How to Start a Business in Wisconsin
There are multiple steps to starting a business in Wisconsin and as a small business owner, you might be feeling overwhelmed.
But don’t worry, we’ve broken down the steps to walk you through turning your idea into a successful business.
Step 1: Create a Business Plan
The first step is to develop your business idea into a business plan. This doesn’t have to be a formal document, but there are some important details to think about before you jump in.
Once you have a business idea, you should decide whether to work by yourself or to have business partners.
If you get stuck working on your business plan, you can contact the local office of the Small Business Administration for help: Wisconsin District Office.
You should decide other details during this first step, such as your:
- business model
- marketing ideas
- business address
Your business model is how you plan to make money – what you will sell, how is it made and delivered, etc. Your business plan should consider your business location, and whether or not you will run your business online.
Think about whether you plan to hire employees. And you should conduct market research to ensure your business has a good chance of success.
Review the NAICS codes list to find the standard name for your industry. Selecting your industry ahead of time is important. Applications for business licenses and tax registrations often ask for this information (or the NAICS code). Choosing your industry upfront will reduce confusion when you complete those forms.
It’s a good idea to think of marketing ideas early on to help your business succeed. A good marketing plan can include developing a logo and brand name, deciding how and when to advertise, building a website, and developing a social media strategy.
You should choose a primary business address. This can be an actual office address, but it doesn’t have to be. It could be your home address or one of your business partners’ home addresses. You could even rent a mailbox or a PO box. The purpose is to have one designated address where all mail for the business is sent, and that you can use on official documents.
Step 2: Choose a name for your business
The next step is to choose a Wisconsin business name. We recommend taking your time to choose a business name people will remember and positively associate with your business.
The best names are:
- easy to spell
- easy for people to remember
- easy to pronounce
- original and unique
- not too many words
- not easily confused with other businesses
For additional business name tips, check out how to choose a business name.
After you’ve thought of a few business names, you should search them on the Wisconsin Corporate Records search page to make sure they are available. This is because two entities can’t have the same business name in the same state.
Search for your domain name
We recommend coming up with a business name that’s available as a domain name and as a social media username.
It’s okay to look at variations of your business name. Because the domain name and social media username don’t need to exactly match your business name.
You can search for domain names with GoDaddy below.
Find a domain name
Tip: If you need help coming up with more names, check out TRUIC’s Business Name Generator.
Step 3: Choose your business structure
Next, you’ll need to select a type of legal business entity for your Wisconsin business.
The most common structures for Wisconsin businesses are:
- Sole Proprietorship
- Limited Liability Company (LLC)
A Sole Proprietorship in Wisconsin (aka Sole Prop) is an informal business structure with one owner.
This business structure isn’t a separate legal entity. Instead, it happens when you operate your business as yourself.
The advantage of Sole Proprietorships is that they are easy to set up. You don’t have to file a document to “form” your Sole Prop with the state. However, if you’d like, you can file paperwork to request an EIN from the IRS, and reserve a DBA with the state or county.
Another benefit is that they have pass-through taxation. This means the owner reports the business income or loss on their personal tax return.
The disadvantage of a Sole Prop is that the owner is personally responsible for the business debts and obligations (there’s no personal asset protection).
A Wisconsin General Partnership (aka Partnership) is similar to a Sole Proprietorship, but this informal business structure has 2 or more people.
Like a Sole Proprietorship, the advantage of a Partnership is pass-through taxation. This means the owners report the business income or loss on their personal tax returns.
The disadvantages of a General Partnership are that they require more paperwork to set up, and the owners are personally responsible for the business debts and obligations.
A Wisconsin Corporation is a formal business entity that must have a board of directors, corporate officers, and shareholders.
The advantage of a Corporation is liability protection for the owners. The disadvantages are added complexity of management, double taxation, and the requirement to hold annual board meetings.
Additionally, Corporations aren’t very common for most small business owners. They are more commonly used by companies that are looking to raise capital, take the company public, or have large healthcare expenses.
An example of companies that operate as Corporations are high-growth technology and startup companies.
Limited Liability Company (LLC)
A Wisconsin LLC is a hybrid business entity that combines the benefits of a Corporation, Sole Proprietorship, and Partnership.
Meaning, LLCs have personal liability protection for their owners. If the business is sued, the personal assets of the owners are protected.
LLCs also have pass-through taxation, and therefore avoid the double taxation that Corporations face.
LLCs are also a lot easier to set up and maintain than Corporations. For these reasons, LLCs are the most common choice for small businesses.
For more information, please see LLC vs Sole Proprietorship vs Corporation.
Step 4: Register your business with the Wisconsin DFI
Depending on which business structure you choose, you may need to file paperwork with the Wisconsin Department of Financial Institutions (DFI). Although it might sound like they just deal with banks, the Wisconsin DFI handles registration of businesses in Wisconsin.
If you’re starting an LLC or Corporation, you’ll also need to choose a Registered Agent in Wisconsin.
To create a Wisconsin LLC, you’ll need to file the Wisconsin Articles of Organization.
The filing fee to form a Wisconsin LLC is $130 if you file online (or $170 if you file by mail).
To create a Wisconsin Corporation, you’ll need to file the Articles of Incorporation (Form 2). This form can be filed online or by mail.
The filing fee to form a Wisconsin Corporation is $100.
Wisconsin Sole Proprietorship
If you want to operate as a Sole Proprietorship in Wisconsin, there’s no paperwork to file with the state. You can simply begin business activities. However, if you want to do business under a name other than your first and last name, you should file a DBA name.
