Starting a Business in Wisconsin
A new business in Wisconsin is not out of reach. So have you been wondering: how do I start a new business in Wisconsin? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Wisconsin during a recession?
New Business in Wisconsin: Pros and Cons
Business Insider named Wisconsin the fifth worst state to start a new business in, per a 2016 article. This is for the whole country. The state has the second lowest rate of new business owners. Also, about three quarters of all new business owners in the state started their businesses due to opportunity rather than unemployment. However, this is the third lowest in the nation.
But not so fast. In 2018, Forbes listed Wisconsin as their number 32. And Fit Small Business gave Wisconsin the somewhat covet-worthy number 15 slot. Naturally, keep in mind that the three sites have differing methodologies.
Why the changes?
Per the Forbes article, Wisconsin is above average for quality of life, economic climate, and regulatory environment. But it sinks below average when it comes to labor supply and business costs.
Over at Fit Small Business, Wisconsin excelled at the cost of starting a business (sixth in the nation) and also did well when it came to labor market and startup activity. But it was a stinker for access to capital (50th) and didn’t do so hot for taxes, either, coming in at number 38.
So, which is right? In particular, it would seem as if Fit Small Business and Forbes are at polar opposites for labor market/supply. Forbes didn’t offer many clues on its methods, but at Fit Small Business, their criteria were location desirability and attainment of a bachelor’s degree (by percentage). Hence it’s possible there aren’t too many people available to be hired in Wisconsin. But when it comes to the ones who are, they are more likely to have bachelor’s degrees. Something to keep in mind, in particular, when starting a technical business, such as in computer support. Still, expect competition to be high.
Start a New Business in Wisconsin – Wisconsin Top Industries
Per In Wisconsin, the biggest industries in Wisconsin are bio health, engineering, and food and beverage. Another top industry for Wisconsin is food processing, as Wisconsin is well known for dairy. More top Wisconsin industries are food safety, agriculture, and energy. Yet more top industries in Wisconsin are water technology, forestry, and paper processing. Wisconsin also has a great deal of employment in conservation, aviation, and also manufacturing.
Start a New Business in Wisconsin – Wisconsin Business Ideas
Smart business owners can find new opportunities. Work with the bigger industries in the state. Offer goods or services such as the development and distribution of safety equipment. Other ideas are food service and hospitality. More ideas are trucking for any industry. And another idea is computer support in areas such as programming and also data.
Here is how to start a new business in Wisconsin.
Start a New Business in Wisconsin – Wisconsin New Business Secretary of State Requirements
Register a Business Name
Search for business name availability on the Wisconsin Department of Financial Institutions website.
A Wisconsin corporation must have a unique name. Choose a name not in use by another corporation registered in the state of Wisconsin. Before filing to incorporate, search online records as well as other registers and catalogs and determine if a name is available.
Search a database of registered Wisconsin corporations at Wisconsin Corporation on WDFI.org (the Wisconsin Department of Financial Institutions website).
Corporate Names and Name Reservations
It is not obligatory to reserve a corporate name before filing to incorporate in Wisconsin. But if a business owner wants to reserve a name before they file to incorporate, they can submit a name reservation application to the office of the Wisconsin Secretary of State. This application is not available online.
The filing fee is $15.00 for this application. Therefore, contact the office of the Wisconsin Secretary of State for more details.
Corporate names in Wisconsin must include the word “corporation,” “incorporated,” “limited,” or “company.” Or it can also be an abbreviation of one of these words.
A Wisconsin corporation owner will need to choose a registered agent who will act as an agent for service of process for the corporation. A registered agent receives all legal and tax documents for a corporation. They may choose an adult resident of Wisconsin, a corporation in Wisconsin, or a corporate services company as the registered agent. However, a corporation cannot act as its own registered agent.
Business Permits and Licenses
Visit the Department of Safety and Professional Services’ License, Permit and Regulations page.
Local Permits and Licenses
Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.
For example, in Milwaukee, go to the New Business Licenses and Permits page on the city of Milwaukee website.
The Department of Financial Institutions has all the necessary forms.
You can start with the Wisconsin Department of Revenue‘s very useful FAQs. Then go to their One-Stop Business Portal.
Starting a New Business in Wisconsin – Virtual Offices
Alliance Virtual Offices offers Wisconsin virtual business office space in the following cities: Green Bay and Milwaukee. Davinci offers virtual business offices in Wisconsin in Green Bay, Madison, Milwaukee, and Wauwatosa.
