How to Start a Business in Nebraska in 11 Easy Steps

We know Nebraska for its high quality of life, expansive farmlands, vast prairies, and endless skies. 

But Nebraska’s business-friendly environment makes it ripe for entrepreneurs.

For instance, the Cornhusker state’s small business tax incentives and government grants, low business costs (8% below the national average), attractive real estate prices (18% below the national average), affordable utility costs (13% below the national average), and a bustling job market all combine to make Nebraska a great place to start a business. 

And despite its sparse population (smaller than Houston), Nebraska offers aspiring business owners (like you) the opportunity to enter a competitive niche and pursue their entrepreneurial dreams.

But to start a business in Nebraska, you must take specific steps, like complying with the state license and permit regulations, federal and local tax laws, insurance requirements, and payroll rules.

Starting a new business can seem daunting, especially if this is your first time, our guide is here to help you navigate the in and outs of the process without losing your cool. 

Let’s walk those steps together and kick-start your new Nebraska business.

The steps:

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 Nebraska business
7. Get Insured
8. Obtain Permits & Licenses
9. Find your team
10. Market & Grow Your Business
11. Open the doors!

Step# 1. Fine-tune your business idea

Your first step in starting a business in Nebraska is choosing a viable business idea that’s affordable, profitable, scalable, and suitable for your needs.

You prove the first 3 using strategies that calculate your startup and running costs, projected profits, market size, and the percentage of customers you hope will become clients.

But it’s the last one that’s crucial (you) because when you start a business in Nebraska, it becomes an integral part of your life, so it must suit how you want to live.

Also, consider your skills, experience, financial capabilities, natural abilities, interests, and personal goals when validating your idea because those are the ingredients that make a successful business.  

Okay, let’s look at how you validate your business idea.

How to validate your business idea:

Validating your idea helps confirm it provides a need or solves a problem for a significant enough audience willing to pay your asking price.

All pretty important, right?

And it does it by answering questions like:

• What will you sell? Will it be a product or a local service?
• Why will you sell it? What are your target audience’s needs, and how does your idea meet them?
• Who will you sell it to? Who are your ideal clients?
• Where will you sell it? What are your prospects’ shopping habits (where do they buy what you want to sell)?
• How will you sell it, and for how much? What marketing strategies will you use, who are your competitors, and can you compete at a competitive price?

You’re probably asking, where do I find that information?

The answer is in your business plan, which we’ll look at next. 

But what if you need a business idea?

No worries, here are some that suit Nebraska.

Popular Nebraska business ideas:

• Agricultural services
• Eco-friendly products store
• Outdoor adventure tours
• Local food market
• Craft brewery
• Fitness and wellness center
• Technology consultancy
• Home renovation services
• Event planning
• Pet services

Okay, now for your business plan:

Step# 2. Create a business plan

A business plan has 3 purposes: to validate your idea, outline how you’ll achieve it, and convince others to invest.

Plans come in 2 forms: Traditional and one-page, and which you use depends on your needs and goals.

Both include 3 crucial sections:

Market research

MR gathers, analyzes, and interprets information about your chosen business idea to learn about its market trends, your prospect’s buying habits, and your competitor strategies to ensure your niche is viable. 

Market research uses specific strategies to gather this info; you only need to learn how to read and apply it, and then you can create your marketing plan.

Marketing plan

Your MP contains how, when, and where you’ll promote what you sell to your target audience, and you create your marketing plan using the results from your market research. 

The depth of your M.P. depends on the market you’re entering but often includes your advertising strategies (online or traditional), promotional platforms (website or Facebook, etc.), and time-sensitive objectives (when and or how long you’ll run specific promotions).

Financial plan

Now, let’s talk about money.

The F.P. section of your business plan ensures your idea is financially viable by calculating your startup and running costs (fixed and variable). It also contains your expense budget, cash flow projections, balance sheets, and revenue forecasts if you need external funding. 

Choose a location

The correct location is essential for your business success for several reasons, especially if you rely on a high-footfall of passing traffic like the retail or food industries.

Other aspects to consider when choosing a location are your target market, visibility, customer access, necessary resources, costs like utilities and rent, and zoning requirements.

Nebraska zoning laws and regulations:

Nebraska zoning laws regulate which businesses operate in specific locations and can include high-streets to home-based businesses.

