How to Start a Business in Illinois

With the 5th-largest economy in the nation, Illinois is a great place to launch your business. Start your business today with our simple step-by-step guide and get on the fast track to financial and personal independence. If you get stuck along the way, connect with a business resources in your local area for help.

To Start a Business in Illinois, follow these steps:

Step 1: Choose the Right Business Idea


The first step toward business ownership is deciding what kind of business to start. Look for an idea that suits your interests, your personal goals, and your natural abilities. This will help you stay motivated when the going gets tough and will greatly improve your odds of success. Need inspiration? Here were the most popular ideas among our Illinois visitors in 2017:

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Find the Right Business Idea for You

Our free Business Ideas Tool will help you identify great businesses that match your interests and lifestyle.

Business Ideas
Tool

Step 2: Plan Your Business


Successful businesses are built through careful planning. Before committing a significant amount of money and other resources toward your business, critically analyze your idea and create a game plan. At a minimum, you should have good answers to the following questions.

Product Development
What problem does your business solve? What will set your product or service apart from the competition?

Sales & Marketing
Who are your potential customers? How will you get their attention and convert them into buyers?

People and Partnerships
What roles will you need to hire and what professional relationships will you need to form in order to succeed?

Financial Planning
How many clients or sales will you need in order to break even? How much money will it take to get there, and where will you get the funding?

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Start Planning

Our Business Planning Guide helps you analyze your business idea and gets you access to free planning tools.

Need Help? Find organizations in your local area that can assist you with planning.

Step 3: Form your Business


Registering your company as an Illinois business entity, such as an LLC or a Corporation, has two major advantages:

  • Increased credibility
  • Protection from personal liability in the event your business is sued

For most small businesses, registering an LLC is a great option. In comparison to other business entities, LLCs are easier to set up and manage and they have favorable tax treatment. You can set up an LLC in Illinois for $500.

If you choose not to register your company as a business entity, you will be held personally responsible for the debts and liabilities of your business. In addition, unregistered business owners may need to file a Trade Name, also known as a "DBA." Find out if your business is required to file a DBA.

Secure your Domain

We recommend that you check to see if the business name you are planning is available as a web domain. Even if you aren't ready to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.

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Step 4: Register for Taxes


With limited exceptions, most businesses require an Employer Identification Number (EIN), also known as a Tax ID Number. An EIN is used to identify a business in its federal tax filings. Without an EIN, you can't hire employees or open a business bank account.

Obtain an EIN

You should also be aware of important illinois taxes that may apply to you business:

  • If you are selling a physical product, you’ll typically need to register for Illinois Sales Tax.
  • If you hire employees, you will need to register for Unemployment Insurance Tax and Employee Withholding Tax on behalf of your employees.
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Register for Illinois State Taxes

Sales Tax | Employer Tax

Step 5: Create Business Banking and Credit Accounts


Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.
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Recommended: Get $200 when you open a business checking account with Chase. Learn more.

2. Getting a business credit card:

  • Helps you separate personal and business expenses.
  • Builds your company's credit history, which can be useful to raise capital later on.

Step 6: Set Up Accounting


An accounting system helps you track the performance of your business and simplifies annual tax filings. Quality accounting software lets you download your bank and credit card transactions, making accounting fast and easy. Learn more about the importance of accounting and how to get started with accounting today.

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Recommended: QuickBooks has all the accounting features your small business will need.

Try QuickBooks for free

Step 7: Obtain Permits and Licenses


To operate your new business legally, you will need to comply with federal, state, and local government regulations. In many cases, this involves obtaining one or more business permits and/or licenses. For example, a restaurant will likely need health permits, building permits, signage permits, etc.

Step 8: Get Insured


Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance you should consider are:

We recommend that all small businesses, including home-based businesses, purchase a general liability policy. Businesses selling professional advice or services, such as consulting and accounting firms, should also consider a professional liability policy. In Illinois, businesses with one or more employees, including corporate officers and LLC members, are required by law to have workers compensation insurance.

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Our recommended insurance provider can set you up with an insurance policy that is right for your business

Get a Quote

Step 9: Define Your Brand


The strongest and most memorable businesses are built on a solid brand.

When developing your brand, think about what your business stands for. What are the core values that drive your business? Customers and clients are looking for companies that have a compelling brand, as much as they are shopping for high quality products and services.

