3.31.2021

How to Start a Business in Illinois

Written by Austin Chegini

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If you’re ready to start a business in Illinois but aren’t sure where to begin, then you’ve come to the right place. We take you step by step through the process of starting a business in Illinois, including items like creating a good business plan, tax and legal requirements, and hiring employees so you can hit the ground running.

Put a Plan in Place

Every good business starts with a solid business plan. Be sure to touch upon the following:

  • What you want to sell (service or product)
  • How you intend to sell (online or brick-and-mortar storefront)
  • Your target market
  • How much money you’ll need to get started
  • Marketing strategies and budget
  • Growing your business

Once you’ve settled on your goals for each of the above areas, and have a clear plan for how to meet each one, you’ll be able to show investors that you’re serious about starting a business.

Not only that, but having clearly defined goals will give you the direction you need to keep moving forward with your business launch.

If you’re feeling overwhelmed, you can check out the state of Illinois website, which includes a step-by-step guide to get you started on a great business plan.

Pick Your Business Structure

While it might seem like just a formality, selecting the right structure for your business will ensure you pay the proper taxes and will affect the types of insurance, forms, and business licenses you’ll need to operate in the state of Illinois. It can also protect your personal assets from litigation and debt collectors.

You have several options when it comes to structuring your business, including:

  • Sole proprietorship
  • Partnership (LP or LLP)
  • Limited Liability Company (LLC)
  • Corporations (B, C, S types, Nonprofit)

Accidentally choosing the wrong structure for your business entity can come back to haunt you, so if you’re unsure which business structure is right for you, speak to a local business attorney for help getting organized. 

Get Registered in Illinois

While it’s tempting to start selling goods and services right away, you can’t legally operate a business in Illinois without first registering with the Illinois Department of Revenue. 

You can easily register online. Depending on the type of business you have, you may also need to complete one of the following additional schedules:

  • Liquor
  • Cigarette and Tobacco Products
  • Illinois Business Site Location
  • Illinois Cigarette Manufacturer’s Representative
  • Owner/Officer Information
  • Responsible Party Information

Most businesses that operate in Illinois are required to have a registered agent—someone who can accept service of process for the company. You can specify a registered agent on the registration paperwork for your business type.

Understand that with corporations, you’ll have the extra step of submitting articles of incorporation to the Illinois Secretary of State. 

LLCs will need to file articles of organization with the Secretary of State.

You may be required to file additional formation documents, depending on the business structure you choose. If you’re unsure which documents need to be filed, it may be a good idea to consult with a business attorney licensed in the state of Illinois.

Once you file the articles (if required for your business) and complete the registration process with the state, you’ll want to get a federal tax ID number. (This may be done before registration, as well.)

Obtain a Federal Tax ID Number

Most Illinois businesses will need to have a Federal Employer Identification Number, or EIN for short.

This makes it possible for you to pay state and federal (and in some cases, local) taxes for your business.

While it sounds intimidating, the process to get an EIN is fairly simple. In fact, you can get one online through the IRS website.

There’s one more step before you’re ready to welcome employees (or customers) into your new business, and that’s obtaining the required tax licenses and applicable business licenses/permits.

Obtain Illinois Tax Account(s) and Permits/Licenses

There are several types of Illinois tax permits/licenses you may be required to obtain at the state level, depending on the type of business you have. In addition, many counties and local municipalities require additional tax permits/licenses. A few of these may include:

  • Electricity Tax
  • Gas Use Tax
  • Telecommunications Tax

If you provide certain services or work in certain professions, you’ll need an additional license from the Illinois Department of Financial and Professional Regulation. A few of these specialized professions include, but aren’t limited to:

  • Audiologists
  • Funeral Directors
  • Locksmiths
  • Massage Therapists
  • Public Accountants
  • Roofing Contractors
  • Surgeons
  • Wholesale Drug Distributors

Once you’ve obtained all of the necessary federal, state, and local tax accounts, licenses, and permits, you’re ready to think about hiring employees to staff your business and keep things running smoothly behind the scenes.

Hiring Employees

If you plan to offer services or goods to customers, you’ll most likely need to hire employees, whether you need cashiers, customer service reps, or even someone to provide web content for your business websites and social media, etc.

It’s important to make sure your work environment is a safe one for employees, and that you’re in compliance with all applicable employment laws in the state of Illinois. These include wage and labor laws which cover the basics of how long employees can work without breaks, how long breaks should be, how much employees should be paid, and who’s eligible for overtime, among others.

One key factor to budget for is unemployment insurance, which is required for all Illinois employers with one or more employees (for at least 20 weeks), or who have paid at least $1,500 in employee wages for any quarter.

Depending on the type of business you have, you may also be required to carry worker’s compensation insurance to cover any injuries that employees may incur while on the clock or on the job site.

Business Essentials

Nowadays, nearly every successful business needs to have a standout website and e-commerce options, and of course, a strong marketing strategy is key. If no one hears about your business, you won’t have any customers no matter how innovative your product is.

You’ll also need a great location if you’ve got a brick-and-mortar storefront. You may have the best products and the best prices in town, but if no one can find you, customers won’t be pounding down your door.

But what often gets overlooked is a robust and secure point of sale system. After all, it doesn’t do much good to get customers in the door (or to your online checkout screen) if you can’t provide them with safe and secure payment methods.

Epos Now offers several great solutions for businesses, including mobile point-of-sale options that run on Android and Apple tablets. With the latest in POS technology, you can process all payment types, including debit and credit cards, gift cards, and even contactless options.

Whether you have the hardware in place already and only need POS software, or you need an entire system, Epos Now has a solution for you. 

Call us today to learn more about getting a POS for your new business.