How to Start a Business in Kansas in 11 Easy Steps

If you live in Kansas and are thinking of starting a business, you may not know where to begin. Overall, the Sunflower State can be quite friendly to small businesses, with plenty of resources and funding options available. However, due to its relatively low population, entrepreneurs must be strategic about where they operate to ensure they attract the best workforce and economic opportunities.

That said, picking the right city or building an online business in Kansas can be highly profitable, thanks to the state’s low cost of living and favorable business taxes. To ensure you get off on the right footing, let’s break down the 11 steps you should take to launch your new Kansas venture.

The 11 steps to starting a Kansas business

1. Fine-Tune Your Business Idea
2. Create a Business Plan
3. Choose a Business Name
4. Choose a Business Structure
5. Set up Banking, Credit Cards, & Accounting
6. Get Funding for your Kansas Business
7. Get Insured
8. Obtain Permits & Licenses
9. Find Your Team
10. Market & Grow Your Business
11. Open the Doors!

1. Fine-tune your business idea

One of the most important steps in starting a business is validating your idea. While Kansas is friendly to small businesses, not all industries are well-suited to the state. According to the Kansas government, the top-performing industries include:

• Manufacturing
• Professional Services
• Logistics and Distribution
• Agriculture
• Aerospace
• Animal Health
• Food Manufacturing and Processing
• Energy Production

Additionally, some cities are great for small businesses of any kind, such as Overland Park, which is part of the greater Kansas City Metro area. According to recent data, Overland Park is the second-best city in the country for small businesses, thanks to a low unemployment rate, talented workforce, and relatively low cost of operation.

Overall, when developing your business idea, try to combine these factors:

• What you’re skilled at (or what you can learn to do easily)
• What you’re passionate about (motivation fades if you’re not passionate)
• The potential market share (is your industry growing or shrinking?)
• The demand from your demographics
• The competition

Ideally, your new business idea will strike a balance among these elements well enough to put you on the best path to success.

2. Create a business plan

Having a business idea isn’t enough to get your company off the ground. Next, you need to draft a comprehensive and detailed business plan. This plan must outline all the core components of your business and how it will operate both once you open and for the first few years. The main reasons to create a plan include:

• Organizing your assets and skills into an actionable list
• Showing investors and lenders how you will make money
• Creating a roadmap for the first five years of doing business

Simply put, not having a business plan means you’re starting blind, which makes it much harder to navigate the pitfalls and obstacles you’ll encounter. Some crucial components of this plan include market research, a financial and marketing plan, and where you hope to operate your business. Let’s break down each component further.

Market research

Knowing your market inside and out is crucial for success. What kind of competition are you going up against? Is demand for your product or service increasing or decreasing? Even knowing whether a city’s population is going up or down can make a difference in the success of your business.

Overall, you should have a good idea of how much of the market you can capture immediately and a realistic projection of how much you can capture in the next few years.

Financial plan

Many entrepreneurs finance their business goals and dreams themselves, but you may also need to secure funding from external sources, such as a bank, angel investors, or a government grant.

Your financial plan should outline what assets you’re putting up to start the business, what your projected earnings will be, and how much money you’ll need to keep the business afloat during the first few years. This part of the business plan is essential for securing funding, as lenders and investors need to know whether your company is financially strong (or competent) enough to make it.

Marketing plan

Marketing is an essential part of running any business, as you can’t sell products or services if no one knows you exist. While marketing strategies can change and shift based on data, you should have a solid foundation of campaigns and marketing messages you’ll promote before and after launching your business.

Another part of the marketing plan should be how much each campaign will cost, and its potential return on investment. As with the financial plan, this is what lenders and investors want to see before funding your business.

Choose a location

We’ve already mentioned that Overland Park is the second-best city in the country for small businesses. However, Kansas has multiple cities that are on the rise, meaning it’s easier for your new venture to succeed. Other examples include Valley Center, Fort Scott, and Eudora, but not all cities are ideal for all types of industries.

