Starting a Business

Developing, planning and licensing your business starts here.

Develop a Business Plan

1. What resources are available to help me with business plan development?

   The Resource Navigator is a FREE service that can get you connected to more than 400 organizations that are ready to help you build your business!

2. Is there a guide to assist me in starting a business in Kansas?

   Yes, a resource guide, Steps to Success (1.6 MB), is available to assist you in starting a business in Kansas.

3. How do I write a business plan?

   Although there is no single formula for developing a business plan, some elements are common to all business plans. Here you can learn how to write a business plan with detailed, step-by-step instructions.

4. What are essential elements to a good business plan?

   To become an expert, you must be willing to roll up your sleeves and begin digging through information. Since not all information that you gather will be relevant to the development of your business plan, it will help you to know what you are looking for before you get started. Here, you will learn the essential elements of a good business plan.

5. Are there sample business plans available?

   Get inspired with a gallery of 500+ business plans. Choose the category that is closest to your own business or industry, and find a plan you like. You can use it for reference in writing your own plan, or actually open it in Business Plan Pro software and edit it to match your business.

6. What different business structures exist?

   One of the first decisions a new business owner faces is choosing a structure for the business. Businesses range in size and complexity, from a self-employed plumber to a large corporation, and can be organized in a variety of ways.

7. What "Business Planning" workshops are in my area?

   Kansas offers many educational events to assist with the business plan development, taxes, government procurement and more.

8. What are some frequently asked questions?

   Thinking of starting a business in Kansas? The First Stop Clearinghouse is a central point of contact for entrepreneurs who are in the process of starting their own businesses. The professional staff will work with business owners in determining what local resources are available, what registrations are required, where to find potential funding, and what licensing/permits must be obtained. The following link includes some frequently asked questions.

Finance Your Business

1. Are personal savings/friends and relatives a good source?

   A key source of financing for your new business is your personal savings and assets. Even if you cannot entirely finance the business yourself, you must be willing to make a significant cash investment. Although you can tap into life insurance policies, home mortgages, individual retirement accounts, pension plans, and credit cards to finance your business, be sure you understand the risks associated with these options and incorporate a strategy to return these funds into your business plan. Consider that better alternatives might be available and explore your options thoroughly. Friends and relatives might be willing to invest in your business. Sometimes, they will loan you money interest free or at a low interest rate. To avoid misunderstandings, develop a written agreement describing any terms and conditions, including a payment schedule.

2. What type of assistance do banks offer?

   Many entrepreneurs turn to banks for financing and the U.S. Small Business Administration has several suggestions on how to approach this topic. The U.S. Small Business Administration provides information on how to select a bank for your business (48 KB) as well as small business-friendly banks.

3. How can the Small Business Administration assist?

   The U.S. Small Business Administration Community Express Loan Program provides financial assistance and technical assistance to the under served segment of the small business community. The program allows for loan applications of $5,000 to $250,000 with a seven-year term and provides for technical assistance for the borrower. Loan proceeds must be used exclusively for business-related purposes. A business plan must accompany the loan application, and the borrower must commit to ongoing technical assistance. Some lenders offer uncollateralized loans under this program. Details vary depending on the loan provider. For additional information, talk with your KSBDC consultant.

4. What assistance can the Kansas Certified Development Companies provide?

   Kansas Certified Development Companies assist businesses by developing loan packages that meet the financial need of a project. These packages often contain more than one source of project funding, thus providing the small business customer with the best combination of rates and terms possible.

5. How can StartUp Kansas help?

   The Kansas Center for Entrepreneurship StartUp Kansas Program provides seed capital to entrepreneurs who want to start or grow their business in a distressed or rural community. Applications must be submitted by a NetWork Kansas resource partner on behalf of the small business owner, and the resource partner must provide a match for the funds.

6. Should I consider venture capital and/or angel capital opportunities?

   Venture capital is money provided by professionals who invest pooled funds in young, rapidly growing companies with an established track record. Most venture capital investments come from institutional pension funds, endowments, foundations, banks, and other entities seeking to diversify their portfolio. Angel investors are usually wealthy individuals who invest in startups. For additional information about venture and angel capital, view these sites:

   Midwest Venture Alliance - The Midwest Venture Alliance invests in high-growth seed and early-stage technology companies. A typical criterion includes a market opportunity large enough to create a business with at least $30 million in annual revenue.

