating relationships with publications and journalists who can help increase brand visibility for your business.
- New business and customer retention. Work to build relationships with your customers to keep them coming again and again, and even have them spread the word to their own networks.
Starting a business in Missouri FAQ
How much does it cost to register an LLC in Missouri?
It costs, at a minimum, $50 to register your LLC with the state.
How long does an LLC last in Missouri?
There is no annual renewal requirement for LLCs in Missouri, meaning your LLC may exist indefinitely until dissolved.
Does Missouri have a statewide business license?
There is no general statewide business license required in Missouri, but all Missouri businesses that sell tangible goods or taxable services must obtain a retail sales tax license. There is no fee to apply for this license.