To outsiders, Wisconsin is the home of cheese, beer, and lumber—and they do all three of those things really well. But true Wisconsinites also know that the state is a mecca for entrepreneurs.
Small businesses represent 99.4% of all businesses operating in this midwestern stage, employing 1.3 million Wisconsinites. That’s a whopping 50% of the state’s private workforce.
Do you want to add your service company to the long line of small business success stories in Wisconsin? Follow this guide to learn how to start a business in Wisconsin in 12 key steps.
How to start a business in Wisconsin
- Start with a business plan
- Choose a business name
- Check zoning requirements
- Choose a business structure
- Register your business
- Open a business bank account
- Secure small business funding
- Arrange permits and licenses
- Insure your business
- Invest in business software
- Understand your tax obligations
- Build your team
1. Create a business plan
Writing a business plan can feel like hassle when all you want to do is dive into growing your company. But, failing to plan is planning to fail. Without sitting down and clearly mapping out your business strategy, costs, goals, competition, and growth plan, you’re setting yourself up for hiccups and missed opportunities in the future.
The best business plans help you:
- Calculate your startup costs and ongoing expenses
- Clearly define business goals
- Define your competition and opportunities
- Crystalize your unique selling proposition (USP)
- Develop a growth strategy
- Identify and profile potential customers
- Create a basic marketing plan
- Identify additional revenue streams
- Secure funding and/or attract investments
Creating a strong business plan is relatively straightforward. We recommend using the business plan template from the Small Business Association (SBA) to help guide you through the process.
2. Choose a business name
In Wisconsin, sole proprietorships can operate using the same legal name as the business owner. General partnerships must include the surname for all partners, and LLCs and corporations must have unique names that comply with Wisconsin’s business naming requirements.
The process for registering your business name in Wisconsin will vary depending on your business structure.
For sole proprietors, the process is:
- Search the Wisconsin Department of Financial Institutions Business Name Database to determine if your business name is available If it is, head to the County Register of Deeds Office in your county to file and submit a registration of firm names. The filing fee is $30.
For LLCs and corporations, the process is:
- Run a search to confirm your business name is available
- LLCs must file Articles of Organization, and corporations must file Articles of Incorporation with the Wisconsin Department of Financial Institutions
Businesses in Wisconsin can also opt to use a different name to conduct business, which will require them to file for a Wisconsin trade name (also known as “doing business as” or “DBA”).
3. Choose a business structure
Every business registered in Wisconsin must choose a business structure.
The most common business entity types in Wisconsin are:
- Sole proprietorship
- Limited liability company (LLC)
- Business corporation
- Statutory close corporation
- Limited liability partnerships
- Cooperative association
- Unincorporated cooperative associations
- Common law trust
Wisconsin’s One Stop Business Portal offers a wealth of business resources detailing the advantages and disadvantages for each type of business, and lists key considerations for each one before registering.
The formal business structure you choose will have a significant impact on the complexity of the startup process, personal liability protection, business size, business tax registration, and more. Many services businesses operate as limited liability companies, due to tax flexibility and personal asset protection that this legal entity provides.
Not sure which business structure is right for you? Read our guide on business structure types and work with a CPA to make the right choice.
4. Check zoning requirements
Your business location in Wisconsin will almost certainly be regulated by zoning laws, even if you run a mobile or home-based business. Before setting up shop, make sure you comply with the zoning laws that affect your business.
Zoning in Wisconsin is administered at both the county and city levels. For example, zoning for Kenosha county will have different rules and regulations than zoning in Madison. Depending on your type of service business, you may need to look for specific zones within your city or county that allow your type of business to operate.
5. Register your business
There are two websites that Wisconsonites should know about when registering their business. First is the Wisconsin Department of Revenue, where you can register as a sole proprietor, non-Wisconsin LLC or corporation, partnership, or nonprofit. Second is the One Stop Business Portal where all other types of businesses can register.
We highly recommend that you enlist the help of a CPA or business accountant to help you navigate the registration process and ensure that you’re covering all of your legal and financial bases.
Here are the key steps to registering a business in Wisconsin:
- Elect or hire a registered agent. This person or corporation must have a physical address in Wisconsin, and is responsible for processing all legal notices and government correspondences on behalf of your business. You don’t need a registered agent for sole proprietorship businesses.
- File forms and pay fees. Registration forms and fees will change depending on your business entity type. Visit the Department of Revenue or One Stop Business Portal to get started.
- Set up a Federal Employer Identification Number (FEIN or EIN). You’ll need an EIN to pay business taxes, open business bank accounts, and hire employees. You can apply for an EIN online.
- Register for Wisconsin sales and use tax. If you plan to sell certain products or real estate in Wisconsin, you may also need to collect sales and use tax. You can find out more information through the Wisconsin Department of Revenue.
How much does it cost to register a business in Wisconsin?
The cost to register a business in Wisconsin varies for each business structure. Registering an LLC in Wisconsin costs $130 (online filing) and $170 (in-person filing). Registering a business corporation or statutory close corporation costs $100.
6. Open a business bank account
Managing business finances in a dedicated business bank account is both a good idea and a requirement for most business types. It allows you to keep your personal and business finances separate, and it will save you time and confusion when working through chores like bookkeeping, accounting, and paying taxes.
