How to Start a Business in Wisconsin
If you’ve ever thought about starting a business in Wisconsin but weren’t sure how to begin the process, we’re here to help. We discuss legal and tax requirements, things to consider when starting your business, and important essentials you don’t want to overlook.
Begin with a Plan
While it might be tempting to jump right into the details, you really need to begin with a solid business plan, which covers things like:
- What you’d like to sell (product, service, or both)
- Whether you’ll have a physical location or online-only presence
- Your target market
- How much financing you’ll need to launch your business
- Marketing strategies
- Steps for growth
After getting your business plan sorted out, you’re ready to select the right business structure.
Select the Proper Business Structure
When planning out your business, you’ll also need to determine the appropriate business structure. In the state of Wisconsin, you have several options to choose from, including:
- Sole proprietorships
- General Partnerships
- Limited Partnerships (LP)
- Limited Liability Partnerships (LLP)
- Limited Liability Companies (LLC)
- Corporations (B or S types, Close, Investment Companies, Nonprofits)
- Cooperative Associations
Note that general partnerships and sole proprietorships aren’t required to register with the Wisconsin Department of Financial Institutions. These business structures may be registered with the recorder of deeds in the county in which the business will operate, but this isn’t a requirement either.
Many business owners appreciate the protection of an LLC since their personal assets are safe even if the company goes bankrupt or faces legal problems.
If you’re unsure which business structure is right for you, there are several resources such as the Wisconsin Small Business Development Center.
After you’ve determined which business structure is right for you, it’s time to get your federal tax ID number.
Obtain a Federal Tax ID Number
Almost every type of Wisconsin business needs to have a Federal Tax ID number, also known as a Federal Employer Identification Number, or EIN for short. This makes it possible for your business to pay federal taxes.
The IRS website makes it simple to register for an EIN online and will let you know if you can use your social security number for tax purposes instead of an EIN. Usually, this is only the case for sole proprietors.
Now that you have an official EIN (or have been approved to use your social security number), you’re able to register your business with the state of Wisconsin.
Get Registered in Wisconsin
When you register your business online, you’ll simultaneously be registered with the:
- Wisconsin Department of Financial Institutions
- Wisconsin Department of Revenue
- Wisconsin Department of Workforce Development (necessary if you’re hiring employees)
Filing fees will vary depending on the business structure. Remember that general partnerships and sole proprietorships aren’t required to register with the state, and therefore will not have registration fees.
- LLCs: $131
- All corporation types: $101
- LLPs: $100
- LPs: $70
Note that each of these business structures will be required to name a registered agent or someone who can accept official documents on behalf of the company.
LLCs must include their articles of organization with their online registration, while corporations (all types) must include the articles of incorporation.
Even if your business isn’t required to register with the state, your business will most likely be required to obtain a Wisconsin tax account.
Obtain Wisconsin Tax Account(s)
Nearly all business structure types, even sole proprietorships and general partnerships, will need to open a tax account with the Wisconsin Department of Revenue for the following specific tax types if certain conditions are met:
- Seller’s Permit
- Consumer’s Use Tax Certificate
- Use Tax Certificate
- Withholding Tax Number
- Excise Tax Permit
You’ll need to register for a seller’s permit tax account if you have any retail sales, leases, or rentals of taxable products/services.
There’s a $20 fee for new registrations, and your tax account must be renewed every two years.
You may also need to pay additional taxes, besides the business income tax, depending on your business activities or location, including:
- Local Exposition Tax
- Premier Resort Area Tax
- Corporate Franchise Tax
- Beer Tax/Liquor Tax
- Fuel Tax
- Tobacco Products Tax
The registration form is available online for download, or you can use the online portal.
You’ve got one more crucial step before opening for business, and that’s obtaining any other required Wisconsin licenses or permits.
Obtain Additional Permits/Licenses
Of course, your business may need more than just a general business license, depending on your industry and/or specific business activities.
Because Wisconsin’s dairy industry is so heavily regulated, you can be certain you’ll need at least one additional permit if your business is involved in any stage of the cheese, butter, yogurt, ice cream, frozen custard, or milk production processes.
The following industries will also need specialized permits to legally operate in Wisconsin:
- Animal Shelters
- Bed and Breakfasts
- Fitness Centers
- Ginseng Growers
- Honey Farms
- Hotels/Motels
- Plant Nurseries
- Restaurants
- Weight Loss Centers
Understand that this is not a full list of every type of business/business activity that could require an additional license or permit. If you’re unsure which additional business licenses or permits you may need, you can always contact a licensed Wisconsin business attorney for help.
Insuring Your Wisconsin Business
The last thing you want to worry about when setting up your business is the possibility that your products or services could harm someone else, but it can happen. Selecting the right business liability insurance could mean the difference between losing your business forever and staying open.
There are three main types of business liability insurance:
- General liability (in case your physical location, website, advertising, etc. harms someone)
- Product liability (in case a product you make harms someone)
- Professional liability (in case a service you provide harms someone)
You want to have strong liability protection in place before you open to the public, just in case. This way you and your customers will be protected should the worst happen.
But there are a few final essentials you want to take care of before you’re truly ready to open your doors (online or in-person).
A Few Essentials
It can be easy to get antsy when opening a business and overlook a few key components in the rush to welcome customers.
Don’t forget about the power of advertising—make sure you take advantage of every platform you can, including social media! Having a strong web presence will draw customers to your business, whether you’re online-only or not. This includes your business website.
A great location for brick-and-mortar stores could be your main sales driver. Don’t let a hard-to-find location or a location with no parking and/or no access to public transportation shut you down. Do your research before you get locked into a location.
Sometimes business owners fail to think about their point of sale system until customers start to complain. Don’t let an out-of-date, slow, or non-secure system ruin your business reputation.
That’s where Epos Now can make your business stand out. Epos Now offers several POS solutions for all types of businesses, including tablet and handheld devices.
Our POS systems can help with essential tasks like:
- Inventory management
- Reporting and analytics
- Customer relationship management