When picking a location, make sure it aligns with your business needs. For example, if you’re trying to open a manufacturing plant, you don’t want to open a factory in a large city like Topeka or Kansas City. Similarly, if you’re trying to sell to customers, you want high-traffic locations, not a small town with a low population.

Finally, consider zoning laws and regulations. Each city and county in Kansas sets its own rules regarding which businesses can operate and how, so you must maintain compliance to keep your company in good standing.

Determine if you’re an online-only business

In the modern era, it has never been easier to start an online-only business. As long as you have a website and social media profiles, you can start selling to customers anywhere in the world.

Kansas is making moves to help entrepreneurs start and manage home-based businesses, with a new statewide bill being introduced in February 2025. However, even if you start a company in your living room, you still must register with the Kansas Secretary of State and the Department of Revenue to collect sales taxes and report revenue to the state.

Also, in some cases, you may be able to start an online-only business and move into a brick-and-mortar storefront later on. Ideally, you can validate your business idea with an online presence and then expand your brand to reach customers in different markets with multiple offices and stores.

3. Choose a business name

While choosing a name for your new company may not seem as important as other steps, it can still make a huge difference in your potential success. As with other states, Kansas requires all new companies to have a unique name, so one of the first things to do perform a Kansas business entity search by checking the database to see whether your preferred name is available.

If you’re not sure how to name your new venture, consider these factors:

• Logo/Branding – How will the name look when converted into a logo? How will that logo look on a website or business cards?
• Memorability – Does your business have a generic-sounding name that is easily forgotten? Or something that captures the imagination and sticks in people’s minds?
• Tone – What kind of tone do you want your company to have? Examples include professional, authoritative, fun, whimsical, and historic. Ideally, your brand name should reflect that.
• Relevance – Sometimes, you want your business name to be relevant to your product, service, or industry. However, you may also want to avoid choosing a name that boxes you into a particular type of product or service. This way, you can expand into other revenue streams without needing a name change.

Another point to consider is the difference between your official business name and a DBA (doing business as). So, while your official name may be something straightforward, you can create a DBA Kansas that fits the brand personality. Kansas does not require companies to register a DBA, but some cities or counties may require registration, so pay attention as you finalize the location of your business.

4. Choose a business structure

Once you’ve validated your business idea and come up with a name, now is the time to choose the right structure for your company. Each structure has pros and cons, so it’s imperative to determine which one will work best for your needs, both now and into the future. The four primary options include:

• Sole Proprietorship
• Partnership
• Limited Liability Company (LLC)
• Corporation

Common business structures: pros and cons

Here’s a quick overview of each structure and the benefits and downsides of each one, including how they are taxed.

Sole proprietorship

In this case, you’re setting up a business as the sole proprietor, meaning you don’t plan on hiring any employees or separating your business accounts from your personal ones. This option works best for individuals who sell items, such as artists or craftspeople.

Pros

• Simple to set up, and you don’t have to register with the state
• No secondary taxation
• Full control over how the company operates

Cons

• You are liable for any business debts or obligations
• It’s much harder to secure financing or investment
• You can’t scale your business because you can’t hire employees

Partnership

A partnership is a business agreement between two or more partners. To form this structure, you’ll need a partnership agreement, which outlines the roles, responsibilities, and financial burden of each partner. Partnerships can be general, limited, or limited liability. A general partnership doesn’t need to register with the state, but limited and limited liability partnerships do.

LPs and LLPs help limit the financial liability of each partner and can make it easier to secure financing as a result.

Pros

• Full flexibility regarding how you and your partner operate the business
• Shared duties and responsibilities of the business
• Profits are taxed at the personal level, meaning they “pass through” to each partner

Cons

• It can be difficult to dissolve a partnership or resolve disputes
• All partners are liable for business debts and obligations
• One partner’s actions can affect the entire business structure and financial stability

LLC

A limited liability company serves as an independent entity separate from the founding member(s). LLCs offer tax advantages, organizational flexibility, and financial protection, making them a viable option for most small businesses. Plus, you can form an LLC as a single member or create a business with any number of founding members. When forming an LLC, you’ll need to draft an operating agreement that outlines everyone’s roles, responsibilities, and financial stake.

