How to start a business in Nebraska in 8 steps
Starting a small business in Nebraska can be a rewarding decision. Nebraska has a lot to offer small business owners, whether they’re launching a manufacturing business, an e-commerce venture, or anything in between.
However, any small business requires diligence and commitment to get started. Even if you’ve already put some business ideas in motion, this step-by-step guide will walk you through launching your Nebraska small business—from concept to opening day.
1) What type of business do you want to start?
The most successful businesses meet a need in the community, like providing food, service, or housing. But it isn’t always that simple—the type of business you start can be complex and involve companies outside the state or country.
Before you race around looking for office space, take the time to feel out the market and think about business development—what type of business do you want to start? You might look at what other local companies are doing well, talk with business owners, and narrow your choices.
For example, when putting together your business plan, ask yourself if your company will:
- Benefit from a storefront
- Require an office or warehouse building
- Run entirely online
- Have more than one employee
- Need management help to operate
- Benefit from outsourcing tasks
Launching a startup can be very stressful mentally, physically, and financially. Have an honest look at your goals and expectations—are they realistic? Can your savings sustain your business and your lifestyle, or will you need to take out loans?
If you’re still fired up about starting your business, move forward to the next steps of making your business official, tax-prepared, and logistically sound.
2) Set up your legal structure
Before you can make your business official, choose a business structure type. Carefully select your legal structure—it will impact decisions you make down the road, including how you process taxes and manage employees.
A sole proprietor is the default business type if you conduct business but do not register it. You alone have control of the company, and you and your business are the same entity for legal and tax purposes.
However, your personal assets can be held hostage for the company’s debts and legal repercussions.
Partnerships are similar to sole proprietorships in that the entity is made of its members. Like sole proprietorships, partnerships are not separate entities that can be taxed—the individual members pay income taxes.
You can choose between a limited partnership (LP) with unlimited liability or a limited liability partnership (LLP). LLPs offer some liability protection by separating personal assets from debts or obligations against the business.
Professional groups like attorneys or doctors often form an LP or LLP.
Limited Liability Company (LLC)
An LLC offers protection for both the business and its members against personal liability. For example, someone suing your LLC could not take your home or retirement accounts as part of the settlement or court award.
An LLC is a common choice for small businesses because of its simplicity and legal protections.
A corporation, such as an S Corporation, is a separate business entity for tax purposes, meaning the company pays its own income taxes by filing a separate tax return. The owners have limited personal liability from the debts and actions.
A board of directors typically manages the company and delegates day-to-day affairs to corporate officers.
A nonprofit isn’t a legal structure, but it is a distinct way of doing business. Typically, nonprofits benefit the public through charities, education, religion, literary, or scientific organizations.
The Official Nebraska Government Website has nonprofit business resources to help you get your business off the ground.
3) Name and register your business
Once you pick the appropriate small business structure that aligns with your plans, it is time to name the project. Landing on the right small business name is essential. It becomes your brand and company reputation, so choosing a name that will last is critical.
You might use your legal name for the business. Although, the Omaha Chamber of Commerce suggests that the best names describe what the company does.
Nebraska trade names
If you operate your business as a sole proprietor using your legal name, you could also register a trade name or "doing business as" (DBA) name.
For example, suppose you’re setting up a one-person consulting business. Of course, you can choose to go with your name, but you can also file for a DBA to name your business something like Acme Medical Consulting. Opting for a trade name now can offer more flexibility for your company down the line.
Business naming rules
Whichever option you choose, the state of Nebraska has a few rules for naming your business:
- Search the Nebraska Secretary of State site to choose a name not already in use
- A Nebraska LLC name must include “Limited Liability Company,” “limited company,” or an abbreviation like LLC, L.L.C., LC, or L.C.
- Corporations must include “corporation,” “incorporated,” “company,” or abbreviations, like Corp., Inc., Co., or Ltd.
- Stay away from words that could get mistaken for a government office or agency
If you’re forming a corporation or LLC, you must select a registered agent (RA). The RA is the point person for the state and any legal proceedings. You can change the RA at any time by filing with the Nebraska Secretary of State.
Reserve your business name
At last, you have selected your small business name! Next, you can file a name reservation form, along with a filing fee, with the Nebraska Secretary of State. It gives you some time to work out the business structure details without worrying that someone else will take your preferred name.
4) Apply for licenses and permits
Many businesses require licenses and permits to operate. For example, more regulated industries like food services, professional services, and banks may need specialized permits or business licenses.