And if you want to use an EIN instead of the owner’s social security number, you should file paperwork to get your EIN with the IRS.
If you want to operate as a Partnership (aka General Partnership) in Wisconsin, there’s no paperwork to file with the state. You and your partner(s) can simply begin business activities by drafting a Partnership Agreement.
However, if you want to do business under a name other than the business’s legal name, you should file a DBA name.
And the Partnership needs to file paperwork with the IRS to get an EIN.
Wisconsin DBA (Trademark)
If you want to do business under a name that’s different than your business’s true and legal name, you should file a DBA.
Using a DBA can be helpful for branding and marketing.
DBAs in Wisconsin are referred to as Trademarks and are handled by a different department of the DFI. Check out the DFI Trademark page for details on the filing requirements.
The application form is called the Trademark Registration and it costs $15.
Need to save time? We recommend hiring MyCompanyWorks ($99 + state fee) to file your DBA.
Wisconsin Department of Financial Institutions (DFI)
If you have any questions about registering your company, you can contact the Wisconsin Department of Financial Institutions.
Step 5: Get an EIN Number
An EIN Number (Federal Employer Identification Number) is also known as a Federal Tax ID Number. It is used by the Internal Revenue Service (IRS) to identify your business for tax purposes.
An EIN Number will also be used to open a business bank account.
You can get an EIN for your Wisconsin business by mail, fax, or online. Getting your EIN online is the fastest option, since it only takes about 15 minutes to complete the application.
For instructions on how to complete the EIN application for a Wisconsin LLC, please see Wisconsin EIN Number.
Note: If you have a formal business structure, like an LLC or Corporation, make sure it is approved by the state before applying for an EIN Number.
Step 6: Open a business bank account
After your business structure is set up, it’s a good idea to open a separate business bank account.
This is important because it keeps personal and business accounts separate. Personal and business expenses should be paid from these separate accounts.
All of this helps protect your personal assets. And it makes accounting and bookkeeping easier for your business.
Once the account is opened, the bank will give you a debit card. And you can also get a business credit card to earn rewards if you’d like.
And if you need business funding, the bank may be able to help.
Tip: To keep your personal finances and business finances organized, we recommend using a tool like Quickbooks, Mint, or a simple spreadsheet.
Step 7: Business license and permits
After starting your business in Wisconsin, you may need to obtain a business license or permit.
Your requirements are determined by the industry you are in and where your Wisconsin business is located.
You can reference our Wisconsin business license page to help determine which licenses and permits your business may need.
Tip: Save time by hiring an expert. We recommend using IncFile ($99) to handle the business license research for you.
Sales Tax License
If you sell products to consumers in Wisconsin, you may need to collect sales tax and get a Seller’s Permit. This is issued by the Wisconsin Department of Revenue.
To get this permit, you’ll first need to complete an application for Wisconsin Business Tax Registration. You can learn more here:
Step 8: Income taxes
Depending on your business, you’ll likely need to file federal, state, and local taxes.
You can file these yourself or you can hire a business accountant for help. Check out our How to find an accountant guide.
Step 9: Purchase Business Insurance
For most business owners, business insurance isn’t required, however, it may be a good idea.
The main type of business insurance is called General Liability Insurance. This covers accidents that occur at your place of business, like property damage and personal injury.
Your business may also need specialty insurance like Professional Liability Insurance (for example, Errors and Omissions Insurance or Malpractice Insurance). These provide coverage for more specific claims that arise from professional services (like claims against accountants, consultants, and healthcare providers).
Starting a Wisconsin Business FAQs
On the other hand, if you want to operate as a Limited Liability Company (LLC) or Corporation, you’ll need to file paperwork with the state. Included within this paperwork will be your business name, your Registered Agent’s information, and your business address.
After you choose your business structure, you can then open a business bank account and begin your operations.
You can list your home address on your LLC paperwork or you can hire a Registered Agent Service and use their address instead.
Sole Proprietorship: Because there is no state filing to form a Sole Proprietorship in Wisconsin, the cost is $0.
General Partnership: Because there is no state filing to form a General Partnership in Wisconsin, the cost is $0.
Limited Liability Company: A Wisconsin LLC costs $130. This is the fee to file the LLC Articles of Organization with DFI.
Corporation: Filing the Articles of Incorporation with DFI costs $100.
Note: You may also have other Wisconsin business costs, like business license application fees, a DBA filing fee, and a Wisconsin business tax registration fee.
However, certain professions may require an occupational license. And municipalities have different license and permit requirements. It’s important to check with your city or county about business license requirements.
How much does a Business License cost in Wisconsin?
Wisconsin doesn’t have a general business license, so there are no fees there.
However, your business may need an occupational license or municipal license or permit to operate. The filing fee for licenses will vary depending on where you’re doing business and which industry you’re in.
And you might not need a business license at all!
Unfortunately, we can’t say what your business license costs would be, because it depends on several factors and the cost of Wisconsin licenses varies.
However, the most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in Wisconsin, then you should start your business in Wisconsin. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business.
For example, if you form an LLC in Florida, but live in and conduct business in Wisconsin, you’ll also need to register your Florida LLC in Wisconsin (and pay fees). And you’ll end up paying Wisconsin taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you live in and do business in Wisconsin, then yes, Wisconsin is the best state to form an LLC. If you don’t live in and do business in Wisconsin, then no, Wisconsin isn’t a good state to start a business.