Pros

• You have full flexibility with how you are taxed. You can choose pass-through taxation or opt for the LLC to be taxed separately, like a corporation.
• You can draft an operating agreement to run the business however you want. Some members may be silent partners, while others may have a more active role in daily operations.
• Because the LLC is an independent entity, it’s easier to get funding and protect all founding members from business debts and liabilities.

Cons

• LLCs are not ideal for raising money through angel investors, as they must become members to earn a share of the profits, forcing you to create a new operating agreement.
• It’s more complicated and expensive to form an LLC than it is a partnership or sole proprietorship, and you must register with the Secretary of State (for a fee).

Corporation

There are two types of corporations you can create: C-Corp and S-Corp. The advantage of an S-Corp is that you can choose pass-through taxation, meaning the business isn’t taxed separately. As with an LLC, the corporation is a separate entity that can exist in perpetuity, independently from the owners or founders.

Pros

• Because a corporation is a legal entity with rights, it’s easier to secure funding and raise capital because the corporation can issue stocks, rather than have investors become founding members.
• S-Corporations offer flexible taxation with pass-through income, but they require stricter organizational rules.
• Forming a corporation means you’re not liable for business debts and obligations.

Cons

• Corporations must have a rigid structure and detailed documentation, which can be tough for a small business.
• C-Corporations are taxed separately, so that can eat into your profit margin.
• Since a corporation is a separate entity, it’s easier to lose control over how it operates and who is in charge.

5. Set up banking, credit cards, and accounting

Once you have your business structure organized and registered with the state (if applicable), it’s time to set up your company finances. Even if you’re creating a sole proprietorship, it’s best to try and separate business expenses and earnings as much as possible. This way, it’s easy to keep track of how well you’re doing and what may need improvement.

A merchant bank is necessary to maintain separation between your business profits and expenses, and you’ll need an employer ID number from the IRS and your registration number from the Kansas Secretary of State. You’ll also need these numbers before you can open a business credit card or line of credit, which can help cover various expenses until you have a positive revenue stream.

Accounting is another crucial element of maintaining organized records and operational efficiency. While you may be able to handle accounting yourself in the beginning, it’s always best to outsource the job to professionals as you grow your business. Not only can accountants help manage your finances, but they can also help ensure compliance with state and federal tax laws.

6. Get funding for your Kansas business

Part of what makes Kansas such a business-friendly state is that it offers resources for small companies to secure the funding they need to thrive. In some cases, this funding may come in the form of state-level Kansas small business grants. In other cases, the state may provide tax breaks or other financial incentives to improve your profit margin.

One of the best resources to discover funding opportunities is the Kansas Business website. Here’s a quick overview of the funding and incentive options available:

• Business Tax Incentives – Kansas may reduce or eliminate various taxes for businesses establishing themselves within the state. One example is the Promoting Employment Across Kansas (PEAK) initiative, where companies can keep up to 95 percent of their payroll withholding tax for up to 10 years by creating jobs.
• Kansas Angel Investor Tax Credit – This program pairs angel investors with small businesses by incentivizing investors to receive up to a 50-percent tax credit when working with Kansas-based companies.
• Rural Opportunity Zones – Kansas has designated 77 different counties as opportunity zones, which offer financial incentives for new residents and businesses.
• Rural Developments and Agricultural Grants – You may receive grants from the USDA and Kansas to develop different parts of the state for economic development or agricultural infrastructure.
• SBA Microloans – The Small Business Administration helps small businesses secure funding by acting as a cosigner. The Microloan program is designed to help companies secure loans up to $50,000.
• Network Kansas – This nonprofit organization helps small businesses gather the tools and resources they need to succeed. The organization not only helps entrepreneurs with guidance and consulting but can also help pair them with investors and lenders to secure funding as needed.

Overall, grants are preferable to loans because you don’t have to repay them. However, grants often come with strict qualifications and requirements, so make sure your business meets them before applying.