To open a business bank account, you’ll need an EIN. Depending on your business structure, you may also need a trade name certification and the owner’s driver’s license (for sole proprietorships), and articles of organization, operating agreement, and certificate of good standing (for LLCs).
You’ll need a business checking account for day-to-day transactions. A savings account will also allow you to set aside profits and funds for future tax payments. A business credit card can also help you build a credit score for your business.
7. Arrange permits and licenses
Before going into operation, it’s likely that you’ll need to apply for licenses or permits at the federal, state, and local levels. The permits and licenses you may need will depend on your niche and the nature of your business.
Here’s where to look at each level:
- Federal level. Check the SBA’s licenses and permits page.
- State level. The Wisconsin Department of Revenue administers professional licenses and permits. Completing Wisconsin’s Business Tax Registration is also required, and allows businesses to register for a number of different tax permits. This includes the main state-level tax permit called the seller’s permit.
- County level. You should also check in with the Wisconsin County Clerk in your area to learn about any licenses or permits that may apply to your business.
- Local level. Consult city hall or the local chamber of commerce to learn about and apply for business licenses and permits. For example, licenses and permits are handled through the City of Madison clerk’s office.
8. Secure small business funding
Most service businesses need startup funding. This is where having a strong business plan will pay dividends. With it, you can apply for a wide range of different loans and grants from the government and financial institutions, and show that you have a clear path to profitability.
At the federal level, the SBA is a great resource to help business owners connect with potential lenders. Head to the Lender Match page to find a local lender in Wisconsin.
The Wisconsin Economic Develop Corporation also offers a wide range of business grants to help give small businesses a running start.
You can also consider securing investment through avenues like:
- Equity partners
- Friend or family loans
- Small business loan
- Financing for business owners
- Angel investment
Only certain types of service businesses can benefit from small business financing. We recommend contacting your local lenders to find out what funding and business loan options are available to you.
9. Insure your business
Almost all services businesses need some kind of business insurance. Even if you don’t carry stock or rent a storefront. If your business is an LLC, you will have some liability insurance protection and personal asset protection, but it’s also a good idea to add professional liability protection and additional coverage, just in case.
In some cases, depending on the type of work you do, and the number of employees you have, additional insurance will be non-negotiable. For example, Wisconsin businesses with three or more employees must carry worker’s compensation insurance. Additionally, all business-owned vehicles in Wisconsin must be covered by commercial auto insurance. Trucking companies usually also require additional coverage to comply with state regulations.
For more details, read the Consumer’s Guide to Insurance for Small Business Owners, and check out our guide: What type of small business insurance do I need?
10. Invest in business software
Finding efficiencies early will help you save time as a physical or online business owner, and focus on the things that drive the most impact for you and your customers. Business software applications, for example, can automate time-consuming but important tasks, helping you focus on the activities that have the largest impact.
Business software can be used to streamline:
- Invoicing. Free invoicing software, can help you automate invoicing, accept credit payments, and ensure that you get paid promptly.
- Scheduling. Automate appointment booking, tracking, and reminders with tools like Calendly and TidyCal.
- Review management. Online reviews are critical to growing your customer base and becoming a successful business. Durable's review management tool can help you automate your review collection process.
- Customer relationship management. Track every interaction with prospects and clients so that you can give them exactly what they need at just the right time. Durable's free CRM automates many different customer interactions, helping you stay organized and top-of-mind.
11. Understand your tax obligations
It’s critical that you stay on top of your tax obligations when running a service business in Wisconsin. The best way to do so is to work with a CPA who specializes in your business niche.
In addition to the tax return you’ll have to file in Wisconsin, you may also have obligations at each level of government. Tax codes can be complicated; a financial pro is worth the addedfee.
Here are some key business tax obligations in Wisconsin:
- Sales and use tax. You most likely have to collect Sales and Use Tax from your clients and customers to remit to the Department of Revenue.
- Franchise or income tax. Depending on your business structure, you may also be required to pay a franchise or income tax for your business. However, in Wisconsin, only one is imposed against a corporation in a taxable year.
- Excise taxes. You might have to pay additional taxes on the products you sell such as alcohol and tobacco.
12. Build your team
Lastly, unless your planning is to keep your business as a one-person-show, you’re likely going to need some help to scale your earnings. Hiring full time employees is a big commitment, so many small business owners opt instead to work with independent contractors when they’re first starting out.
If you do need full- or part-time staff, make sure you’re compliant with state and federal employment regulations before you start hiring.
Here are some key employer responsibilities:
- Obtain an EIN. You need an EIN to hire employees.
- Understand your obligations. Wisconsin’s Department of Workforce Development has a detailed section on your responsibilities as an employer under state and federal business laws.
- Verify employee eligibility. You’ll need to verify that your potential hires are eligible to work in the United States by having them fill out this form.
- Report new hires. You are required to report new hires via the State of Wisconsin Department of Workforce Development.
Bordered by two great lakes and four neighboring states, the state of Wisconsin offers a booming small business economy and a wide range of growth opportunities for budding entrepreneurs. Follow the steps in this guide to learn how to start a business in Wisconsin.
Once your business is set up, stick around and give Durable a try. Durable is an all-in-one platform with everything you need to start, run, and grow a service business. Build your business website in minutes, and make invoicing, customer management, and review management a breeze.
Try Durable today—it’s free!