- To start your business in Wisconsin, you will need a good business idea accompanied by a well-researched business plan.
- You will need to come up with a unique business name that is bound to leave an impression in the minds of your target customers.
- You will have to pick a business entity based on the needs of your business. You can choose from entities including sole proprietorship, LLC, and corporation.
- You will need formation documents and a federal Employer Identification Number or EIN if you wish to hire new employees or apply for specific permits.
- Conduct thorough research on the business setup-related laws and regulations in Wisconsin.
- Get your hands on the requisite licenses and permits to conduct business operations in the state of Wisconsin. A business bank account is also of extreme importance.
- Insurance is also crucial when it comes to running a successful business in the region of Wisconsin.
Wisconsin is home to a significant number of small businesses. In fact, 99% of Wisconsin companies are small businesses, as per the Small Business Administration (SBA). Meanwhile, half of Wisconsin employees are rendering their services for a small businesses.
A relatively business-friendly region, Wisconsin has become the go-to place for a ton of business enthusiasts. Suppose you are keen on starting a business in Wisconsin. In that case, you will be glad to know that their corporate tax rate is 7.9%, close to the US median and comparatively lower than the neighboring state of Illinois.
Are you interested in turning your business dreams into a reality in the state of Wisconsin, which harbors a favorable climate for tiny business enthusiasts? Then, dive in to check out our guide to help you navigate the business setup process!
Key Points to Remember for Starting a Business in Wisconsin
For any business to take off, you will first need to come up with a perfect business idea followed by a well-thought-out business plan. Other crucial aspects of launching your business in Wisconsin include the following:
- Deciding upon a business name.
- Picking the appropriate business entity.
- Acquiring a business license in Wisconsin, and so forth
Here is everything business enthusiasts need to know about starting a business in Wisconsin:
1. Carrying out Thorough Research for a Business Idea
A business's continued success greatly depends on how well thought-out the foundational concept is. Some great business ideas for entrepreneurs in Wisconsin usually involve launching a whole new product or service, while others aspire to improve upon existing business offerings.
As a new Wisconsin business owner, you will also need to carefully assess your target market, paying particular attention to customers whose needs aren't being fully quenched. You will also need to thoroughly study other successful businesses or competitors in your niche, analyze their strengths and weaknesses, and so forth. This initial market research will continue to come to your aid throughout the course of your business ownership.
2. Pick a Name for Your Wisconsin Business
A good business name will go a long way in improving the image of your brand. In addition to setting you apart from your competitors, it will also key in your customers regarding your company's product or service offerings, prices, and specialties, among other things. Here are the steps you need to follow in order to secure a name while starting a business in Wisconsin.
- Pick a Name to Set Yourself Apart from Competitors: A catchy and cool name is set to leave a good impression in a customer's mind. Things such as alliteration, rhymes, or even pop culture references can go a long way in boosting your brand image, unlike any other.
- Make sure of its originality and register your business name: Prior to recording the name of your business in Wisconsin, you must ensure that no other company has already chosen it for themselves. The Wisconsin Department of Financial Institutions boasts a Corporate Records Name Availability database that can help you out. When you are able to locate an unclaimed name, you can go ahead and reserve it for $15 with a Name Reservation Application submitted via mail.
- Include certain words in the company name: You will need to insert certain words in your company name. For example, Wisconsin LLCs are required to include the phrase "Limited Liability Company" or its abbreviations ("LLC" or "LLC ") alongside their official business names. On the other hand, Wisconsin business corporation names must include "Corporation," "Company," "Incorporated," or "Limited," or abbreviations of these words.
- Pay Heed to a DBA: Business entities often engage with customers under a name that is different from the legal standing of the business. For the uninitiated, this is referred to as a DBA or "doing business as." If you wish to register a DBA in Wisconsin, you will have to file for a trademark with the Wisconsin Department of Financial Institutions. The fee for trademark filing in Wisconsin is $15, and the registration lasts for ten years.
3. Devise a Business Plan
Most types of businesses, be they sole proprietorships or C corporations, need to possess a fail proof business plan which covers business objectives, projected growth, and pre-defined benchmarks, among other things.
In fact, several business plans also boast a financial plan that draws a balance between business costs and income. If you wish to avail of a business license in Wisconsin, you must make sure to create a unique yet well-rounded business plan. It would also be in your best interests to review the business plan from time to time for any changes.
4. Pick a Business Entity
Generally, any new business in Wisconsin will have to take a pick from one of three business structures which include - a sole proprietorship, a limited liability company (LLC), or a corporation.
