Michigan is indeed an ideal state for you to start a business. The Tax Foundation recently ranks the state as the top 12 in the 2020 State Business Tax Climate for its low corporate and individual income tax rates. The US News also announced that it is the 5th most affordable state in the nation for its cost of living strength and housing affordability.
Starting a business would be challenging at first. As an entrepreneur who plans to have a startup in Michigan, we will help you to overcome the challenges through this guide towards utmost victory. Dive in and follow these steps:
STEP 1: Conceptualize the Business
A successful startup begins with compelling concepts. The first thing you should do is think out of the box. Reflect on what products or services the market doesn’t have. Refine the existing services, reinvent the previous product, and review the preferences of the people. By having a good idea, you can catch the clients or customers effectively and immediately.
STEP 2: Create the Business Plan
Every business starts with a plan. This will be the backbone of your business and the one that will serve as a guide. If you would also want to attract investors, you could easily hand the plan over to the potential ones.
STEP 3: Secure Capital and Funding
Business is all about investing and believing in your niche. As a common investment, money is essential to support the business’s foundation stability. After drafting a plan, it is essential to break down all the capital, assets, and liabilities that you will have, and secure these all to your treasury.
STEP 4: Register your Business
After all the plans and preparation you had determined for your business, the next phase should be the business registration. The registration process from each of the business entities varies. Sole proprietorships require no special filings when your chosen business name includes your original name. You may also file an assumed name certificate otherwise. On the other hand, LLCs and corporations need a registration agent to deal with the Secretary of the State to secure all the legal documents required. If you are planning to have an LLC business, for instance, you need to know how much the Michigan LLC cost so that you can prepare for this beforehand.
STEP 5: Obtain Federal ID
You now need to acquire a federal Employer Identification Number (EIN) to allow you to open bank accounts, file taxes, and handle payroll.
STEP 6: Open Credits and Business Bank Accounts
You need to separate your personal assets from your businesses. It will also make your business easier to file taxes.
STEP 7: Acquire the Necessary Licenses and Permits
No matter what business entity you choose to have, you are required to apply for essential permits and licenses to operate in Michigan. For example, a pawn shop will be needing a reseller’s license to undergo the service they offer.
STEP 8: Choose A Strategic Business Location
Finally, you have to decide on your business’s location. Before doing it, you must think of these things: the convenience of the location for the local clients; the potential competitors in the area; as well as, the current economy of the vicinity. By considering these, you can ensure to have a strategic business location.
Establishing a business in Michigan seems to be difficult at first. But, with the proper steps and procedures, you can achieve success for your startup in the state.