According to the most current data available, Kentucky has 317,115 small businesses. If you’re planning to join the bandwagon and start a small business in this Southeastern state, now is a great time to do it. Kentucky provides good opportunities for new businesses to start and flourish and the cost of doing business is good.
However, there are many important aspects to starting a business, and like any other state, Kentucky has its own regulations and rules to take into consideration.
In this article, we’re offering 6 tips that will help your start and run a successful business in the Bluegrass State.
1. Create a Business Plan
Before starting a business in any state, you will need to create a business plan. A well-crafted business plan is important for many reasons, such as managing cash flow and tracking your progress as your company grows.
Your business plan should include a unique selling proposition (USP), executive summary, your target market, marketing plan, sales forecast, etc.
2. Choose a Business Structure
Your next major task is going to be determining which business structure you want to form and register your business with the State of Kentucky.
An LLC (limited liability company) is the most popular option because it allows you to shelter your personal assets from business risk while at the same time benefiting from certain tax advantages.
Corporations are the structure typically chosen by big companies like Apple. You can choose from several types of corporations (B corporation, C corporation, S corporation, etc.). The upside of starting a corporation are potential tax benefits and personal liability protection.
3. Get Insurance
Regardless of your industry, insurance for small businesses in Kentucky is essential as it helps protect your business against events that can affect your bottom line. In order to operate a business with employees in Kentucky, you’re legally required to have workers’ compensation insurance. Other insurance policies to take into consideration include:
- Professional liability insurance, which pays for lawsuit costs and damages if a customer accuses you of negligence.
- General liability insurance, to help cover damages from claims of property damage or injury.
- Commercial car insurance, which helps pay for damages occurring in business-related car accidents.
4. Acquire Business Licenses and Permits
Depending on the nature of your business, you will require a number of different permits and licenses in order to be able to operate legally in the state of Kentucky.
Get in touch with your local chamber of commerce for local and municipal requirements in your area. The Kentucky One Stop Business Portal site is a great resource to check for state license requirements and tax registration, and the Small Business Administration site will provide the information you need about federal permits and licenses.
5. Open a Business Bank Account
Having a separate business credit card and business bank account is very important for protecting your personal assets.
When your business and personal accounts aren’t separated and someone sues your business, creditors will be able to go after your personal assets (your house, your car, and other valuable property). In business law, this is called ‘piercing or lifting the corporate veil’.
6. Build a Business Website
In today’s digitalized world, even the smallest and locally-oriented businesses need to have an online presence because the internet is the first point of contact with many customers. It not only serves as a source of important information about your business but is also a visual representation of your brand.
Your website doesn’t have to be fancy and expensive. If you can’t afford to hire a professional web designer, there are many online website builders that can help you build a decent website, such as GoDaddy, Weebly, and Squarespace.
The entire process of starting a business can seem quite overwhelming but if you break it down into steps and make sure to complete them one at a time, it can be fairly manageable. The tips offered in this article cover only some of the basics but they should give you a general idea of what you should expect.
Bear in mind that you don’t have to do it all alone. If it seems too complicated, you can visit the Kentucky Small Business Development Center (KSBDC) or look into the Kentucky chapter of the US Small Business Administration website.