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Wisconsin is known for its growing economy and business-friendly climate, making it attractive for new businesses and entrepreneurs with a good business idea. Small businesses make up a vast majority of all companies in the state, and that’s even with large companies like Kohl’s and Harley Davidson calling the Badger State home.
Finding the right place to start your business is the first step from becoming an entrepreneur to a business owner. Once you’ve decided to open your small business in, there are a few steps to stay compliant and start earning revenue.
Let’s dive into how to start a business in Wisconsin with our quick and easy-to-follow guide.
Wisconsin’s best features are its wealth of natural resources and its population of well-educated and happy employees. The state has modernized rapidly, offering plenty of urban opportunities to start and build a business. Many companies take advantage of Wisconsin’s abundant lumber, soil, and waterways.
Some call Wisconsin the “cheese state” because the dairy industry brings in more than $20 billion annually. It’s also continually ranked in the top 15 states nationwide for health care and education, which creates an influx of promising employees and makes it a great state to raise a family.
If you’re an entrepreneur with a great business idea looking to become a small business owner in Wisconsin, then the prospect of doing a lot of research and paperwork might seem overwhelming. Our guide simplifies the process, allowing you to get through it without having to pull your hair out in frustration.
Here’s a list of what you need to do.
Before you can bring in your first dollar, you’ll need a business plan. Taking the time to write a plan will help you understand all the opportunities and hazards you may face — which is beneficial to have on hand as you begin. As a bonus, creating a business plan will also make you more attractive to investors.
Your business plan should be as detailed as possible. If you aren’t sure what to include, here are some suggestions:
Check out our guide for more information on writing a business plan.
Every business operating in Wisconsin must register with the state and choose a business structure. You can select any business entity you want, such as a corporation, sole proprietor, or limited liability company (LLC).
There are two types of corporations: a C corporation and an S corporation. A corporation is recognized as a C corporation by default. It’s also known as a “pass-through” business entity, meaning that when it comes to taxes, it’s taxed at the corporate level and personal level for the shareholders.
An S corporation is more of a designation for tax purposes than a business structure. It avoids the double taxation seen in C corporations and, instead, allows shareholders to report the company’s income and losses on their own personal tax returns. They can also offer more limited liability. The downside is that earning an S corporation title is quite difficult.
Most small businesses choose between a sole proprietorship or a limited liability company as a business structure. While choosing a sole proprietorship saves time and money in some states, it doesn’t hold much in Wisconsin since even sole proprietorships have to register here.
As a business entity, a limited liability company provides an extra layer of protection for business owners, shielding personal assets regardless of what happens with your business. For example, if the business gets sued, the owner’s personal assets won’t be in jeopardy.
Choosing an LLC as a business entity could also give you specific tax breaks. When you register as an LLC, you get the option of being taxed as a corporation or passing all income through to your tax return. The flexibility of choosing what’s best for your situation is a nice benefit.
You’ll greatly benefit from researching how much it’ll cost both to start your business and to operate it each month. There’s no sense in buying equipment if you can’t afford to rent the month after you open. Knowing your costs could also help you pick the right city in Wisconsin as you get your business off the ground.
When calculating your total costs, it’s smart to factor in operating expenses for at least six months, with the assumption that you’ll have zero sales. This is a safe estimate that helps provide a financial cushion for small business owners as they grow.
One cost that’s essential to understand, and that often comes back to bite business owners later, is taxes. Ensure you understand the various state tax rates before you start selling, so you can factor in what your Wisconsin business may owe from day one.
It’s essential to create a business name that’s easy for your target customers to understand, regardless of your industry or business type. Having a business name that immediately resonates is a bonus. This could help you attract customers you aren’t actively selling or marketing to, saving a lot of money down the line.
Another vital thing to keep in mind when creating a business name is to make sure it’s available. There are two ways to check if a name is taken by someone else. The first is to see if it’s already reserved by searching through the Wisconsin business registration portal. You can’t legally do business under the same name as a company that owns the right to that name in the state. If you need assistance with a business name, we can help.
Check if a well-known national business already has your name, regardless of your home state. If it’s taken, it will make it tough to create an online presence. It’s smart to choose a new name with a readily available domain. This helps provide liability protection from other businesses. We can help you register a domain name.
Once you’ve reserved your business name, you can officially register to do business legally in Wisconsin. You can do this through the state’s business portal.
You’ll need to file for a federal employer identification number (EIN) from the IRS, though this isn’t required for sole proprietors who don’t plan to hire employees. If you’re running a sole prop, you can just use your social security number as your federal tax ID, though this opens you up to potential identity theft. An EIN can also help you get a business bank account with many trusted financial institutions. We’ll go into this more below.
Make sure you’ve also created your articles of organization and/or business operating agreement. This process may seem daunting if you’re not familiar with the legalities of small businesses, but we can take the steps on your behalf. Having an experienced partner can give you peace of mind and free you up for more business-critical tasks.
Once you’re officially registered, you can open a business bank account with many financial institutions, get any business licenses you need, and obtain necessary business insurance. To sell anything in Wisconsin, you’ll need a seller’s permit.
You’ll also likely want general liability insurance to protect your company further. And if you hire employees, you’ll need worker’s compensation insurance.
Now that you can legally do business in Wisconsin, you’ll need to start executing your sales and marketing plan. This is where you’ll need to conduct market research.
Most businesses need both an online and offline marketing strategy. For the online part, you’ll need an online presence via social media and a website.
Companies in industries such as business services or eCommerce may find this more important than others, but in today’s business climate, every business needs a website from day one.
Wisconsin is also a great state to create print ads and other materials to build brand recognition. This is especially true in the urban cities of Milwaukee and Green Bay. Word of mouth and business referrals are typically the best sources of new customers, regardless of industry, without any upfront costs.
The most important thing is to get as much attention from customers as you can as fast as possible. Your industry and where your target customers hang out will guide your marketing strategy. Check out Wisconsin’s Small Business Development Center resources to conduct market research.
Wisconsin is pretty diverse with urban and rural areas, which creates a broad set of business types that can be successful throughout the state. Below you’ll find a list of ideas that can work well in the state to get your creative juices flowing:
Don’t let this list confine your creativity. Instead, search for a business that makes use of your skills and abilities.
Starting a business in Wisconsin isn’t overly complicated, but there are a few specific steps to take before you start. Create a plan, choose a business type, tick all the boxes for registering accounts and filing paperwork, and you’ll be well on your way to turning profits.