Use Regus for Waukesha, Milwaukee, and Madison. For Appleton, Eau Claire, Oshkosh, and La Crosse, and for other parts of the state, ask local business owners. Also try computer user groups for help in this area.
Other options may be virtual business office space in nearby states. These are Illinois and Iowa to the south (Iowa is also to the west). And there are also Michigan to the east, and Minnesota to the west.
Building Business Credit for a New Business in Wisconsin
Small business credit is credit in a company’s name. It doesn’t tie to an entrepreneur’s personal credit, not even if the owner is a sole proprietor and the solitary employee of the company.
As such, a business owner’s business and personal credit scores can be very different.
Since business credit is separate from individual, it helps to protect an entrepreneur’s personal assets, in case of litigation or business insolvency.
Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same merchant. This effectively doubles purchasing power.
Another advantage is that even startup companies can do this. Going to a bank for a business loan can be a recipe for frustration. But building business credit, when done right, is a plan for success.
Individual credit scores are dependent on payments but also other considerations like credit usage percentages.
But for company credit, the scores truly just hinge on whether a small business pays its debts timely.
Building small business credit is a process, and it does not happen without effort. A small business has to proactively work to develop small business credit.
However, it can be done easily and quickly, and it is much faster than developing personal credit scores.
Vendors are a big component of this process.
Carrying out the steps out of sequence will lead to repetitive denials. No one can start at the top with business credit.
Starting a New Business in Wisconsin – Small Business Fundability™
A business has to be Fundable to lending institutions and merchants.
Hence, a business will need a professional-looking web site and e-mail address. And it needs to have website hosting bought from a hosting supplier.
Additionally, business phone numbers should have a listing on ListYourself.net.
Likewise, the business telephone number should be toll-free (800 exchange or comparable).
A company will also need a bank account devoted solely to it, and it must have every one of the licenses essential for running.
Starting a New Business in Wisconsin – Dealing with the IRS
Visit the Internal Revenue Service website and obtain an EIN for the business. They’re free. Choose a business entity like corporation, LLC, etc.
A business can begin as a sole proprietor. But they should switch to a form of corporation or an LLC.
This is in order to minimize risk. And it will make best use of tax benefits.
A business entity will matter when it pertains to tax obligations and liability in the event of litigation. A sole proprietorship means the owner is it when it comes to liability and tax obligations. No one else is responsible.
Instigating the Business Credit Reporting Process
Begin at the D&B web site and get a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a small business in their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
In this manner, Experian and Equifax will have something to report on.
First you ought to build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can begin to get more credit.
These kinds of accounts have the tendency to be for the things bought all the time, like marketing materials, outdoor work wear, and office furniture.
But to start with, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are oftentimes Net 30, instead of revolving.
So, if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term, such as within 30 days on a Net 30 account.
You want 3 accounts reporting to move onto more credit.
Monitor Your Business Credit
Know what is happening with your credit. Make sure it is being reported and deal with any inaccuracies as soon as possible. Get in the habit of checking credit reports. Dig into the particulars, not just the scores.
We can help you monitor business credit at Experian, Equifax, and D&B for 90% less than it would cost you at the CRAs.
Update Your Records
Update the details if there are errors or the information is incomplete.
Fix Your Business Credit
So, what’s all this monitoring for? It’s to dispute any errors in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way.
Fixing credit report inaccuracies means you precisely itemize any charges you dispute.
A Word about Business Credit Building
Always use credit sensibly! Don’t borrow more than what you can pay back. Track balances and deadlines for repayments. Paying off punctually and fully will do more to raise business credit scores than almost anything else.
Excellent business credit scores help a small business get loans. Your lender knows the small business can pay its debts. The small business’s EIN links to high scores. So loan providers won’t feel the need to ask for a personal guarantee.
Business credit is an asset which can help your business for years to come.
Learn more here and get started toward opening a new business in Wisconsin.
Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.
Wisconsin’s Response to COVID-19
On March 12, Governor Tony Evers declared a state of emergency. The Governor worked with U.S. Sen. Tammy Baldwin to help secure federal funding to support efforts in responding to COVID-19 in Wisconsin.
On March 11, the Centers for Disease Control and Prevention announced that Wisconsin will be receiving more than $10.2 million to support response and prevention efforts.
On April 18, it was announced that funding from the CARES Act could benefit nine organizations in Kenosha.