Zoning laws also exist to preserve our green spaces, control pollution, and enhance town developments.

Laws and regulations vary throughout Nebraska at city and town levels, so contact your local planning or zoning department for further information.

Decide if you’re an online-only business

Choosing an online-only business depends on your niche, like providing a consultancy service via your website or selling products on a platform like Amazon or Etsy. However, most brick-and-mortar businesses also need an online presence to promote their brand and enable prospects to find them.

To create a successful online presence, you might require:

• Website: A branded website that showcases your services or products, facilitates orders, enables appointments, and features customer testimonials.
• Social media presence: Platforms like Instagram, Facebook, TikTok, and YouTube can help you engage with your audience, create a community, and promote your website.
• Supply and distribution plan: Entrepreneurs selling products need a supply chain and distribution plan to remain in stock and facilitate delivery.
• Online tax laws: Any business (even those not based in the Cornhusker state) that sells to Nebraska residents must get a seller’s permit from the Nebraskan Department of Revenue.
• Nebraska-specific regulations: All online businesses must comply with state and federal consumer protection laws and adhere to privacy and data security regulations and advertising standards.

Step# 3. Choose a business name

Choosing a catchy and unforgettable name is crucial for any small business owner (on or off-line) as it conveys your brand’s purpose and attracts your target audience. 

Your business name should suit your niche and brand personality, be available as a domain, and connect with your client’s emotions. 

Luckily, strategies exist to craft a business name that nails all these aspects.

Once you have a name, check trademark availability on the United States Patent and Trademark Office (USPTO) website to claim ownership throughout the U.S. 

Your last step when choosing a business name is ensuring it complies with Nebraska’s naming requirements.

Nebraska naming requirements:

Every U.S. state has specific business naming requirements; in Alabama, these include:

• Uniqueness: For LLCs, LLPs, and corporations, your potential name must be distinct from any others already registered with the Nebraska Secretary of State (SOS). You ensure that by checking availability using the SOS website’s Nebraska business name search tool.
• Entity titles: Limited Liability Companies (LLCs) and all other legal entities must use their titles or approved abbreviations (e.g., LLC, LLP, or Corp) as part of their business names.
• General restrictions: You can’t use specific terms too similar to government agencies, such as FDA, FBI, CIA, Alabama Police, or Treasury.

For further information, see how to start an LLC in Nebraska and ensure you comply with Nebraska’s naming requirements.

Business name reservation:

You can reserve your chosen business name for 12 months (costs $15) by filing an Application for Reservation of Name with the Nebraska SOS.

Using a DBA in Nebraska:

Non-legal entities like sole proprietorships, general partnerships, and legal entities like LLCs can register a Doing Business As (DBA) to trade using a brand name different from their own or registered business name by filing a Trade Name Application with the Nebraska Secretary of State (SOS).

Step# 4. Choose a business structure

Business structures (the entity you run your brand under) come in 2 forms, informal and formal:

• Informal entities: Informal structures like Sole Proprietors and General Partnerships are non-registered entities with minimal formalities.
• Formal Entities: Formal structures, like limited liability partnerships and limited liability companies (LLCs), are separate registered entities from their owners that provide liability protection and require specific legal compliances.

Every business structure has pros and cons that affect your legal responsibilities and tax obligations. The correct structure for your startup is the one that aligns with your business needs and goals. 

Let’s explore which suits you:

The most common types of business structures

• Sole proprietorship: An informal structure that requires no state filing, operated by a single individual who assumes all risks and liabilities and reports profits and losses on their tax return.
• General partnership: Like a sole proprietorship with 2 or more individuals sharing responsibilities and income. Payments can be equal or based on an internal partnership agreement.
• Limited liability partnership (LLP): A formal entity you register with the Nebraska Secretary of State that provides members separate liability protection.
• Limited liability company (LLC): The most popular business entity with SMB owners because of its ease of formation, liability protection, and flexibility with member ownership and tax reporting.
• Corporations: A corporation is a legal entity that individuals, shareholders, or stockholders create with the sole purpose of making a profit.

Tax advantages of each option

All the mentioned business entities use the pass-through tax structure, directing profits and losses to owners or shareholders, who report them on their tax returns (avoiding double taxation at a corporate level).

