Start Your Business Today!

How to Start a Business in Arkansas

Arkansas is home to Fortune 500 companies like Tyson Foods, Walmart, and Windstream Holdings. Yet nearly a quarter-million small businesses employ 48% of the state’s workforce. It’s only natural that the Natural State could become the home of your business, too. Here’s your guide to starting a business in Arkansas.

However far you’ve come on your path to starting a business in Arkansas, it helps to have some guideposts along the way. From figuring out state franchise taxes to learning about public and private resources for entrepreneurs, the checklist below can help you navigate laying the foundation of your business.

Step 1: Create a business plan

Your Arkansas business begins with your business plan. Even a short business plan can clarify your business idea, how you’ll stand out in the market, and who your customers and competitors are. So, be sure to conduct market research into your industry.

Your business plan can also explore nitty-gritty details such as Arkansas state tax compliance or business incentives. If you’re a woman or minority, other state resources may be available, too, such as the Business First Visitation Program or other business education programs and workshops.

No matter where and how you start your Arkansas small business, your business plan can also help you think through how you’d like your business to grow. Do you need to hire employees, and, if so, how many? What services or tasks will you contract out? What potential problems could you plan for now?

Tracking and reviewing metrics can also help you understand the status and direction of your business. Set “SMART” goals that help you regularly review your business, and then adjust course where needed.

Tax breaks may lower your tax liability, such as for businesses operating in one of Arkansas’s 85 Opportunity Zones. Arkansas business grants may be available as well, but review state requirements for applicants requesting federal grants.

Need help creating a business plan for your Arkansas business? We put together a comprehensive library of articles and guides on business planning.

Step 2: Choose a business structure

The right business structure is the foundation on which you’ll build your Arkansas business. Startups often choose between a sole proprietorship or a limited liability company (LLC).

Sole Proprietorship

With no state documents to file or fees to pay, it can be easy and inexpensive to start a sole proprietorship in Arkansas. However, there may be other licensing requirements based on your type of business and location. The downside is that there’s no separation between your personal and business assets or liabilities. Financial or legal trouble in your business could quickly bleed into your personal finances.

Limited Liability Company

Starting an LLC may be slightly more involved. But the benefits of forming this type of official legal business entity can quickly outweigh the downsides. Furthermore, the time and cost to file documents and pay initial and annual fees are relatively quick and inexpensive. An LLC can also shield your personal assets from financial or legal trouble in the business. Your business taxes may be lower than a business structure like a corporation, too.


Corporations are popular for companies that want to issue stocks eventually, but they’re subject to “double taxation,” meaning that profits are taxed twice, at the business level and the individual owner (shareholder) level. Corporations also help keep the personal assets of their shareholders safe from the liabilities and debts of the company.

Other small businesses may wish to form nonprofits, general partnerships, limited partnerships, or S corporations.

Still not sure what business structure to choose for your business in Arkansas? Get 100% certain by reading this guide.

Step 3: Determine your business costs

According to Arkansas Online, Arkansas recently ranked eighth nationally for its overall business climate and costs of doing business, but there are still expenses. Arkansas’s overall low cost, however, can help you manage your overhead and cash flow as you grow your operations and stabilize your revenue and profits. Costs you may need to factor into your financials and business plan include:

Your business taxes may depend on factors such as location, industry, and gross receipts. As you plan your expenses, review any local, state, and federal taxes your business may owe. For example, Arkansas’s franchise taxes are due May 1, and changes to payments and rules go into effect for 2021.

State credits and incentives may help offset some of these costs, such as the Targeted Business Payroll, Income Tax Credit, and the Create Rebate Program.

Does math overwhelm you? That is okay! We’ll walk you through business cost calculation in this guide.

Step 4: Create a business name

Naming your Arkansas business is essential, but so is making sure your desired name is up for grabs. States have varying rules about business names. Arkansas requires names to be “distinguishable from other names on record.” In other words, if another business is already using the name you want, you may have to pick something else.

If you structure your business as an LLC in Arkansas, the official business name you file with the state will also need to include something along those lines in the name, such as “LLC” or “Limited Liability Company.”

