Top Michigan Business Ideas: Start Yours Here
There are a lot of great business ideas to launch in Michigan. According to the State’s SBA, the top three small business industries are Manufacturing, Tourism, and Agriculture.
Michigan is ranked in the top 10 states for its pro-business climate. Lower taxes and cost of living in some areas make the Wolverine state desirable to many startups, and the number is growing. Doing business in Michigan allows you to benefit from the business environment while enjoying some of the best places to live and visit in the United States.
Discover some of the top Michigan business ideas and find out how MyCompanyWorks can help you start any business with a Limited Liability Company (LLC) or Corporation in as little as one business day.
Michigan Manufacturing Opportunities
In 2020, Michigan ranked as one of the 10 largest exporters in the United States. Goods exports accounted for 8.3% of the state‘s Gross Domestic Product (GDP) for the year. Popular companies like Kellogg‘s, Ford Motor Co., Whirlpool, and Carhartt all have manufacturing facilities in the Wolverine State. The top-producing manufacturers make automobile parts, furniture, chemical and metal products, and processed foods. If you‘re looking for an existing business, check out Michigan manufacturing businesses for sale.
Here are some ideas for small-scale manufacturing.
- Wood products, toys, furniture, photo frames
- Ceramic tiles for indoor and outdoor installations
- Eco-friendly candles
Tourism Opportunities in Michigan
The tourism industry is a staple in Michigan. Visitors from all over the world come for both summer and winter sports, rural vacations, and spectacular local foods. Some areas are more seasonal than others, and you can work with existing businesses to keep overhead low.
- Bed & Breakfast that serves local and farm-fresh foods.
- Retail Shops offering seasonal items, outdoor gear, foods, sundries, etc.
- Farm-to-table restaurants
- Ghost kitchens
Agriculture Business Ideas
Michigan is second only to California when it comes to the variety and volume of crops grown in the state. The Wolverine State actually leads the nation in growing crops such as beans, cucumbers, asparagus, squash, and more. Apples are one of the most valuable crops grown in Michigan. Farming isn’t just for large corporations. Much of the US has embraced small-batch and domestic foods, and the market is growing. Country stores are found near fields across the state, where you can buy fresh produce, canned and preserved goods, fresh-baked breads, and other gourmet goodies. You can grow your market nationwide with the help of a simple eCommerce website.
Whether you work with a farming co-op or start your own small farm, Michigan is loaded with agricultural opportunities. Here are just a few profitable small farm ideas.
- Tree nurseries or Christmas tree farms
- Fish farms
- Herb gardens
- Bee farms
- Microgreens farms
Michigan Startup Resources
Starting a Business in Michigan: LLCs, Corporations, DBAs | Small Business Ideas that Fit Your Passion | 6 Basics to Business Entity
Start a Michigan LLC, Corporation, or DBA
1. Name Your Business and Choose an Entity Type
Make a splash with an effective business name
Naming a business may seem simple at first, but it’s important to take some time and research the name. If it’s already in use, you need to think of a new one! An effective name should tell shoppers what you sell, should be easy to remember, and grow with your business over time. Practice with family and friends to ensure your name sounds good and will look good on your marketing materials.
Most Popular Entity Types
- LLC (Limited Liability Company): What’s the best structure for a startup? Most entrepreneurs choose an LLC for its reduced taxes, less paperwork, and flexible ownership. With this setup, you report profit/loss on your personal income tax.
- Corporation: For larger companies, there is a Corporation entity type that offers distinct tax advantages. However, if your business is not large enough for this or you only have one member, then the S-Corporation status applies and taxes can be filed as a sole proprietor. Most small businesses don’t need the added complexity of a Corporation, so speak to an accountant or attorney before forming one.
- DBA: DBA stands for “Doing Business As.” This allows you to start running your business without setting up an LLC or Corporation. A DBA does not offer liability protection, so we recommend applying for an Employer ID Number (EIN) to use in place of your social security number to reduce the risk of identity fraud.
An accountant can help you decide on the best type of entity for your business.
2. Develop an Effective Business Plan
Why do I need a business plan?
A business plan is like a roadmap for your company. A detailed and well-designed business plan can show a level of clarity that ensures you and your investor are on the same page. It also helps to find an investor who shares your vision for success. Once you have a starting budget and goals outlined, you‘ll be able to focus on growth with the right information in front of you. You should definitely plan out a strategy in advance to save time and money in the future. Business plan templates will make the process much simpler and easier to complete. Not only do they allow for customization, but they are also flexible enough to accommodate changes to your company’s needs.
