Business Startup Walkthrough
This below is for information only. You are responsible for reviewing and using this information appropriately. This content doesn’t contain and isn’t meant to provide legal, tax, or business advice. Requirements are updated frequently and you should make sure to do your own research and reach out to professional legal, tax, and business advisers, as needed. Businesses outside of Nebraska will have different steps and requirements.
Nebraska, with its growing economy, has much to offer budding entrepreneurs. The state ranks among the most business-friendly in the nation and boasts an array of tax incentive programs, a high quality of life, a growing job market, and low real estate prices. With a relatively small population, Nebraska presents excellent opportunities to carve out a competitive niche. Here’s how to start a business in Nebraska in eight steps.
1. Choose a Business Idea
The first step toward building your Nebraska business is settling on a viable business idea. A solid concept lays the foundation for your business. You may want to sell a product, service, or combination. You might improve an existing offering or come up with something entirely new. Regardless, ask yourself the two following questions before pursuing your project:
- Who is your customer? Knowing what you want to sell isn’t much use if you don’t know who you’ll be selling to. Identify your target customer. Analyze businesses and marketplaces where similar products or services are sold (like Amazon or Wayfair), and research industry trends. Will you sell directly to consumers (B2C) or business-to-business (B2B)? Online or through a traditional storefront?
- What is your projected profitability? Any business must turn a profit to survive—small businesses in Nebraska are no exception. Several elements can affect your profitability, including pricing, packaging, distribution and bundling models. Will you offer subscription services? What is your break-even point—i.e., how much do you have to sell to cover your costs?
2. Name Your Business
Once you’ve settled on a business idea, choose a name. Coming up with a catchy and memorable name is a critical decision you’ll make as a small business owner. A good name conveys your company’s purpose and attracts the right clientele. Consider the following guidelines for picking a business name in Nebraska:
- Be original. Your Nebraska business name must be different from any other business registered in the state. Search the Nebraska Secretary of State’s website to see if your preferred name is available.
- Include certain words. Nebraska LLC names must contain the word “Limited Liability Company,” “Limited Company,” “L.L.C.,” “LLC,” “L.C.,” or “LC.” Nebraska corporation names must contain the “Corporation,” “Incorporated,” “Company,” “Limited,” or an abbreviation thereof.
- Exclude certain terms. Your Nebraska business name cannot contain words that may confuse it with a legitimate government agency, like the FBI or Nebraska State Police. Nor can the name imply an illegal business purpose—like “Stolen Car Parts Resellers Inc.”
- Reserve your name. Name reservations in Nebraska must be submitted in writing and, if approved by the Nebraska Secretary of State, remain in effect for 120 days. There’s a $30 filing fee for reserving a corporate or LLC name.
- Adopt a DBA. If you want to operate under a different name than the business entity you registered with the state, file for a DBA or “doing business as”—sometimes called a trade name or assumed name. To adopt a DBA in Nebraska, file an Application for Registration of Trade Name. It costs $110 to apply by mail or in person or $100 to file online.
- Secure a domain name and social media handles. Potential customers should be able to find you online easily. When deciding on a business name, check to see if a relevant domain name (URL) is available, then reserve social media usernames that align with your business name or DBA.
3. Create a Business Plan
Every small business owner, in Nebraska or elsewhere, needs a business plan. Your business plan should reflect your overall goals and give potential investors a sense of how you intend to run the company in the near and long term. A good business plan contains the following:
- An executive summary and mission statement
- A detailed company description
- A market analysis
- Your organizational structure
- A list of products or services
- A customer segmentation report
- A marketing plan
- A logistics and operations plan
- A financial plan
You can craft your plan using a free business plan template tailored to meet your needs, or consult business plan examples for inspiration. Below are a few examples fo completed business plans. Feel free to download and use as assistance where necessary. Want a little more assistance? Be sure to sign up for out next Business Plan: Snap & Boost session where we will build your business plan together. Register today!
4. Choose a Formal Business Structure and Get Started
Before formally registering your business in Nebraska, decide what legal structure it will take. There are four primary types available to business owners in Nebraska: sole proprietorships, general partnerships, LLCs, and corporations. Each offers different benefits for personal liability, ownership, taxation, and funding. Here’s how they differ:
- Sole proprietorship. Sole proprietorships are owned and run by a single individual. They are the default designation for individual-run businesses in the US. There’s no legal distinction between the proprietor and the business. Both are taxed as “pass-through” entities, meaning earnings are assessed once at the proprietor’s personal-income tax level. The owner is personally liable for most debts or legal damages incurred by the business. Sole proprietorships and partnerships pay self-employment state taxes (15.3% in Nebraska). There are no fees or registration requirements to set up a sole proprietorship.