Local and federal requirements
Depending on your business type, you may also need a:
Also, your business must receive a sales tax permit from the Nebraska Department of Revenue if your company will:
- Employ staff
- Sell retail items
- Rent or lease physical personal property
- Offer services subject to sales tax
Check with your local county clerk to discover information about local mandates. The Small Business Administration (SBA) is another resource—it has a guide to determine if you need a federal license or permit.
5) Choose a location
Owning a small business provides freedom to set your schedule and choose how and where you want to work. But don’t rush into choosing a location before you’re ready—the excitement of hanging a shingle for your business might make you overlook whether it makes sense to invest in a place just yet.
You may want to keep an eye out for retail spots, but hold off before sinking your savings into an office. If you overshoot your lease budget, you could encounter financial problems early on.
Many entrepreneurs start in their homes and transition to retail spaces or office buildings once cash flow is steady and exceeds overhead costs.
However, suppose your business hinges on having a storefront in Lincoln—such as if you’re opening a restaurant or retail store. In that case, consider the long game. You could start small in a good location and make plans to expand once you meet certain financial milestones or thresholds.
This is where it can help to have a good relationship with a real estate agent. Real estate agents can alert you when the ideal commercial property comes on the market so you can act on the opportunity.
6) Open a bank account and prepare for future taxes
As you prepare your business, consider opening a business bank account and setting up an accounting infrastructure. Doing it now requires more legwork, but it can save you time and money when tax season rolls around.
It’s typically a good idea to keep your personal and business transactions separate for tax purposes, and a different bank account for your business will allow you to do just that.
In the State of Nebraska, setting up a bank account and credit card for your company is straightforward—you’ll need your Federal Employer Identification Number, Articles of Organization or Articles of Incorporation, and a driver’s license to move forward.
Federal Employer Identification Number
Most Nebraska businesses find it helpful to apply for a Federal Employer Identification Number, also called an Employer Identification Number (EIN).
The Internal Revenue Service (IRS) can issue your tax ID number on the same day, and it’s handy for opening business bank accounts and credit cards, taking out loans, and filing business taxes. In addition, if you plan on hiring employees in the future, you need the EIN to process new hire paperwork.
However, suppose you are a sole proprietor who will not hire regular employees. In that case, you could use your Social Security Number for official documents.
Articles of Organization or Articles of Incorporation
The legal structure you choose for your business will determine if you need Articles of Incorporation or Articles of Organization (also called a Certificate of Organization). Articles of Incorporation are for companies that form a Nebraska corporation, while Articles of Organization are for LLCs. Visit Nebraska.gov for available forms for business registration.
7) Purchase business insurance
By now, you’re well on your way to business success! However, before you open your doors to the public, take a moment to recognize the risks you take when starting a business in Nebraska.
Some business structures require that you purchase Nebraska small business insurance, such as food and liquor service. But if you have a psychotherapy office, you may not think much about insurance, except whether you can accept it as patient payment.
But consider this: Suppose your patient trips on the carpet in your office and breaks their arm. They could file a lawsuit against your practice, and you could potentially lose your business or even your home.
That’s where small business insurance comes in—it can protect your business and personal assets from liability claims. Policies typically include:
- General liability insurance: A basic policy that protects you and your business from unforeseen events.
- Commercial property insurance: A policy that covers your company’s office building and its contents. It can reimburse you for building damage and destruction and pay to replace the items inside (inventory, computers, and furniture).
- Workers’ compensation insurance: A comprehensive policy that protects your business if an employee gets sick or injured on the job. Typically, workers' comp covers the employee's medical treatment and expenses, ongoing rehabilitation, and lost income.
Setting up small business and workers’ compensation insurance in Nebraska is as easy as pie with Huckleberry. We partner with entrepreneurs like you to explore your options and get you a personalized quote in about 5 minutes.
8) Create a marketing plan, hire employees, and more
Way to go! At this point, you have accomplished so much—you made your business official, set up financial accounts, prepared for taxes, and bought insurance to protect your interests. Your next steps will position your new business for growth and success in the coming months and years.
Most small business owners should create a marketing plan, secure a domain name, hire employees, and create company awareness through advertising. You might turn to social media, your website, signs in front of your business, and ribbon cuttings to help customers find you.
Pat yourself on the back—launching a small business in Nebraska is a magnificent accomplishment. While you’re on a roll, visit Huckleberry to review your small business insurance needs. Get a quote for general liability or workers’ comp insurance in less time than it takes to make a cup of coffee.