Every state comes with its own unique set of requirements and processes that are involved in starting a business in the region. Kentucky has been rated by Forbes as one of the most inexpensive states to start a business in due to low incorporation and administrative fees as well as lenient tax requirements for startups. More specifically, the state ranks 10th in lowest overall business costs, 2nd in lowest cost of living, and 14th in lowest sales tax.
In this quick guide, we’ll go over the basic process of starting a business in Kentucky:
Incorporate Under a Suitable Corporation Type
Once you have the idea for your business and you’re prepared to invest in the initial batch of equipment, inventory, and labor that will be needed to get the ball rolling, it’s time to make the endeavor official by incorporating the company with the state. In most cases, the option to form the company as a Limited Liability Corporation (LLC) will be the most advantageous approach for small business owners and entrepreneurs who want to minimize their risks and tax obligations.
This is a process that you could perform yourself, but it’s better to use a Registered Agent if you’ve never done it before in order to avoid potentially costly mistakes. Remember, it’s always a good idea to consult an expert for bespoke advice.
Obtain the Necessary Permits, License, and Insurance
Creating a comprehensive guide on all the kinds of permits, licenses, and insurance policies that are applicable to all the business types which operate in Kentucky would go far beyond the scope of any quick guide. Thus, the best approach here is to simply call your local chamber of commerce and ask for advice in this regard. Some business incorporation services will handle this due diligence for you and even help with the process of applying for the necessary permits and licenses.
Create a Reliable and Simplified Accounting Process
Now that you’ve properly incorporated the company and have obtained all the coverages and requirements you need to stay legally and financially protected, it’s time to decide on an accounting software and system that will help you keep track of every sale and expense in a detailed manner. This will drastically simplify the process of filing taxes at the end of the year, or quarterly, and will also ensure that everything goes smoothly in the event that you’re ever audited.
Make Sure Your Business Plan is Feasible
Finally, there’s no sense in carrying out all of the above steps and wasting all that time, effort, and money in a business endeavor that isn’t going to succeed in the long run. As such, the preliminary planning phase will play one of the most important roles in facilitating an optimal outcome for your business. Do your due diligence in this by conducting market research and attempting to generate proof of concept before you commit to a full-fledged business.
Are you considering starting a business in Kentucky? Let us know how you get on.