As you brainstorm business names, check the Arkansas Secretary of State’s online business database to see if another company is using the name you want.

Once you’ve settled on a name, double-check that your preferred domain name and social media accounts are available, too.

Step 5: Register your Arkansas business, open a business bank account, and get business insurance

Once you’ve selected your business name, it’s time to take care of the other under-the-hood logistics that will have you ready to do business in Arkansas, such as:

  • Register your business structure (if required for your business entity) and file any paperwork required by the state of Arkansas — you can start this process from the Arkansas Secretary of State’s website or have a business formation service like ZenBusiness take care of it for you.
  • Apply to the Internal Revenue Service (IRS) for a federal employer identification number (EIN), which you’ll use for tasks such as filing taxes or opening a business bank account.
  • Review any other business license, zoning, code, permitting, and/or taxation requirements that might be relevant to your Arkansas business. Note: You can check with the Small Business Administration (SBA) for federal licensing requirements in your profession/industry. For state requirements, consult the Arkansas Professional Licensing page.

Business Insurance

Your business insurance needs will vary depending on factors such as your industry, scale, and location. Consider talking with a local insurance agent who can help you get the right coverage, such as general liability, product liability, professional liability, and/or commercial property insurance.

And, of course, don’t forget the money. Opening a business bank account separates your personal and business accounts — something that’s crucial to helping you keep accurate financial records and avoiding headaches if you ever get audited. Opening these accounts can also help you build your company’s credit and better track its financial health long-term.

Step 6: Market your Arkansas business

As you open your small business in Arkansas, how will you get customers?

For starters, set up a basic business website with the domain name you registered. The website can tell people about you and your company, what you do, and, above all, what problems you solve for the customer. Include a contact page so customers and prospects can get in touch.

Also, examine social networks such as Facebook, Pinterest, Instagram, and Twitter. What platforms do your customers use, and how can you engage with them there?

Don’t rule out print and broadcast marketing, either. With hundreds of newspapers and broadcast media, advertising with local Arkansas media can be a powerful way to get your company in front of your target customer quickly.

Examples of Good Businesses to Start in Arkansas

From foreign investment to technology innovation, Arkansas is attracting a diverse range of industries. Here are some ideas for small businesses to consider starting in Arkansas based on recently reported trends:

  • Poultry farming
  • Smartphone repair
  • Nature tours
  • Environmentally friendly cleaning services
  • Landscaping
  • Fitness or personal training

Visit our special report on profitable businesses to start for more ideas.

Wondering what business to start in Arkansas? Check out our list of best businesses to start in the state.

Starting Your Own Business in the Land of Opportunity

Arkansas wants more entrepreneurs to start businesses, and you could be one of those new business owners. From Bentonville to El Dorado, Little Rock to Fort Smith, there are low-risk, low-cost, and high-reward opportunities for the taking in the Natural State. With a solid business plan, an understanding of the state’s regulations, and hard work, you could be on your way to building a successful, profitable small business in Arkansas.

Do you have a viable business idea? Ready to start a business and become a business owner? Arkansas might be the place. Contact us today to see how we can help.

Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

Start Your Business in Arkansas FAQs

  • The costs will depend on factors like the type of business entity, what business licenses and permits you’ll need, and other factors. Check the Arkansas Secretary of State website for the latest filing fees.

  • Consider Arkadelphia, Conway, Fayetteville, Fort Smith, and North Little Rock for their business-friendly attitudes and proximity to big population centers.

  • Over 170 corporations base their operations in Arkansas.

  • The Arkansas Economic Development Commission provides incentives, resources, collaboration partners, and more to help new businesses grow in Arkansas.

  • Arkansas has a growing tech sector. Many public and private resources are available to drive innovation and investment in Arkansas, such as the Arkansas Small Business and Technology Development Center.

  • Arkansas has 85 Opportunity Zones throughout the state.

“This is your life.
You want to get it right.”

– Mark Cuban on Starting a Business

Entrepreneur and Shark Tank host lays out
3 steps to follow when starting a business

  • Form an LLC to protect your liability
  • Set up your banking and accounting
  • Grow sales by marketing your website

Play Video

Start a Business in Your State

Popular States for Starting a Small Business