This post is for information only. You are responsible for reviewing and using this information appropriately. This content doesn’t contain and isn’t meant to provide legal, tax, or business advice. Requirements are updated frequently and you should make sure to do your own research and reach out to professional legal, tax, and business advisers, as needed. Businesses outside of Wisconsin will have different steps and requirements. To sell products using the Shopify platform, you must comply with the laws of the jurisdiction of your business and your customers, the Shopify Terms of Service, the Shopify Acceptable Use Policy, and any other applicable policies.
Wisconsin is abundant with small business innovation—99% of Wisconsin companies qualify as small businesses according to the Small Business Administration (SBA), while half of Wisconsin employees work for a small business. The Badger State fosters a diverse array of industries. It offers a higher percentage of manufacturing employment than any other state, and it’s one of only two states with a fully funded pension system. Wisconsin’s corporate tax rate is 7.9%, near the US median and notably lower than that of neighboring Illinois. This has led many small business owners to consider Wisconsin as a hub of operations. Here are eight steps to guide you when starting a business in Wisconsin.
1. Choose a business idea
The long-term success of a business often hinges on the strength of its foundational concept. Some great business ideas involve creating a whole new product or service, while others simply improve upon existing offerings. As a new Wisconsin business owner, you’ll need to analyze your target market, with special attention to customers who aren’t being fully served. You will also find value in studying successful businesses in your sector, assessing their strengths, and uncovering where you could offer a better product or service. This initial market research will serve you well throughout your business ownership.
2. Name your Wisconsin business
A well-chosen business name gives customers clues about a company’s product offerings, prices, and specialties. To secure a name for your new Wisconsin business, you must:
- Find ways to stand out. A catchy, unusual name can lodge itself in a customer’s mind. Alliteration, rhymes, and pop culture references could all help your business name stand out from the competition.
- Register your original business name. Before you can register a business name in Wisconsin, you must confirm another company hasn’t already chosen it. The Wisconsin Department of Financial Institutions offers a Corporate Records Name Availability database. Once you find an unclaimed name, reserve it for $15 with a Name Reservation Application submitted via mail.
- Include certain words. Wisconsin LLCs must include the phrase “Limited Liability Company” or its abbreviations (“LLC” or “L.L.C.”) in their official business names. Wisconsin business corporation names must include “Corporation,” “Company,” “Incorporated,” or “Limited,” or abbreviations of these words.
- Consider a DBA. Business entities often interface with customers under a name different from their legal name. This is called a DBA, which stands for “doing business as.” To register a DBA in Wisconsin, you’ll need to file for a trademark with the Wisconsin Department of Financial Institutions. The fee is $15, and registration lasts 10 years.
- Claim an online domain name and social media handles. Today’s customers expect an easy process for tracking down a business online. Select an online domain name closely associated with your formal name or DBA, and reserve social media handles that correspond with your domain, legal business name, or DBA (if applicable).
3. Create a business plan
All business types—from sole proprietorships to C corporations—need a business plan that lays out organizational objectives, plots growth, and establishes benchmarks for success. Many business plans include a financial plan that balances business costs with business income. You can consult a business plan template or business plan examples to learn how to craft a plan of your own. Most comprehensive business plans include:
- An executive summary
- A company mission statement and description
- An outline of organizational and managerial structure
- A portfolio of products or services
- A business operating plan, including predicted business expenses
- A customer segmentation report
- A market research and analysis
- A comprehensive marketing plan
4. Choose a business structure and get started
Your Wisconsin business will likely take the form of one of three business structures: a sole proprietorship, a limited liability company (LLC), or a corporation. Each of these business entities comes with its own set of benefits and legal requirements. The Wisconsin Department of Revenue offers easy-to-use online resources that make starting a business quite simple, lowering the barrier for startups. Here are more details on the different business structures:
- Sole proprietorship. Sole proprietorships are informal business structures. Legally, they are an extension of their owner, whereas other business structures like LLCs qualify as separate entities. Wisconsin sole proprietorships come with no legal paperwork requirements, and sole proprietors keep all their business profits. On the downside, sole proprietors cannot access the tax benefits and personal asset protections of an LLC or a corporation. If the business is sued, the owner may have to pay out of their personal savings.
- Limited liability company (LLC). A limited liability company (LLC) is a formal business structure that is owned by LLC members. The LLC business structure is a way to obtain personal asset protection without the double taxation of a corporation. LLCs offer personal liability protection to their owners. If the LLC is sued, the owner’s personal assets are not at risk. LLCs are also treated as pass-through organizations, meaning LLC profits and losses pass through to members, who report them to the Internal Revenue Service (IRS) on their personal tax returns.
- Corporation. A corporation is a legal business entity that is owned by a group of shareholders. Like LLCs, corporations separate company assets from their owners’ personal assets, protecting owners in the event of bankruptcy or a lawsuit. Corporations get taxed at a corporate rate, which is different from the personal income tax rate. In Wisconsin the corporate excise tax is 7.9%. Corporations have a more complex legal structure and require more formalized accounting systems than LLCs or sole proprietorships. The shares-based corporate business structure makes it easier to welcome new shareholders, sell the business to new owners, and raise capital for business expenses.
Obtaining an EIN
If your Wisconsin business plans to hire employees, you must apply for a federal employer identification number (EIN) with the IRS. The EIN functions as a business’s federal tax number. You use it in many business ownership scenarios, from establishing a business bank account to paying business taxes.
