Whether you’re opening a restaurant or launching an eCommerce business, starting your own venture is an exciting step. And Michigan can be a great place to do so. The state has a diverse demographic and an abundance of resources for business owners. All it takes is some research and careful planning.
This guide will break down some questions to ask yourself before you launch your business in Michigan. By doing so, you can enter business ownership feeling confident and prepared.
Should You Choose a DBA, LLC, or Corporation?
When opening a business in Michigan, you have several licensing options. Some small businesses will choose to file a DBA (doing business as). This is basically a fictitious name that you use when running your business, such as “Jane Doe Photography.” Keep in mind that a DBA doesn’t separate your legal business identity from your personal identity, so you absorb all legal liability of your business.
Business owners who want to create a separate legal entity may want to form an LLC (limited liability company). To achieve this in Michigan, you will need to work with a registered agent. This professional could also help you form a corporation, which some larger businesses may choose to do.
Where Will You Do Your Banking?
The right bank can help keep your business on track, so you want to make sure you choose a bank or credit union that fits your needs. Look into several financial institutions and compare business banking options. While many of the larger banks will have services for small businesses, it’s often best to choose a bank in your community. A credit union in Hudsonville, MI may be a better fit than a bank in another state. You can visit your local business banker in person whenever you need to, which may give you more peace of mind as you start out.
Do You Need To Register For Taxes?
Michigan business owners are required to file various tax forms, but the specifics depend on the nature of your business. Most entrepreneurs will need an Employer Identification Number (EIN), which allows your business to file for federal taxes. If you’re selling products, you’ll need to obtain a sales tax license. You should also register your business with the state’s treasury department to legally collect these taxes.
Any Michigan business with employees will need to open Unemployment Insurance Account and register for Employee Withholding Tax through the Michigan Department of Licensing and Regulatory Affairs. You might want to obtain these forms when you file a DBA, LLC, or corporation.
How Will You Fulfill Your Products?
Once you meet the above requirements, fulfillment is the next essential factor to consider. You need to make a specific plan for how you’re going to deliver your products to your customers. For example, one common fulfillment method for new small businesses is to look into “bigcommerce dropship.” The dropshipping process involves a business owner who sells products without stocking inventory.
You would instead purchase the products from a third party and ship directly to the customer. Even though you’re the one running the brand, you won’t have to worry about piles of inventory in your home. When selling items like clothing or home goods, this fulfillment process can add ease and automation to your business.
Whether you are living in the bustle of Detroit or the tranquil coast of Lake Michigan, you can create a more fulfilling life by starting a small business. Be sure to take advantage of the business support that the state offers, as well as online resources. With careful planning, you will launch a successful and legal business in no time.