7. Get insured

Part of running a business means protecting yourself from unexpected expenses and losses. One of the best ways to ensure your business stays solvent is to get the right insurance. In Kansas, all companies must have a workers’ compensation insurance policy in place to protect workers from any injuries or sicknesses they may experience while on the job.

However, although the state doesn’t require other types of insurance, they’re still essential to running your business and keeping it financially protected. Common commercial insurance policies include:

• General Liability Insurance – This coverage protects your business from lawsuits that may stem from injuries or incidents that happen to customers or visitors.
• Property Damage Insurance – Whether you manage inventory in a warehouse or run a physical storefront, you need to protect your property from damage, such as severe weather or flooding.
• Commercial Auto Insurance – If you use cars or other vehicles for your business, you need to maintain commercial insurance, which allows you to have employees driving these vehicles.
• Errors and Omissions Insurance – This type of coverage is essential for companies that provide professional services, such as accounting firms or law firms. E&O insurance covers lawsuits that may stem from errors or mistaken advice given to clients.
• Cyber Insurance – Cyberattacks can cripple your business and potentially expose customer data. This coverage can help mitigate losses from cyberattacks and limit your liability if sensitive information is leaked or stolen.

8. Obtain permits and licenses

Although a general Kansas business license isn’t required by the state, you may still have to obtain licenses and permits to operate within the state. First, some cities or counties may require business licenses to operate, such as Kansas City or Tonganoxie. Make sure to check these requirements before opening a storefront or establishing a business address within a particular city.

On top of city and county-level licenses, Kansas requires certain types of businesses to obtain permits or licenses. Some common examples include:

• Alcohol Sales
• Food Service
• Accounting Services
• Amusement Rides
• Animal Shelter
• Barber
• Brewery
• Car Dealer
• Contractor

You can find a complete list of industries that require licensing on the Kansas Business website. This site also provides links to the department or agency overseeing these permits, so you know who to contact. For example, alcohol sales fall under the jurisdiction of the Kansas Department of Revenue, Alcohol Beverage Control (ABC) Division.

Federal income tax and Kansas sales tax

As you start to earn revenue, you must pay federal taxes, including income tax. As we mentioned, business structures like LLCs and S-Corporations allow for “pass-through” income, meaning any revenue you earn from the business is taxed as personal income, rather than separate profits. Additionally, the IRS requires you to withhold employment taxes from your workers, such as Social Security and the Federal Unemployment Tax.

When doing business in Kansas, you must obtain a sales tax permit to collect sales taxes on all of your products or services. You can apply for and register to collect sales taxes with the Kansas Department of Revenue.

9. Find your team

No matter how motivated or talented you are as an entrepreneur, there’s no way you can handle every aspect of running a business yourself. Even if you happen to manage all of your daily operations, chances are you’ll need to rely on specialists, contractors, or suppliers to keep everything running smoothly.

So, before you launch your new company, make sure you have the right people on your side. High-quality workers, vendors, and contractors can make all the difference, so take the time to vet and curate a list of top talent.

Compliance with Kansas payroll laws

The first thing you must do as an employer is register with the Kansas Department of Labor. Setting up an account will provide you with access to tools about Kansas regulations and allow you to withhold state-level unemployment taxes.

Generally speaking, Kansas follows all federal guidelines, which include reporting new hires (and re-hires for laid-off employees) within 20 days. Kansas also requires employers to follow the federal minimum wage of $7.25/hour and all other federal laws regarding family leave, worker injury claims, and discrimination or harassment. It’s best to familiarize yourself with all of these rules and regulations before hiring employees to avoid any surprises or errors.

Hire contractors

As with all states, Kansas allows companies to hire independent contractors instead of employees. As a rule, contractors are not able to receive benefits, such as unemployment or retirement benefits. However, to avoid misclassification, it’s imperative to understand the “right to control” rule.

As an employer, if you control how or when someone does their job, they are an employee, not a contractor. Independent contractors must have the flexibility to handle their duties however they see fit. If you can control the work a contractor does (or forbid them from seeking employment elsewhere), you must classify them as employees and start withholding Social Security and unemployment taxes.

