Wisconsin has had a growing economy for the last decade, making it attractive for new businesses. Small business makes up more than 99% of all companies here per 2019 numbers, and that’s even with large companies like Kohl’s, Menards, and Harley Davidson calling the Badger State home.
Finding the right place to start your business is just the start. Once you’ve decided to open your business in Wisconsin, there are a few steps to stay compliant and start earning revenue. You can create a company here in just a few days, but it’s essential to take the time necessary to prepare properly.
Let’s dive into how to start a business in Wisconsin with this quick guide.
Benefits of Opening a Business in Wisconsin
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 your business. Many companies take advantage of Wisconsin’s abundant lumber, soil, and waterways.
Some call Wisconsin the cheese state because the dairy industry brings more than $20 billion annually here. 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.
1. Create a Business Plan for Your Wisconsin Business
Before you can bring in your first dollar, you 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 get started. As a bonus, creating a business plan will also make you more attractive to investors.
Consider the following for your business plan:
- A clear description of your Wisconsin business idea.
- Your target customer. Will they be upscale restaurant guests in Milwaukee or hunters in Buffalo County?
- What makes your business unique?
- What are your potential problems, and how will you overcome them?
- Estimated business financials for a minimum of three years, including the costs needed to launch your business.
- Your sales and marketing plan, which will show where you’ll reach your customers. In Wisconsin, that could mean you have a variety of sales plans that target anything from urban millennials to suburban families to vacationers at Wisconsin Dells.
- Your plan to finance your business for the first 6–12 months.
2. LLC vs. Sole Proprietorship: Choosing a Business Structure
Every business operating in Wisconsin must register with the state and choose a business structure. You can select various business types such as a corporation, sole proprietor, or limited liability company (LLC). Corporations can be complicated and expensive to maintain. Most small businesses choose between a sole proprietorship or an LLC.
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. An LLC provides an extra layer of protection for business owners, shielding personal assets regardless of what happens with your business.
Choosing an LLC could also give you specific tax breaks. When you register your business 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. Additionally, using a partner like ZenBusiness makes it easy and affordable to form your LLC in Wisconsin.
3. Determine Your Wisconsin Business Costs
You’ll greatly benefit from researching how much it’ll cost both to start your business and to operate each month. There’s no sense in buying equipment if you can’t afford to rent the month after you open. Knowing your business costs could also help you pick the right city in Wisconsin as you get your business off the ground.
When calculating your total business 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 you grow.
One cost 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 LLC may owe from day one.
4: Create a Business Name in Wisconsin
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 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 a name could be 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.
Second, check if a well-known national business already has your name, regardless of your home state. That 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.
5. Register Your Business and Open Financial Accounts
Once you’ve reserved your business name, you can officially register to do business legally throughout Wisconsin. You can do this through the state’s business portal. But first, 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.
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 legal ins and outs of small businesses, but ZenBusiness 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, get any business licenses you need, and obtain the necessary 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.
6. Market Your Business in Wisconsin
Now that you can legally do business in Wisconsin, you need to start executing your sales and marketing plan. 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 referral business is typically the best source 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 do more research on your market.
Examples of Good Businesses to Start in Wisconsin
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.
- Retail stores
- Real estate investment firm
- Business services, such as accounting or tax filing
- Staffing company
- Real estate photography
- Resort or bed and breakfast
- Business-to-business training
- Anything in the agriculture or forestry industries
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, and tick all the boxes for registering accounts and filing paperwork, and you’ll be well on your way to turning profits in the Badger State.
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