- General partnership. General partnerships are formed by two or more partners and are taxed similarly to sole proprietorships. Like sole proprietors, there’s no legal distinction between a general partner and their business.
- LLC. A limited liability company (LLC) is formed by one or more owners, known as “members” Like partnerships and sole proprietorships, LLCs can elect to be taxed as “pass-through” entities—i.e., taxed once at members’ personal-income levels. LLCs differ from sole proprietorships and partnerships in that they enjoy liability protection, because the LLC is considered a separate legal entity from its members. This added layer of protection makes LLCs a bit more complex and costly to set up.
- Corporation. A corporation is a separate legal business entity from its ownership ranks, meaning owners’ personal assets are protected in case the company goes bankrupt or faces a lawsuit. Corporations can issue stocks to shareholders for an ownership stake in the business. Corporations are subject to corporate taxation, meaning the government taxes business income and the personal income of owners and shareholders. Nebraska corporations must file corporate income tax returns with the state.
Obtaining a federal employer identification number (EIN)
Once you’ve decided on a structure for your Nebraska business, apply for a federal employer identification number (EIN) through the Internal Revenue Service (IRS) website, free of charge. An EIN is a nine-digit number assigned to businesses by the IRS for tracking tax obligations—like a Social Security number, but for companies. An EIN also helps secure credit accounts for business expenses.
Incorporating in Nebraska
To formally launch your business in Nebraska, you may have to pay fees and file specific documents with the Secretary of State’s office. (Some structures, like sole proprietorships and general partnerships, don’t need to go through this formality.) Here’s how to incorporate in Nebraska:
- LLCs. File your Certificate of Organization with the Secretary of State’s office online, by mail, or in person. There’s a $100 filing fee for online processing and a $110 filing fee for mail or in-person service.
- Corporations. File Articles of Incorporation and Domestication with the Secretary of State’s office online, by mail, or in person. The fee for online processing is $100, and $110 for mail or in-person service.
Consider opening a business bank account. It’s not required, but the IRS recommends that all small business owners maintain business bank accounts separate from their personal assets.
5. Obtain Business Licenses and Permits
While Nebraska doesn’t require a general, statewide business license, businesses that sell products or services are subject to sales tax and must register for a sales tax permit with the Nebraska Department of Revenue. Your business may also have to obtain specific licenses if it deals in particular trades, such as selling cigarettes, tobacco products, or motor fuels.
6. Examine Business Insurance Options in Nebraska
Unforeseen losses can be catastrophic for new businesses. While some business structures like corporations and LLCs offer degrees of personal asset protection, you may still want to purchase business insurance to cover your products, vehicles, and other property from unpredictable events. Standard insurance plans for Nebraska businesses include:
- Workers’ compensation insurance. Nebraska law requires all businesses with one or more employees to carry workers’ comp (companies with independent contractors are exempt). This policy covers injuries and illnesses employees may suffer on the job.
- General liability insurance. General liability insurance covers some financial losses (like no-fault property damage) and injuries like a customer slip-and-fall. While Nebraska law does not require this policy, you may need it to rent an office or storefront.
- Professional liability insurance. Professional liability insurance—i.e., errors and omissions insurance—covers financial losses from malpractice suits claiming that advice or high-competency services caused harm. For example, a real estate agent who fails to note mold in a basement can be liable for damages.
- Business owner’s policy. A business owner’s policy (BOP) is a small business insurance package deal. The specifics vary based on your company’s needs and your insurance company’s offerings.
The federal Small Business Administration maintains a list of more insurance policies your new Nebraska business may need.
7. Understand Financial Considerations
In addition to purchasing insurance, you’ll likely have to make other investments to get your Nebraska business off the ground. These include renting brick-and-mortar retail space, setting up a professionally designed business website, and purchasing ads, equipment, and software. You may also want to hire lawyers, accountants, and other professionals to support your endeavors.
8. Market Your Business
Crafting a good marketing strategy is essential for getting the word out about your new Nebraska business. Your marketing plan might include several of these critical elements:
- Market research. Thorough market research is critical to understanding your target market and can give you a better sense of how to stand out in the Nebraska business landscape.
- Advertising. Design and look for free or purchase print or digital ads—or hire an agency to do it on your behalf.
- Social media. Every successful business must maintain a solid social media presence on platforms like Facebook, Instagram, YouTube, and TikTok—especially if you want to appeal to younger audiences. Consistently publish content that aligns with your brand to up customer engagement.
- Public relations. Identify and cultivate relationships with media outlets—both in Nebraska and across the U.S.—to increase your visibility organically.
- Customer retention. Build genuine relationships with customers that keep them returning to your business—and spread the word to friends, family, and colleagues.