10. Market and promote your business

As we mentioned, marketing is crucial for getting your new venture off the ground. All successful companies promote themselves, and the more you market your products or services, the easier it will be to get and retain new customers. Best of all, digital marketing techniques have never been more accessible or easier to master, so let’s break down some of the best strategies.

Create a mailing list or newsletter

Email marketing is just as valuable in 2025 as it has been since the beginning, as long as you do it correctly. Building a list of subscribers is relatively easy, but converting those subscribers into frequent customers from your newsletter is a tricky proposition. Still, if you don’t have a mailing list at all, you can’t re-target existing customers or convert leads into buyers.

So, although there is a bit of a learning curve, a mailing list can help sustain your business by driving more traffic to your sales pages over the long term.

Create special offers for first customers

Overall, it’s much easier to keep existing customers than attract new ones, but if you’re a new business, you don’t have any customers at all. One of the best ways to get people into your storefront (or onto your website) is with attractive, limited-time offers. These discounts and deals can coincide with your launch to boost initial sales. From there, you can gather feedback and refine your approach to keep the momentum going.

Collaborate with local brands and businesses

No matter where you set up shop in Kansas, chances are you can partner with other local businesses and organizations to spread the word and boost your bottom line. For example, you can join local events and festivals, either as a vendor or a sponsor. Many nonprofit organizations need commercial sponsors for fundraisers and other events, and doing so can help improve your brand’s presence and awareness.

Invest in word-of-mouth marketing

When customers are satisfied with your products or services, they’re likely to recommend you to friends, family members, and colleagues. Word-of-mouth marketing is powerful because it comes with inherent trust and reliability. As a new business, you can incentivize your first customers to spread the word by offering referral discounts or deals.

Solicit online reviews

Online reviews are the next best thing to word of mouth, and it’s relatively easy for companies to generate these reviews. Although you can’t solicit positive feedback, you can reward customers for providing an open and honest review of your business. Also, while bad reviews are sometimes inevitable, being proactive about responding to them and handling complaints makes your company look better overall.

Generate content to drive traffic

Content marketing is a vital part of any promotional campaign, as it drives traffic to your website or social media profiles. Best of all, if you can create content that goes viral, you’ll be able to capitalize on the newfound fame and attention and boost your revenue accordingly. Examples of content marketing include videos, blog posts, white papers, infographics, and much more.

11. Open the doors!

Now that you have everything in place, it’s time to launch your business and start serving your customers or clients. Opening the doors can be an exciting time, but don’t get discouraged if it takes a while to start earning revenue.

Ideally, you can begin promoting your business as soon as you have registered it to help build interest and engagement with your target audience. That way, once launch day arrives, you should have a decent stream of customers coming in the door. If you are a service-based business, you may want to have a sign-up event for clients and businesses to see what you have to offer.

Planning a successful launch event

There is no “right” way to launch a new business, but here are some tips to help ensure your opening day is as successful as possible.

• Promote Heavily – Make sure everyone is aware of your launch date and what your business has to offer. The more you promote, the more likely people will show up.
• Offer Incentives – These incentives can be prizes, branded swag, or discounts and deals. Making the incentives time-sensitive or limited (e.g., for the first 100 customers) can drive traffic to your store.
• Collaborate With Other Businesses – If you’re opening a storefront or warehouse, you can make the event more engaging with entertainment, food, and other attractions.
• Create a Mailing List – As people come through and buy from your business, you should capture their emails and contact information to start your first official marketing campaign.

Another point to consider is the difference between a “soft” and “grand” opening. Soft openings allow you to welcome customers and fix any operational issues, while a grand opening should serve as the big kickoff for your new business.

Conclusion

Once you’ve completed all of these 11 steps, your business will be on the best path toward success. As a rule, the more time you spend on planning and preparation, the smoother it will be to launch and manage your new company. While you can learn as you go, doing so can be costly and potentially derail your goals.

On the other hand, waiting too long can deflate your momentum and make it harder to persevere when obstacles arise. So, starting a business is about preparing yourself enough to feel confident in your idea. Now, make it a reality!

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