Components of an effective business plan
A good business plan should always start with a summary. This provides a description of the mission and what the company offers. More specific information, like pricing and marketing strategies, should be included in the next section. You’ll need to research the local market, demographics, pricing, and best practices for your specific industry. Banks and investors also want to see projections that show you can be profitable. Indeed.com has a great article on how to forecast revenues and expenses. An effective business plan includes the following sections:
- Executive summary including company description, mission statement, and benefits
- Pricing, marketing, and general sales strategies
- Market research and potential locations
- List of initial products and services
- Revenue and expense forecast for the first year
Learn how to write a business plan that works.
Find Michigan Startup Funding
NOTE: Before applying for any funding, you need to estimate the costs for each stage of your business and make sure you know how much money you need. These numbers will allow you to generate a solid plan and decide if it’s financially possible. Costs depend on the size of your company, number of employees, etc., so it’s best to do some research in advance.
Obviously, startup costs will vary by trade, but you can get a pretty solid idea by researching products, equipment, rent, storage, and business licensing costs before you spend a dime. Check out our Michigan startup packages for real-time fees and turnaround times.
Startup Funding Sources:
- One of the best ways also to fund your startup is by using personal savings, home equity, and retirement accounts. You’re borrowing from yourself, so there is less risk than if you were borrowing money from other people.
- The report from the Federal Reserve Survey of Consumer Finances reveals that about $89 billion each year is borrowed from friends and family for startup purposes. As much as 38% of small business startup funding comes from close friends and family. Friends and relatives should be rewarded for investing in your startup, so think about offering interest on loans or providing subsidized products or services as a thank you. Check out Debt.org for tips on borrowing from friends and relatives.
- Angel investors look for small businesses to help with their wealth. The Internet is full of funding sites like startengine, Gust, and Funded.com to help startups get noticed and raise funding.
- Crowdfunding platforms like IFundWomen, Kickstarter, and SeedInvest offer funding solutions and support to help you kick off a successful fundraising campaign.
TIP: A business with good credit is the best way to attract investors. Even if you don’t have credit, you can build it and make a good impression by paying bills, payroll, taxes, and business fees on time.
Related Helpful Resources
Funding for LLCs and Corporations | Checklist for Business Startups | Learn How to Build Business Credit
3. Apply for an Employer ID Number (EIN)
Every company, whether it is a Corporation or a Limited Liability Company (LLC) needs an EIN. Social Security number, you can apply online with the IRS. International business owners may have to provide additional documents and apply by phone. In order to open a business bank account, hire employees, or file tax returns for your business, you’ll need an Employer Identification Number. An EIN is optional for DBAs if you don’t have employees, but we recommend applying for one to separate business from personal matters and help protect against identity theft.
TIP: Request your EIN when you order any Michigan business package.
4. Open a Business Checking Account
Opening a business account is the best way to keep your money separate. It will also help you establish credit which can make it easier to get loans in the future. Compare all the options and if your original bank doesn’t offer business solutions, you can find a variety of business banking services online. Check out a few different banks to find the best fit for your startup.
Need help? Ask one of our partners about business banking solutions.
5. Find Operating Space
If you’re not running a business that greets customers in person, you may be able to save on overhead costs with a home office. If a home office isn’t an option, you can find commercial space from qualified real estate agents in our Vendor Network.
6. Apply for Licenses and Permits
To do business legally, you’ll need to be licensed in Michigan, and possibly in your city and/or county. Licensing requirements for your business can vary depending on your specific area and type of business, so it’s important to contact state and local business authorities to apply for the correct certifications. You can save time and money when you order a business license compliance package. Just enter a few details and our partners will locate all the necessary licenses and permits for your business.
7. Start Business Insurance Policies
Your company may have additional insurance requirements, but these are the most common policies:
- Business Owners
- Liability Polices
- Workers’ Compensation Insurance
Our insurance partners provide free quotes and exclusive pricing for MyCompanyWorks clients.
8. Organize Accounting and Filing Systems
Managing your books shouldn’t be difficult. There are plenty of accounting software options that are designed to suit regular people like you. If you need a professional accountant or bookkeeper, you can find qualified accounting and bookkeeping firms in our Vendor Network.