Each of these aforementioned business entities comes equipped with its own set of advantages and pre-determined legal necessities. The Wisconsin Department of Revenue provides easy-to-use online resources, which has made it easy for up-and-coming entrepreneurs to launch a business in the region. Different business structures include:
- Sole proprietorship: Sole proprietorship is a type of informal business structure. In stark contrast to an LLC which serves as a separate entity, sole proprietorships serve as an extension of their owner. Are you wondering about how to start a business in Wisconsin in the form of a sole proprietorship? You will be glad to know that there is no prerequisite legal paperwork, and sole proprietors get to acquire all their business profits. A key disadvantage is that sole proprietors do not get to purchase the tax benefits and personal asset protections of an LLC or a corporation. In case the business gets sued, the owner will have to pay from their personal savings, which can put a start-up at a significant disadvantage.
- Limited liability company (LLC): A limited liability company (LLC) is a formal business structure that LLC members spearhead. The LLC business structure helps an entrepreneur to attain personal asset protection barring the double taxation of a corporation. LLCs confer personal liability protection upon their owners. If an LLC is sued, the owner's personal assets will not be at risk, which is not the case in a sole proprietorship. LLCs also serves as pass-through organization. This means that LLC profits and losses pass through to members, who in turn report the same to the Internal Revenue Service (IRS) on their personal tax returns.
- Corporation: A corporation is a legal business entity with shareholders at the helm of affairs. Just like LLCs, corporations draw a bridge between company assets and the personal assets of their owners, conferring due protection upon owners in case of bankruptcy or a lawsuit. Corporations are taxed at a corporate rate, not the individual income tax rate. The corporate excise tax is 7.9% in Wisconsin, which is relatively lower than the rate in the neighboring state of Illinois. Corporations boast a comparatively complex legal structure and demand more formalized accounting systems as compared to LLCs or sole proprietorships.
5. Obtain an EIN
If you plan on hiring employees to build a strong organization, you will have to apply for a federal employer identification number (EIN) with the IRS. The EIN functions as a business's national tax number. You use it in many business ownership scenarios, from establishing a business bank account to paying business taxes.
6. Acquire Business Licenses and Permits
The Wisconsin state government is well known for offering a convenient one-stop business portal wherein you can get your business licensed and permitted by the relevant agencies, including the Department of Workforce Development and the Department of Financial Institutions.
If you are running a foreign LLC or corporation that wasn't initially established in Wisconsin, you must first register with the state Department of Revenue.
Other additional licenses for conducting business in Wisconsin may be required depending on your profession. The Department of Safety and Professional Services also offers an interactive database that further connects you to licenses by the department.
7. Get Business Insurance
The state of Wisconsin necessitates two specific types of insurance for businesses - workers' compensation and vehicle insurance. In addition, company leaders often go for additional business insurance policies such as the likes of professional liability insurance, commercial property insurance, cyber liability insurance, unemployment insurance, and so forth.
8. Hire Employees
For any type of business in Wisconsin, unless you are opting for a solo-run business, it is imperative that you build a strong team comprising talented and hard-working employees. Additionally, you must comply with the hiring process's legal framework. Finally, once you have hired the perfect group of employees, you must use a payroll service to generate paychecks, track time, and make the tax season more hassle-free.
Wisconsin is known for being a relatively business-friendly region if you are equipped with a good business idea and a well-rounded plan. Starting a new business in Wisconsin becomes easy when you are supported and backed by experts. However, if you are keen on bringing your dreams to fruition, our short and simple guide can come to your aid!
What are the costs of starting and maintaining an LLC in Wisconsin?
If you are keen on starting a Wisconsin LLC, you will need to pay $130 to file your Articles of Organization online or $170 by mail. A foreign LLC requires an initial fee of $100. Wisconsin corporations mandate Articles of Incorporation, which come with a cost of $100 to file via both online means as well as by mail. In addition, Wisconsin LLCs and corporations must file annual reports containing the most up-to-date information about the company. These yearly filings need to be done online and come with a fee. The cost is $25 for Wisconsin-based companies and $65 (or more) for foreign companies first established out of state.
Is Wisconsin a good place to start a business?
Wisconsin is a reasonably attractive place to launch your new small business. Over 99% of the companies in the state qualify as small businesses, and half of Wisconsinites are involved or employed in these small businesses. Taxes and home prices as compared to the neighboring region of Illinois.
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