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Last Updated on November 16, 2021

How to Start a Business in Wisconsin

Wisconsin is a beautiful place to live — and also a great place to do business! The state boasts one of the lowest sales tax rates in the nation, plus excellent access to SBA funding and venture capital. Wisconsin is also considered to be a state with good ease of doing business ratings. 

But how do you start a new company in Wisconsin? There are many important steps to consider. This guide will show you how to start a business in Wisconsin, from the initial planning stages through to the daily operations of your new business.

First and foremost, you’ll need to decide what kind of business you want to start. Chances are you already have something in mind, but if not, here are some things to consider:

  • What are you talented or naturally skilled at? Could this talent make you well suited to a certain type of business?
  • What business does your community need? Have you talked to people to find out?
  • What are you interested in? Can you combine any of your passions with a business idea?
  • Is this going to be a full time business, or more of a side hustle?

These are questions to ask yourself when deciding on a business idea. Once you have decided, move on to the next step.

Now it’s time to start planning. This means coming up with a business plan, naming your business, researching locations, and more. There’s a lot to cover here, so let’s break it down:

Select a business name

Now it’s time to name your business. And this is a step that you’ll want to take your time with — choosing a good business name is important! 

Ideally, you want to use a name that will be memorable for future customers/clients. And it should of course be relevant to your business type/your product. Beyond that, it’s up to you to come up with a clever name that is well suited to your new company.

It’s helpful to brainstorm many ideas and make a list of any you are considering. 

And remember: Wisconsin requires that newly registered business names be unique from other names already registered in the state. This means that if a name is already in use by another Wisconsin company, you cannot use that name for your own business entity. You can search the business entity database to confirm whether or not a name is available. 

In addition to choosing a unique name, you will need to follow the other Wisconsin business name rules, including: 

  • Names for LLCs need to contain “limited liability company”, or select approved abbreviations such as “LLC” or “L.L.C.”
  • Names for corporations need to contain “corporation”, “incorporated”, or select approved abbreviations such as “corp” or “inc”
  • The use of certain words or phrases is restricted, and the use of some financial terms requires written permission
  • Check the full rules here

Found the name you want to use and confirmed that it’s available? If you’re not quite ready to move on yet, you can reserve the business name for 120 days. This prevents another business from registering the name, buying you some time to think about it. 

Wisconsin trade names (DBAs)

Wisconsin does allow businesses to utilize “trade names”, otherwise known as DBAs/doing-business-as names. These are secondary names that can be registered once a business is already formed. Essentially, a trade name can also be used to legally do business with (which creates more flexibility in how you brand and market your company). 

Register a domain name

Once you choose a name, you should immediately register a domain name for your new business. In most cases, getting a .com domain name is ideal, but there are many other extensions (.biz, .net, etc.) that are worth considering. 

You can use a tool like Namechk to search for an available domain name and find a great deal on the registration cost. You may find that your desired names are taken, so you may need to get creative. 

Complete market research

Once you have an idea, you’ll want to do some market research. You want to gain a better understanding of who your customers – and competitors – are. You can achieve this by conducting online research, running focus groups, sending out surveys, and more. There are also companies that can help you complete market research, for a fee. 

Select a business location

Unless you plan to run a remote/virtual business, you will need to find a physical location for your company. Research commercial property in your area, and take note of typical costs. For customer-facing businesses (retail and some services), location is very important, so take your time in selecting the right area for your business. 

Create a business plan

You will now need to create a detailed business plan for your new venture. This plan is helpful for your own purposes, and will also be necessary in order to obtain funding from a bank. A good business plan should contain these elements:

  • Finances: How much funding does the business need to get started? How many sales does it need each month to break even on expenses?
  • Product: What do you plan to sell? Is it a product or a service? What problem does your business solve, and how is it distinct from your competitors?
  • Marketing: How will you drive sales? What marketing and sales efforts do you plan to employ? How much money will you set aside to fund marketing efforts?
  • Staff & partnerships: How many people will you need to hire, and what skill sets do they need to have? Will you have any partnerships or arrangements with other local businesses? 

If you need help, you can find business plan templates online that will help walk you through the steps you need to take to draft a detailed business plan. If you plan to seek funding, you may also wish to call your bank to see what they require in terms of business plans. 

Before you form your business as a legal entity, you will need to decide which business structure you will use. There are a few different types of businesses, each with its own pros and cons.

Sole proprietorship

Sole props are single-person operations. Examples include freelancers, gig economy workers, and consultants. A sole proprietorship business is very easy and inexpensive to form, and tax reporting is also fairly simple. As a sole proprietor, your business taxes are reported as part of your personal tax return.