S corporations enjoy an extra tax advantage where shareholders can receive tax-free dividend payments and their taxable wages.

An LLC may offer additional tax advantages, read more about this in our guide.

Step# 5. Set up banking, credit cards, and accounting

Regardless of your business type, a dedicated business account and credit card can help streamline your bookkeeping by tracking your income and expenses. 

But there are other reasons your business might need them, especially if you form an LLC.

Business banking

Maintaining separation between business and personal finances is crucial for legal entities like LLCs and S corporations to uphold the corporate veil and keep liability protection.

But all business structures can benefit from a separate bank account as it simplifies their bookkeeping and projects a professional appearance to clients and vendors.  

You’ll need an Employer Identification Number (EIN) to open a business account in Nebraska.

Business credit card

When you start a business in Nebraska, a business credit card can help you in several ways:

1. Credit cards help separate your personal and business finances.
2. Convey a professional image.
3. Provide a credit line when you need it most.
4. Increase your business credit rating, which can reduce the cost of a business loan.

Business accounting

With accounting, size doesn’t matter because every business needs a system that tracks its income and expenses to ensure tax compliance, including payroll, local, state, and federal.

While you might need an accountant to file those taxes for your business, you can use accounting software that integrates with your new business and credit card accounts for your daily bookkeeping tasks.

Step# 6. Get funding for your Nebraska business

Most of us need funding to start a business in Nebraska, and many options are available.

But before you borrow, calculate your business running costs and profit margins to ensure you can afford the repayment terms because a lack of cash flow puts 82% of startups out of business. 

Your Nebraska funding options include:

• Bootstrapping: A self-funded approach using personal savings and current income to provide capital for your new business and reinvest profits to fuel its growth.
• Friends and family: Financing your business using friends and family loans can side-step high-interest rates; just ensure you keep those relationships by agreeing to a repayment plan.
• Small business loans: Many SMBs get small business loans to fund their startups or facilitate expansion from local banks, online lenders, or credit unions that provide the cash with strict repayment terms and interest rates.
• Crowdfunding: A modern funding solution where you raise interest-free and non-repayable capital from individuals who support your business idea through crowdfunding platforms.
• Business line of credit: A BLC is a predetermined cash amount where you pay interest on what you borrow and suits businesses with seasonal operations or those facing intermittent cash flow problems.

Nebraska grants and state incentives:

New and existing Nebraska business owners can access many state grants and funding incentives to help relocate, start, and grow their brands.

Grants are non-repayable cash amounts states and cities give to businesses that meet specific requirements. Incentives are often tax deductions to encourage growth after you open your business. 

Nebraska Grant and Incentive providers include:

• ImagiNE Nebraska Tax Incentive Program: ImagiNE Nebraska provides incentives to businesses of all sizes.
• Microenterprise Assistance Program: The MAP supports innovative technology in urban and rural areas to encourage job creation and growth throughout Nebraska.
• Site and Building Development Fund: The SBDF supports industrial areas by assisting in building acquisitions, construction, and renovation.
• Nebraska Department of Economic Development: Provides a comprehensive list of Nebraska’s incentive programs to help you expand or relocate your businesses.

Nebraska Small Business Administration (SBA):

The Small Business Administration (SBA) supports small business owners throughout the USA by supporting every part of their entrepreneurial journey, including SBA-backed loans with lower interest rates and longer repayment times than other lenders.

Step# 7. Get insured

Business insurance protects your company and private assets, shielding against unforeseen disasters like personal injury lawsuits or natural catastrophes. 

Common types of business insurance include:

• General liability insurance (GLI): Essential for brick-and-mortar and service businesses, GLI protects against workplace customer injuries or client property damage.
• Professional liability insurance (PLI): Geared towards professionals like accountants or financial advisors, PLI offers coverage against negligence claims, omissions, and errors.
• Business interruption insurance: Covers expenses and lost income when your business cannot operate because of natural disasters or illness.
• Commercial property insurance: Safeguards your workspace from expenses related to natural disasters, fire, and theft.
• Umbrella insurance: Offers additional coverage when other policies fall short, providing extra protection for unforeseen expenses.