   Kansas Technology Enterprise Corporation - Kansas Technology Enterprise Corporation provides seed and early stage capital to Kansas entrepreneurs.

   Kansas Venture Capital, Inc. - Kansas Venture Capital, Inc. (KVCI) is a licensed small business investment company that provides equity financing primarily to small and middle market Midwestern companies demonstrating potential for substantial growth and long-term equity appreciation. KVCI’s primary focus is companies with over $5 million in revenue.

7. What type of loan and grant programs are available?

   There are several financing options to assist with small business development in Kansas.

   U.S. Department of Agriculture - The U.S. Department of Agriculture offers energy efficiency improvements grants, renewable energy systems grants, loan guarantee programs, and other options for small businesses.

   Federal Grant Resources - The U.S. Small Business Administration (SBA) provides a number of financial assistance programs for small businesses including 7(a), 504 and disaster assistance loans. Though the SBA does not provide grants to help you start a business, included is information on organizations and sites that can assist you in locating special purpose grants.

   Kansas Business Grant Sources - Kansas Business Grant Sources This grant source is a starting point for state and local units of government and other interested parties for researching grant opportunities online.

   Kansas Department of Commerce Programs - There are a variety of incentive and service programs for business development.

   Kansas Council on Developmental Disabilities - The Kansas Council on Developmental Disabilities is currently working on the Kansas State Plan for Developmental Disabilities for 2007 – 2011. The Council is required to develop five-year goals through data-driven strategic planning for advocacy, capacity building, and systemic change related to the areas of emphasis provided for in federal law.

   Kansas Association of Certified Development Companies - The Kansas Association of Certified Development Companies exists to promote and assist in the growth and development of small business concerns in the State of Kansas through its support of your local Certified Development Company.

   StartUp Kansas - StartUp Kansas promotes an entrepreneurial environment throughout the state of Kansas by establishing a central portal that connects entrepreneurs and small business owners with the right resources; expertise, education, and/or economic, at the right time.

Obtain Licenses and Permits

1. Do I need a Kansas business license and/or permit?

   Depending on the type of business you plan to start, you might be required to obtain a Kansas license or permit. NetWork Kansas will help you with this process. NetWork Kansas offers comprehensive information and guidance regarding the startup of a new business or expansion of an existing one.

2. Do I need a Kansas state tax identification number?

   If you operate a business that requires payment of Kansas tax, you must register with the Kansas Department of Revenue. You should register at least four weeks prior to your start date. Filings are available online.

3. Should I file my business with the state?

   Unless you establish your business as a sole proprietorship or a general partnership, you must register with the Kansas Secretary of State. Corporations must file Articles of Incorporation, LLCs must file Articles of Organization, and Limited Partnerships must file Certificates of Limited Partnership. Filings are available online.

4. What is the Kansas sales and compensating use tax?

   Compensating Use Tax is a tax paid on merchandise purchased from other states and used, stored, or consumed in Kansas on which no sales tax was paid. It is also due if the other state's rate is less than the Kansas rate of 5.3% paid at the time of purchase. The tax protects Kansas businesses from unfair competition from out-of-state retailers who sell goods either tax-free or at a lower tax rate. It also assures fairness to Kansans who purchase similar items in Kansas and pay Kansas sales tax. This use tax compensates for the lack of sales tax paid at the time of purchase. Use tax is due whether the property is shipped into Kansas or picked up in another state and brought back to Kansas. It applies only to tangible personal property, labor services are not subject to use tax. Like sales tax, compensating use tax is based on the total cost of the goods purchases, including postage, shipping, handling, or transportation charges.

5. What is an exemption certificate?

   An exemption certificate is a document that a buyer presents to a retailer to claim exemption from Kansas sales or use tax. It shows why sales tax was not charged on a retail sale of goods or taxable services. The buyer furnishes the exemption certificate and the seller keeps the certificate on file with other sales tax records.