The downsides to a sole prop are that you cannot hire employees, and you don’t have the legal liability shield that something like an LLC or corporation would provide. 100% of the debts and liability of a sole proprietorship go to the sole owner: you. 

Partnership

A general partnership is an unincorporated business structure similar to a sole proprietorship, except with two active owners/participants. Partnerships do not have liability protection. 

Limited Liability Company (LLC)

A limited liability company, or LLC, is a popular choice for business owners because it provides liability protection to the owners. It separates the business from the owners, which means the personal assets of owners will not be at risk if the company gets sued or goes into bankruptcy. 

LLCs are also a bit easier to form than corporations. Even so, there is definitely more work involved with an LLC than there is with a sole proprietorship. 

Corporation

A corporation is owned by its shareholders and is a separate entity. There are a few different types of corporations (C-corp, S-corp, etc), with the main differences being the way they are treated tax-wise. 

Corporations are more regulated than LLCs, which makes them more attractive to outside investors. For this reason, most large companies are corporations. The downside is that it takes more effort, and more paperwork, to form a corporation. 

Nonprofit

A nonprofit is a legal entity that is set up with charitable status, meaning that its goal is not to make a profit, but rather to address a certain cause. Nonprofits are funded by donations, rather than investors, and are subject to many regulations. They are exempt from most forms of taxation, although tax returns must still be filed. 

Now it’s time for you to formally register your new business entity (LLC, corporation, etc.). This process involves filing paperwork with the State of Wisconsin Department of Financial Institutions. The process can be done online or through the mail.

Alternatively, you can opt to use a paid business formation service. Companies like Northwest Registered Agent, ZenBusiness, and Incfile all serve entrepreneurs by helping them form new companies. 

Essentially, these services walk you through the entire formation process. They are like a middleman between you and the state. And they make the process much easier and quicker. 

If you opt to complete the steps on your own, the basic process includes:

  1. Naming your company
  2. Choosing a registered agent. This agent is tasked with receiving legal documents on behalf of the business. You can be your own agent, appoint an employee, or use a service
  3. Filing paperwork with the state
  4. Registering for state franchise and excise taxes 
  5. Obtaining business licenses and permits if necessary 
  6. Applying for an EIN from the IRS

The specifics do vary a bit, depending on what business entity structure you are choosing: 

Form a Wisconsin sole proprietorship

Follow these steps:

  1. Determine if you will operate under your own legal name, or use a trade name
  2. If you plan to use anything other than your legal name, you will need to register a trade name/DBA 
  3. Register with the Wisconsin Department of Revenue
  4. Apply for a business license and/or other necessary permits from local governments (city/county), as needed
  5. More information here

Form a Wisconsin LLC

Follow these steps:

  1. Name your new LLC (see notes above)
  2. Choose a WI Registered Agent (or use a service such as Northwest Registered Agent). Your Agent will receive legal documents and notice of lawsuits on behalf of the company.
  3. File the LLC Articles of Organization online or by mail, and pay the filing fee ($130 online, or $170 by mail)
  4. Draft an LLC operating agreement
  5. Apply for an EIN with the IRS

Form a Wisconsin corporation

Follow these steps:

  1. Decide on your desired corporate tax structure (S corp or C corp) 
  2. Name your new corporation 
  3. Choose a Registered Agent for your business (or use a service)
  4. Hold an organizational meeting and appoint directors
  5. File the Wisconsin Articles of Incorporation online or by mail, and pay the $100 filing fee
  6. Apply for an EIN from the IRS

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Registering your business and forming an LLC or corporation is an important part of starting your business – but in order to operate legally, you will likely also need to obtain certain permits and/or business licenses

The specifics vary depending on the type of business you are running, as well as your location. For example, restaurants will need health permits, bars will need liquor licenses, and medical service providers will need various professional licenses and federal permits. You will need to research the specifics that relate to your business type.

There are different requirements at each level of government:

At this time, you should also apply for an Employer Identification Number (EIN). An EIN is a federal tax ID that is required to hire employees. You can apply for an EIN online with the IRS – the application is free and quick. 

For most businesses, some startup funding will be necessary in order to get started. In step #2, you should have calculated your funding needs while drafting a business plan. Use this information to determine how much funding you need to raise.

For bootstrapped companies, you may be able to get by with your own personal savings, or some seed investments from friends and family. If your funding needs are small, this is likely your best route.

If your business plan indicates that substantial funding is needed, you will likely need to apply for a loan and/or a grant.