Nebraska-Specific Regulations:

Workers’ compensation is mandatory for Nebraska employers with employees part or full-time, ensuring coverage for expenses related to employees’ work-related injuries.

Step# 8. Obtain Permits & Licenses

When you start a business in Nebraska, you might need federal, state, and local government permits and licenses to operate in your jurisdiction.

The permits and licenses you need depend on your niche, marketplace requirements, and locality.

Below are links to the federal, state, and local license and permit departments to determine which ones you need for your business:

• Federal licenses: For federal licenses and permits, visit the Small Business Administration (SBA) website.
• State licenses: Visit the Business Licensing page on the State of Nebraska’s website for state licenses.
• Local licenses: Requirements vary by county and may include permits for signage, health and safety, food permits, waste disposal, etc. Contact your local municipality or refer to your area’s official website for details.
• Professional and occupational licenses: Certain professions, like architects, accountants, lawyers, and doctors, must apply for a Professional Occupational license from the Professions & Occupations section of the Nebraska Department of Health and Human Services website.

Federal income tax and Nebraska local tax

All U.S. states have regulations businesses must follow; in Nebraska, those include:

• Tax registration: When starting a new business in Nebraska, you must register with the Nebraska Department of Revenue (DOR).
• Sales and use tax: If your business sells goods in Nebraska, you’ll need a sales tax permit from the Nebraska Department of Revenue (DOR).
• Employers tax: Nebraska employers must register with the DOR for employer withholding tax to comply with employee wage tax regulations.

Pro tip:

To register for sales tax and withholding tax, use Form 20, Nebraska Tax Application.

Step# 9. Find your team

Every innovative idea needs a team of skilled individuals to make it a business. 

Even if you’re a solo entrepreneur, finding people who can help you is imperative when starting a business in Nebraska. 

But depending on how you hire, you could incur Nebraska’s hiring and payroll regulations. 

Let’s look at both next:

People are the backbone of the business

Your employees are the face and heart of your business; some provide your service or customer care, while others run your online marketing strategy or tend to your quarterly tax returns.

So, you need a diverse team who can provide the skills you require to make your business tick. 

The easiest way to find your team without hiring multiple employees is to outsource professionals (like freelance content creators), hire a local tax accountant on retainer, or employ contractors on a project basis.

All 3 options have several advantages; you avoid the cost of hiring employees, benefit from their experience, and use them on a need-only basis. 

If you employ full or part-time in-house workers, adhere to the following correct hiring procedures:

• Registering for employee taxes with the IRS.
• Report any new (or re-hires) and private contractors to the Nebraska State Directory of New Hires.
• Register with the Nebraska Department of Revenue for withholding tax.
• And comply with Nebraska payroll regulations.

Some of these are below:

Comply with Nebraska payroll regulations

The Cornhusker state payroll regulations ensure employers treat employees fairly and follow state and federal rules.

• Minimum wage: The Nebraska state minimum wage is $10.50 per hour.
• Overtime pay: Employers must pay employees 1.5 times the regular wage for all hours worked over 40 a week.
• Genuine employee status: Employers can’t alter their employee’s status to a non-employee.
• Record maintenance: Employers must keep payroll records for at least 2 years.

Once you’ve got your team, use payroll software to track their work hours, issue paychecks, and streamline your Nebraska state and federal tax returns.

Set up payroll:

When you hire full/part-time employees or independent contractors, you must set up your payroll system to withhold payroll taxes, file your state and federal tax returns, and pay them.

To do so, you’ll need:

• An Employer Identification Number (EIN).
• A Nebraska Withholding Certificate and state I.D. number.
• Register with the Nebraska Department of Labor.

Hire contractors

Contractors provide skills many small business owners need but don’t have. And as they’re self-employed, you avoid the costs of employing staff! 

However, you must classify contractors correctly and verify their valid Nebraska contractor license.

Step# 10. Market & grow your business

We build memorable businesses around a brand that encompasses what it stands for and engages its audience’s emotions, using specific marketing techniques to gain their trust.

To achieve that, you need a brand identity that captures their imagination. 

Fortunately, several low-cost marketing strategies are available for new business owners on tight budgets. All they need is some innovative thinking, time, and patience. 

Consider making special offers to attract your first customers.

Your established competitors already have your target audience’s trust and attention. To claim your slice of the market pie, you need sales strategies that engage your prospect’s interest and motivate them to try your brand instead. 