All businesses accumulate files and paperwork over time. One of the most efficient ways to keep up with it is by starting a filing system that makes it easy to find and organize documents. Keep records and important documents organized in a paper filing cabinet or cloud storage. Pick a system that’s easy for you to manage. Common Business Filing Categories:
- Customer records – include contact information, contracts, invoices, and other important customer data.
- Employee records – All employee documents, including applications, tax forms, reviews, and disciplinary actions.
- Vendor files – contracts, product catalogs, contact information.
- Legal Documents – legal records, business formation documents, EIN, state tax IDs, etc.
- Tax Documents – tax returns, tax deposit confirmations, receipts.
IMPORTANT: The IRS requires that you keep tax returns for seven years after the filing date. Other paperwork must be kept for three years and there are specific records to keep over the life of your company. Read our guide to keeping business records to learn more.
9. (Optional) Interview and Hire Staff
You can skip to Step 10 if you don’t need to hire employees.
How to Recruit the Right Staff
You can save a lot of money, time, and training resources if you take the time to find the right help. Take advantage of employment platforms like Indeed, LinkedIn, and local job sites to find qualified candidates who are ready to work.
Tips for the Best Recruiting Results:
- Create a company handbook for employees
Written policies and procedures are easy to communicate and enforce with your team. An effective company handbook will outline policies about things like uniforms, conduct, time off, etc. It should answer basic questions and give guidance for more complex matters (who to contact, etc.). To ensure your team understands your expectations, give them time to read the manual and add a signature page to save in employee files. There are loads of free company handbook templates to write a company handbook online.
- Describe each position with a job description
Candidates can tell if a job is right for them by a well-written job description in your recruiting ads. Include items like what tasks will be performed, details about the culture, the general business model, and how you’ll work together. If a job requires heavy lifting or working overnight, tell job seekers upfront so they can make informed decisions and only apply if the job is a good fit for them. The more details, the better for you and potential new hires.
TIP: The average position requires between 6 and 10 interviews.
- Interview and hire candidates
You may see hundreds of applications for one position, so be prepared to weed out the ones with obvious red flags. If you need workers with experience or a specific skillset, pass over candidates that don‘t have it. You‘ll find qualified applicants eventually. The important thing to remember is not to get desperate. Indeed.com offers expert recruiting tips to help you hire the right staff for your business.
Learn about team motivation from our book ‘Startups Made Simple: How to Start, Grow and Systemize Your Dream Business’
10. Start Marketing Your Business
Successful Businesses Have a Custom Website
Your website is one of the first places your potential customers will come across. Recent studies show that 70% of them will be more likely to buy from you if they are able to find an active website that matches what they’re looking for. You should let your customers know when you’re open and how to get in touch with you. Adding your business information to your website is a good start, and you can also register with Google My Business for local listings.
We offer simple and affordable options for small business website solutions. Our Domain, Website, and Email (DEW) package is perfect for startups. Learn more about custom website and eCommerce solutions and get started today!
Start a Michigan Business Today
MyCompanyWorks‘ exclusive Startup Wizard walks you through the process to start LLCs, Corporations, or DBAs in Michigan. Free with every Michigan startup package.
Summary
The Michigan business landscape is growing quickly. Top industries in Michigan include manufacturing, agriculture, and tourism. Startup opportunities like wood shops, candle manufacturers, ghost kitchens, and seasonal shops are all profitable business ideas. Follow these steps, or our Michigan Startup Guide to launch your business idea now.
If you have followed our guide, your business should now have an effective business name, a solid business plan, insurance, and an Employer ID Number so you can hire employees. In order to run an efficient, successful business, you should have a separate bank account for your personal finances. It’s time to write a company handbook and hire qualified employees. Online recruiting sites like LinkedIn and Indeed can help you find the right team. Local recruiting sites are also popular with job seekers, so take advantage of searching the Internet for local recruiting solutions.
Now that your business is formed and your team is in place, it’s time to tell the world you‘re open! With a custom website, domain name, and email address, you’ll be able to attract more customers.
Seventy percent of consumers like to buy from businesses with an active and updated website. We offer affordable website, email, and domain solutions to get you started quickly. MyCompanyWorks can form Michigan LLCs, Corporations, and DBAs, usually in as little as one business day. Check out our blog for more helpful guides, resources, and business ideas.
Michigan Startup FAQs
Our Frequently Asked Questions (FAQ) page answers many of the most common small business questions. Our expert support team is also standing by during regular business hours. Contact us for package options and more information.
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