You’ll also use your EIN to obtain a seller’s permit to conduct commerce in Wisconsin. Apply for your seller’s permit through the Department of Revenue. Wisconsin’s state sales tax is 5%, as of 2022. State law allows counties in Wisconsin to levy an additional sales tax that can be as high as 0.5%. All Wisconsin businesses must collect sales tax and remit it to state and local governments. Another requirement is Wisconsin business tax registration, which costs $20, plus annual renewals of $10 per year.
Incorporating in Wisconsin
Wisconsin requires new corporations to file Articles of Incorporation with the Wisconsin Department of Financial Institutions. The filing fee is $100, whether you file online or through the mail. Your Articles of Incorporation must include:
- Your business’s proposed name
- Contact information, including mailing address, email address, and phone number
- Information about your business’s corporate shares of stock
- Your registered agent’s name and address (your registered agent must be located in Wisconsin)
- The name and address of each incorporator
- The signature of at least one incorporator
5. Obtain business licenses and permits
The Wisconsin state government offers a convenient one-stop business portal to get your business licensed and permitted by various in-state agencies, including the Department of Workforce Development and the Department of Financial Institutions. If you operate a foreign LLC or corporation that wasn’t originally formed in Wisconsin, you have to first register with the state Department of Revenue.
There may be additional licenses necessary to conduct business in Wisconsin, depending on your profession. The Department of Safety and Professional Services maintains an interactive database that connects you to licenses by department.
6. Examine business insurance options
The Wisconsin Commissioner of Insurance publishes a Consumer’s Guide to Insurance for Small Business Owners. The state mandates two specific types of insurance for businesses: workers’ compensation and vehicle insurance. Company leaders often opt for additional business insurance policies, including:
- Commercial general liability insurance. A CGL policy is a type of general liability insurance that protects businesses from financial claims involving injury, property damage, false advertising, libel, and slander.
- Professional liability insurance. A professional liability insurance policy covers your business should it be accused of malpractice or gross negligence on the job.
- Commercial property insurance. This type of policy can reimburse you for the loss or destruction of property your business owns, including real estate or even cash.
- Cyber liability insurance. This type of insurance covers digital data breaches and is favored by companies that collect sensitive personal data such as credit cards and Social Security numbers.
- Unemployment insurance. Wisconsin employers pay unemployment insurance, which is levied like a tax. The funds support employees who have lost their jobs through no fault of their own.
7. Understand financial considerations
Set up an account at a commercial bank or credit union to handle your new company’s business banking. If you plan to create subsidiary companies, you’ll need multiple bank accounts—one for each separate legal entity. Corporate bookkeeping can be more labor intensive than personal bookkeeping; many companies pay for top-of-the-line accounting software or hire accounting firms.
Your new Wisconsin business may need investment capital to gain its footing. The Wisconsin Economic Development Corporation and the Wisconsin Small Business Development Center offer information about grants, bond programs, and traditional financing options that help new companies get going. Another resource is the US Small Business Administration, which has two Wisconsin offices, in Madison and Milwaukee. The Chamber of Commerce provides the details of Wisconsin angel investors. You can also connect with lenders and investors by using a merchant support service like Shopify Capital.
8. Market your business
After you’ve filed all your legal paperwork, it’s time to put together your marketing strategy and build your brand. Create logos, slogans, color schemes, and fonts that match your brand values. You’ll then be ready to launch marketing campaigns that include:
- Pay-per-click web ads. Typically more affordable and precisely targeted than a TV or radio ad, pay-per-click campaigns pop up during web videos, in sponsored search results, on websites, and in social media feeds.
- TV and radio ads. TV and radio ads, while costly, are traditional marketing tools that help a business reach a wider audience.
- Social media influencer campaigns. Social media influencers can reach younger audiences who rarely engage with traditional TV and radio. Companies pay them to showcase their products and services as part of their social media feeds.
- Organic marketing. Organic marketing, sometimes called awareness content, includes search engine optimized (SEO) articles, informational videos, blog posts, newsletters, and podcasts. This content helps your brand in organic search rankings and in developing a following among users.
Starting a business in Wisconsin FAQ
How much does it cost to start and maintain an LLC in Wisconsin?
If you’re forming a Wisconsin LLC, you’ll pay $130 to file your Articles of Organization online or $170 by mail. A foreign LLC—organized outside of Wisconsin but operating in the state—files an initial fee of $100. Wisconsin corporations require Articles of Incorporation, which cost $100 to file both online and by mail. Wisconsin LLCs and corporations must file annual reports containing the most up-to-date information about the company. These annual filings must be done online, and they come with a fee. The cost is $25 for Wisconsin-based companies and $65 (or more) for foreign companies first established out of state.
What do I need to start a business in Wisconsin?
To start a business in Wisconsin, you need a legal business name and formation documents (Articles of Incorporation for corporations, or Articles of Organization for LLCs). A federal employer identification number (EIN) is required to hire employees or apply for certain permits, and a business bank account will keep your company finances separate from your personal finances. None of these are necessary if you want to establish a sole proprietorship, but note that sole proprietorships are informal structures that have no legal distinction from the people who own them.
Does Wisconsin require a business license?
Wisconsin does require its businesses to obtain certain licenses. Wisconsin businesses must register for the state’s business tax and obtain a seller’s permit to conduct commerce in the state. You can apply for both through the Department of Revenue. Other licenses and permits can be obtained through the state’s convenient one-stop business portal.
Is Wisconsin a good place to start a business?
If you can stomach the cold weather, you may find Wisconsin to be an appealing home for your small business. Over 99% of the state’s businesses qualify as small businesses, and half of Wisconsinites draw income from small businesses. Taxes and home prices are lower than in neighboring Illinois, yet much of Wisconsin’s population lives within close proximity to the huge Chicago metropolis.