  • Small business loans are offered by banks, credit unions and other lenders. They can range from as little as a few thousand to hundreds of thousands. Specifics will depend on your business, as well as your personal creditworthiness. Most small business loans are issued in a lump sum, and paid back on a monthly basis, with interest.
  • Small business grants are offered by government agencies and some nonprofits. They are essentially business loans that don’t need to be paid back – but they usually have substantial fine print. It’s worth looking into, however, as there may be grants available, particularly for businesses serving an important social need, or for underprivileged entrepreneurs starting their first business. 

Beyond securing funding, there are other routine tasks that you need to take care of to get your business’ finances in order. This includes:

  • Opening a business checking account. You should have a separate business bank account that you use solely for business purposes. You can open this account at most banks, credit unions and financial institutions. Call ahead to see what documents will be required to open this account.
  • Open a business credit card or line of credit. This is not strictly necessary, but most businesses can benefit from having a business credit card, and/or a business line of credit. This can be used for day-to-day expenses and purchases, and may also earn you some rewards. 
  • Set up your accounting system. As a business owner, you will need to keep very detailed records about all revenue and expenses. To do this, you’ll want to set up the proper foundation from day one. This could be investing in an account software such as QuickBooks or Xero, hiring a bookkeeper, or at the very least establishing a spreadsheet to track everything. If you do not have any accounting experience, it’s wise to hire a professional to help. 
  • Purchase business insurance. Most businesses should have some form of liability insurance, and potentially other forms of business insurance as well. Insurance policies can help protect your equipment and buildings from costly damage, and help shield your company from liability if a worker or customer is injured or otherwise harmed. Speak with a local business insurance provider to get started. 

In this day and age, having a solid web presence for your business is very important. And social media profiles, while important, are no replacement for an actual website. You will want to build a professional business website that you can use to drum up business, inform your customers, and stay connected with your clientele. 

The simplest way to build a website is to use a website builder from a web hosting provider. When you register a new domain name, look for a provider that also offers web hosting and a site builder, so that you can purchase everything at once and get your site set up quickly. 

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To build a successful business, you’ll likely need to start by building a strong team to help. Of course, this may not be the case for solo operators — but for most companies, hiring employees will be necessary. 

Before you hire anyone, the federal government requires that you obtain an Employer Identification Number (EIN). You can apply for an EIN online in just a few minutes (and it is free to apply). You’ll also need to apply for federal employer tax accounts. 

Then there are state-level requirements from Wisconsin. You need to report new hires to the state of Wisconsin within 20 days of hiring them. And you’ll need to register for Wisconsin state employer taxes, including withholding tax and unemployment insurance tax

Finally, you will need to set up a payroll system or use a payroll service, to ensure that employees are paid on time and that taxes are calculated and withheld correctly. 

Now it’s time to get down to business and engage with the day-to-day activities that are sure to bring your business success. This means marketing your products and services, maintaining good relationships with your return customers, and setting yourself apart from the competition.

Still have questions about running a business in Wisconsin? Here are some answers to frequently asked questions.

What are some business resources in Wisconsin?

Entrepreneurs in Wisconsin have many useful resources at their disposal. A great place to start is the Wisconsin Small Business Development Center (SBDC). The WI SBDC offers a variety of free and low-cost resources to business owners, including free business coaching. 

Female entrepreneurs in Wisconsin may wish to look into the Wisconsin Women’s Business Initiative Corporation, while Milwaukie business owners can check with the Wisconsin SBA to connect to resources. 

What is the minimum wage in Wisconsin?

The Wisconsin minimum wage is $7.25 per hour, which is the same as the federal minimum wage set out in the Fair Labor Standards Act

There are a few exceptions:
Employees who earn tips may be paid as little as $2.33 per hour, as long as wages + tips equal at least $7.25 per hour total
Workers under age 20 may be paid $5.90 per hour for the first 90 calendar days of employment
Caddies and camp counselors have separate minimum wage rules; see here
 
Keep in mind that it is possible for cities or counties to establish their own minimum wage laws, which may exceed the Wisconsin minimum wage. Check with city/county officials to ensure that you are complying with all applicable labor laws in your area.

What business taxes does Wisconsin have?

Any business selling taxable goods or services in Wisconsin will be subject to the Wisconsin sales and use tax (5% on the state level, plus local sales tax). 

Companies with employees must register for and pay WI employer taxes, including withholding tax and unemployment insurance tax. And most businesses will be subject to corporation and partnership tax, among other reporting requirements. 

There may be other tax requirements depending on your business activities and industry. See the Wisconsin Department of Revenue website for more information. 

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