Your business name is the cornerstone of good branding and a successful business. To learn more about creating the best name for your business, read our How to Name a Business guide.

Step 10: Establish a Web Presence


A professional website is critical to the long-term success of your business, regardless of what industry you are in. A website allows potential customers to find your business online and discover the products or services you offer, and it also enhances your business’ credibility.

In addition to a website, you should also consider other avenues for promoting your business online:

  • Setting up social media profiles (Facebook, Twitter, etc)
  • Creating accounts on review sites (Yelp, Google Reviews, etc)
  • Registering for a local Google profile
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More than ever, people are looking for reviews before doing business. Yelp is an important aspect of social validation for your business, claim your page today and get $300 in Yelp advertising credit.

Sign up for our Business Center

Sign up for a free Business Center account for access to tools, legal documents, and discounts that will help you start and grow your business

Signup Now

Get Help From Local Resources

To help you start your business, we have identified the best resources across the state of Illinois that can support you in your entrepreneurial endeavors.

Select your Region

Chicago Local Resources

Duman Entrepreneurship Center

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Fundraising

Description

Duman Entrepreneurship Center offers one-on-one business advice on a variety of topics. They offer workshops, peer-based entrepreneurial training, and mentorship. Their six-week startup accelerator program enables budding entrepreneurs to form a complete business plan and establish a concept feasibility. Funding is also available to teams that can present a business plan and a 12-month cash flow projection.

Restrictions

There is a nominal fee for attending workshops or subsequent advising.

CONTACT INFORMATION:

216 W Jackson Blvd, Suite 700
Chicago, IL 60606
855-463-6587
duman@jvschicago.org

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Chicago Resources

East St Louis Local Resources

Illinois SBDC and ITC at SIU-E-East St Louis SBDC

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning
  • Financial

Offers Free Service

Description

The greatest strength of the SBDC is their free, confidential, 1-on-1 business mentoring for anyone who seeks it. Sometimes in order to be considered for mentoring from one of their professional business advisors, you may have to attend a class/workshop or at least present your business plan. SBDC's are located all throughout the state and you should use the SBDC closest to your location if possible, but you can often transfer to a different location if they do not fit your needs.

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East St Louis Resources

Peoria Local Resources

Brave Launch

Here are the Principle Service Areas:

  • Mentoring
  • Business Planning

Description

Brave Launch is an intensive, 7-week program run by Bradley University that takes entrepreneurship teams and gives them the mentoring and knowledge to launch a business. The program is fee-based, not equity-based, so teams retain full ownership of their company, and is open to ventures in any industry. The classes heavily feature mentorship and are very interactive, so don't just expect a series of lectures! Entrepreneurs who already have an idea refined and are planning to launch should apply. Classes take place at the Next Innovation Center.

Restrictions

Accepts teams of 2-4 founders.

CONTACT INFORMATION:

801 W Main Street
Peoria, IL 61606
309-677-4321
tce@bradley.edu

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Peoria Resources

Rockford Local Resources

EIGERlab

Here are the Principle Service Areas:

  • Mentoring
  • Coworking
  • Product Development

Description

EIGERlab is a one-stop solution for anyone looking to start or grow a business, whether you’re just starting with an idea, or you’re looking to increase profits in an already successful company. EIGERlab offers a co-working space, a business acceleration program, and product development to help you turn your idea or invention into a viable product. While the organization focuses on product development assistance, they have the resources to help entrepreneurs enter virtually any industry.

CONTACT INFORMATION:

8500 E State St.
Rockford, IL 61108
815-298-0136
mcobert@eigerlab.org

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Rockford Resources

Springfield Local Resources

Innovate Springfield

Here are the Principle Service Areas:

  • Mentoring
  • Coworking
  • Networking

Accepts Walks In

Description

Innovate Springfield is primarily a co-working space for small businesses and entrepreneurs. Innovate Springfield also offers workshops, connections to legal and financial consulting, and a network of like-minded entrepreneurs with whom to share your experiences. Advisors host frequent “office hours” where entrepreneurs can talk about problems their facing and receive some informal consulting. A subsidized incubator program is available to startups that offers reduced rates and higher levels of business assistance.

CONTACT INFORMATION:

15 South Old State Capitol Plaza
Springfield, IL 62701
217-670-1770
kdavison@innovatespringfield.org

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Springfield Resources