6. Do I need to apply for county property tax?

   Anyone owning and/or leasing tangible personal property with the intent to establish a business (home occupations included), whether as an individual, corporation, or partnership, must file a Commercial Personal Property Assessment Form (68 KB) with their County Appraisal Office by March 15.

7. Do I need a Federal tax identification number/employer identification number (FEIN)?

   If you are a sole proprietorship with no employees and do not file excise or pension tax, you do not need a FEIN number. Instead, use your security number as the taxpayer identification number. Some banks request that you furnish a FEIN number for your business account, and you can apply for a number even if you are not required to obtain one. To obtain an FEIN, complete Form SS-4, Application for Employer Identification Number.

8. What agriculture-related licenses, forms, reports do I need to be aware of?

   In starting your business, it is critical that you apply for the appropriate agriculture-related permits, forms and reports.

   Meat and Poultry Inspection Program - The Meat and Poultry Inspection program licenses and inspects meat and poultry plants in a manner that is "equal to" federal inspection. It also responds to consumer food safety concerns involving meat or poultry products.

   Pesticide and Fertilizer Programs

   • Chemigation - The Kansas Chemigation Safety Law (KCSL) requires registering all water points of diversion (i.e.: (1) wells; (2) the point where the longitudinal axis of the dam crosses the center line of the stream; or (3) the location of the headgate or intake, in the case of a direct diversion from a river, stream or other watercourse) that will be used in the chemigation process.
   • Pesticide - It is important that you consider the following Pesticide forms and regulations associated with each of the following: Pesticide Applicator, Pesticide Business, Pesticide Dealer, Pesticide Product Registration.
   • Fertilizer - Ensure fertilizer products are properly labeled and safely stored. Safe storage preserves the integrity of the fertilizer product and helps prevent contamination of groundwater and surface water, and exposure to humans and animals. An accurate label guarantees that consumers, both urban and rural, have the information they need to choose the correct product and application amounts. In addition, there is regulation of the storage and transport of anhydrous ammonia and licensed individuals who blend fertilizer products.

   Feed and Seed Program - The Agricultural Commodities Assurance Program (ACAP) regulates the quality of feed, pet food and seed. Inspectors routinely visit feed mills, pet stores and other retail and wholesale outlets to verify that products are properly labeled and to collect samples to send to the Agricultural Laboratory for analysis. These inspections help ensure that consumers are receiving quality products.

   Dairy Program - The Dairy Inspection Program licenses and inspects dairies, milk haulers, milk bottlers, cheese makers and other milk or dairy processing facilities. They also inspect ice plants, and beer, wine and cider producers and bottlers.

   Food Safety and Lodging Program: Food Service - The Division of Food Safety and Lodging is responsible for food safety involving eggs and for inspections at grocery stores, restaurants in grocery stores, convenience stores, restaurants, schools, senior meal sites, mobile food units, lodging facilities, food wholesalers and warehouses, food processors and food manufacturers.

   Food Safety and Lodging Program: Lodging - Lodging facilities, including hotels, motels, boarding houses (bed and breakfast homes), lodges and rooming houses, are licensed, monitored and inspected to ensure that acceptable sanitation levels are maintained to minimize health and safety hazards that could lead to illness or injury.

   Plant Protection and Weed Control Program - Plant Protection and Weed Control staff work to ensure the health of the state’s native and cultivated plants by excluding or controlling destructive pests, diseases and weeds. Staff examine and analyze pest conditions in crop fields, rangelands, greenhouses and nurseries. Action taken to control potential infestations of new pests, whether they are insects, plants diseases or weeds, is beneficial to the economy and the environment. The program also issues the appropriate certificates for Kansas-grown commodities to be marketed nationally and internationally.

   Weights and Measures Program - The Weights and Measures Program is responsible for inspecting all kinds of commercial weighing and measuring devices involving scales used in grocery stores, grain elevators, livestock sale barns, pawn shops and other locations. They also inspect gas pumps and meters used to sell chemicals or to sell propane to home owners. They inspect packages containing edible and inedible products to ensure that the consumer receives the quantity stated on the label and verify that in-store scanners scan the correct price.