One such strategy is special offers:

• Opening day sale: Encourage sales using one-off opening day discounts.
• Flash sales: Promote up-and-coming flash sales across your marketing platforms to create purchase urgency on specific dates.
• Multi-purchase discounts: Encourage repeat sales using promotions like buy-one-get-one half-price.
• Seasonal promotions: Everyone loves (or needs) a great deal throughout the year; you can take advantage of this by creating seasonal themes and promotions that maximize your sales.
• Online contests: Social media is a powerful way to engage your target audience, especially using contests and giveaways.
• Free shipping and returns: Remember to consider free shipping and returns because those costs are often the deciding factor for buyers looking for value.

Look for local businesses or brands to collaborate with

The quickest way to promote your brand and gain your target audience’s trust is to collaborate with an established business that serves the same audience while providing a complementary service or product.  

For example, a wedding planner could partner with a well-known wedding photographer, as both serve the same clients while offering different services (and gaining trust through association), increasing their chances of landing clients.

Invest in word of mouth (happy customers attract each other).

Word-of-mouth marketing (WOMM) is the most potent form of marketing because it involves real people (your customers) recommending your brand to others who trust their opinions. 

To encourage WOMM, you must invest in your customers’ satisfaction by putting them first and ensuring your service or product fulfills their needs.

Pay attention to online reviews; ask happy customers to review you

Reviews can make or break your business, which applies to brick-and-mortar brands as much as e-commerce.

Check these stats out:

• “Over 81% of consumers visit Google Reviews before visiting a business”. Source-Review Tracker.
• “74% of people say reviews increase their trust in a brand”. Source- Finances Online.

So, whether you sell on Amazon or run a coffee shop, ask your customers to review you at every opportunity and make it easy for them to do it.

Create unique, helpful content to showcase your activity

Everything your target audience sees or hears about your brand is content marketing, and its purpose is to convince them to buy from you, so it must send the right message.

Here’s how to create content that speaks your prospect’s language.

• Know your purpose: Content that connects has a purpose; whether you create it to increase brand awareness or drive sales, ensure you know your why before you publish.
• Choose the right content: The easiest way to create content your target audience wants is by reviewing your competitor’s content strategies on relevant marketing platforms.
• Make it community-engaging: Get people talking about your brand by joining the conversation on community forums and providing helpful answers.
• Give it away: Provide free, valuable content (like in your email opt-in offers) on every platform your target audience uses to establish that crucial trust factor.

And that’s how to start a business in Nebraska; now it’s time to open your doors and make your first sales.

Step# 11. Open the doors!

An excellent way to ensure people know you’re open and engage their interest is to throw a launch event.

And any type or size of business can do it.

For example, a new local butcher could throw a free community BBQ or a clothing boutique could host a fashion catwalk with complimentary prosecco and canopies.

Here’s how you can ensure its success:

Plan a successful launch event

Throwing a grand opening event is a great way to make a positive first impression with your community and target audience. 

Launch event 7-step plan:

1. Purpose: Design your event around what you want to achieve, whether creating community awareness, meeting possible brand collaborators, or just having fun. 
2. Venue: Use a venue that suits your event aim and your brand’s style to create a comfortable atmosphere. 
3. Promotion: Advertise your launch event everywhere your target guests can see it, including other related businesses, local media, and online. 
4. Activities: Make your event fun and exciting using interactive activities that engage people’s imagination so they remember the event (and your brand). 
5. Branding: Use various branded materials to familiarize guests with your business.
6. Opportunities: Use your launch event to learn more about your prospects and community and for them to learn about you. 
7. Moments: Capture your event with photography and video and promote it across your marketing platforms to increase brand awareness. 

Make your first sale

Your launch event is also an excellent opportunity to make your first sales and collect your future communities’ email addresses by offering special promotions.

Conclusion

And that’s how to start a business in Nebraska.

Sure, it may seem like a lot of work, but anything worth achieving is, right?

The key is taking your first step and building momentum as your business grows because optimizing a modest start is easier than trying to begin perfectly.

If needed, start small and get into the mix; odds are, you’ll learn loads and realize you don’t need to have everything figured out to start a successful business in Nebraska.

FAQ