9. What type of water permits are available?

   In starting your business, it is critical that you apply for the appropriate water permits.

   Water Structures Program - The Water Structures Program regulates manmade activities affecting the flow and overflow of any stream by ensuring, within limits imposed by laws and courts, that such activities are properly planned, constructed, operated and maintained for their authorized purpose without adversely affecting the environment, public health and welfare, and public and private property.

   Water Appropriations Program - The Water Appropriation Program administers the Kansas Water Appropriation Act and rules and regulations pertaining to the management of water resources. This program issues permits to appropriate water, regulates water use and maintains records of all water rights in the state.

Identify Payroll Needs

1. Is an employers tax guide available?

   Yes, the publication supplements Publication 15 (Circular E), Employer's Tax Guide, and Publication 15-A, Employer's Supplemental Tax Guide. They contain information for employers on the employment tax treatment of fringe benefits.

2. What is the Fair Labor Standards Act?

   The Fair Labor Standards Act (FLSA), which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For non-agricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. The Act is administered by the Employment Standards Administration's Wage and Hour Division within the U.S. Department of Labor.

3. What is the Family Medical Leave Act?

   Covered employers must grant an eligible employee up to a total of 12 work weeks of unpaid leave during any 12-month period for one or more of the following reasons: for the birth and care of the newborn child of the employee; for placement with the employee of a son or daughter for adoption or foster care; to care for an immediate family member (spouse, child, or parent) with a serious health condition; or to take medical leave when the employee is unable to work because of a serious health condition.

4. What is the minimum wage?

   The Fair Labor Standards Act establishes minimum wage, overtime pay, record keeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.

5. Where can I find details on workers compensation?

   The national Web site provides workers compensation news and information for employees, employers, insurers, and medical providers. Use the research center, locate an insurance provider, get info on your state's program, and find professional help relating to workplace injuries and disabilities in the U.S.

6. What federal tax issues should I be aware of?

   General guidelines - For information about federal tax issues, visit the IRS Web site. Here, you will find the IRS Small Business Resource Guide CD. It is a helpful resource that contains all of the business tax forms, instructions and publications to successfully manage a business. In addition, the CD provides a wide variety of web links to various government agencies, business associations and IRS organizations. You can order the free CD from the IRS web site.

   Americans with Disabilities Act - The Americans with Disabilities Act is a 1990 federal law that forbids discrimination against persons who are disabled.

   ADA Guide for Small Businesses - This 15-page illustrated guide presents an overview of some basic ADA requirements for small businesses that provide goods and services to the public. It provides guidance on how to make their services accessible and how tax credits and deductions may be used to offset specific costs.

   United States Patent and Trademark Office - For over 200 years, the basic role of the United States Patent and Trademark Office (USPTO) has remained the same: to promote the progress of science and the useful arts by securing for limited times to inventors the exclusive right to their respective discoveries (Article 1, Section 8 of the United States Constitution). Under this system of protection, American industry has flourished. New products have been invented, new uses for old ones discovered, and employment opportunities created for millions of Americans. The strength and vitality of the U.S. economy depends directly on effective mechanisms that protect new ideas and investments in innovation and creativity. The continued demand for patents and trademarks underscores the ingenuity of American inventors and entrepreneurs. The USPTO is at the cutting edge of the nation’s technological progress and achievement.

Hire Employees

1. Where can I find the employee’s withholding allowance certificate?

   When you hire an employee, you must have the employee complete a Form W-4 (PDF), Employee's Withholding Allowance Certificate. Form W-4 tells you, as an employer, how many withholding allowances to use when you deduct Federal income tax from the employees' pay. Form W-4 includes detailed worksheets to help the employee figure his or her correct number of withholding allowances.

2. What is the Earned Income Tax Credit?

   The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate ncome working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

3. What details are available on employment eligibility verification?

   All U.S. employers are responsible for completion and retention of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. On the form, the employer must verify the employment eligibility and identity documents presented by the employee and record the document information on the Form I-9.

4. Is there a place to turn for assistance with fulfilling workforce demands?

   The Kansas Department of Commerce administers a workforce services system that links businesses, job seekers, and educational institutions to ensure that Kansas employers can find skilled workers.