Michigan is a great place to start a business with its pro-business environment, low start-up costs, and lenient business tax laws. Whether you have an idea you want to explore or you want to try something different, you may wonder if starting a business is difficult. 

Although there are many steps to starting your own business, it doesn’t have to be overly complicated. If you’ve never started a business in Michigan before, use this comprehensive step-by-step guide. With this guide, you will be well on your way to successfully starting your own business.

Step 1: Choose Your Idea

The first step when starting a business in Michigan is choosing your idea. This idea forms the foundations of your business and does not need to be overly thought-out at this stage in the planning process.

To think of a good business idea, try to answer these idea-stimulating questions:

  • Do you have any hobbies, skills, or interests?
  • Can these hobbies, skills, and interests make you money?
  • Can you see yourself enjoying running this business for a long time?
  • Is there a business already out there like yours?
  • Is there a gap in the market for your business?
  • How will your business differentiate from those already existing?
  • What consumer problem does your business solve?

These questions should help you develop a business idea.

Step 2: Pick a Name

Picking a name for your business is very important. This is because the business name is what most people will see and hear first. Their first impression of your business will often influence whether they want to support it.

When picking a name for your business, be sure it is 100% unique. You cannot legally have a business name already registered with the state. To check if your chosen business name is available, run a search on the Michigan Secretary of State website.

While the name you choose should be unique, it should also be somewhat relevant to the business industry you are based in and should give people an idea of what products or services you are offering.

If you are struggling to pick a name for your business, try out these helpful naming methods:

  • Use social media to create polls and surveys and ask people to vote for their favorite name.
  • Hold a brainstorming session with friends and family.
  • Use an online name generator. These are free and can give you unique names.

Step 3: Write Your Business Plan

Once you have decided what business you’re going to start and what you will name it, you should write out your business plan. A good business plan will include all your research and planning, the financial details, and how you plan on running the business. It is essentially a guide to your business.

While there are no set requirements in Michigan stating what needs to go into a business plan, here are some questions that your business plan should answer:

  • What is your business, and what services are you offering?
  • Why have you started the business?
  • What problem does your business solve for consumers?
  • What businesses in Michigan are similar to yours?
  • Who is your target audience?
  • How do you plan on turning your target audience into paying customers?
  • What are the financial costs involved in starting the business?
  • How much will you need to make to break even?
  • Will you need to hire employees?
  • What are your financial goals and predictions for the first couple of years?

You will want to ensure your business plan is as thorough as it can be, as business plans are also great marketing tools if you wish to attract potential investors. 

Step 4: Get Funding

To start a business, you need capital. And unless you have the funds to do so yourself, you will need to acquire funding for the company through different means. The best way to get funding for your business is through a grant, loan, or investor.


Michigan holds the MI Business Grant Program to assist businesses. You can check their website to see if your business meets their criteria. Grants are a popular method of attaining funding as this is money that you do not have to pay back. However, since they come with fierce competition and stringent requirements, you may not always qualify.


If your business does not qualify for a grant, another alternative is to apply for a loan. Michigan has a small business loan program available that is worth checking out. Alternatively, you can apply for a loan from your bank. Family and friends can help too, but make sure you get the agreement in writing!


If you are happy with parting with some shares in your business, you may be interested in having an investor help with start-up costs. You could even have friends and family invest in your business.

Step 5: Choose a Business Structure

Choosing the correct structure for your business is vital because each structure comes with its own benefits.

Sole Proprietorship

This informal business structure is the simplest and easiest business structure to choose from. Sole proprietorships are businesses with only one owner, and there is no separation between the business and the owner. This structure is the best business structure for low-risk companies.


A partnership is also an informal business structure, as there is no separation between the owner’s assets and the business. However, the difference between a partnership and a sole proprietorship is that a partnership has more than one business owner with equal shares in the business.

Limited Liability Company

The limited liability company, or LLC, is one of the most commonly used business structures for small businesses. This is because this business structure is a mixture between a sole proprietorship and a corporation, offering the best of both worlds. An LLC offers the flexibility and ease of a sole proprietorship or partnership with the liability protection of a corporation.

C or S Corporation

This is the most formal business structure available and is usually chosen by large companies with multiple shareholders. Corporations are separate entities from the business owners, and this business structure offers many tax benefits to companies.

Step 6: Register Your Business 

After choosing your business structure, you may need to register it with the state of Michigan before you can begin trading.

Sole Proprietorship

This business structure does not need to be registered with the state of Michigan. However, if you wish to operate under an assumed name, you will need to file this name with the state. More information about this filing process can be found on the Department of Insurance and Financial Services website


You do not need to register this business structure either. However, it is recommended that all owners sign a partnership agreement. This agreement does not need to be submitted to the state.

If you wish to operate under a different name, you must file the assumed name with the state of Michigan using their website.

Limited Liability Company

Registering your LLC is very simple. To do so, you must complete and submit the Articles of Organization to the Michigan Corporations Division. The fee to do this is $50.


To register a corporation, you must complete the Certificate of Organization and submit it to the Michigan Corporations Division. There is a flat fee of $10 plus additional fees depending on the number of shareholders. The lowest amount is $50 for 1 – 60,000 shareholders.

Step 7: Set Up Your Finances & Accounting 

To set up your finances, you should open a bank account for the business, apply for credit cards, and set up a payment method for customers. If you plan to have employees, you will need a payroll system to ensure their salaries and taxes are correct.

Finances and taxes can get complicated, so it is highly recommended to hire a professional accountant to take care of this side of the business for you. You will be especially thankful for the help when tax season rolls around. Plus, they can help you avoid costly mistakes that may result in high fees or overpaying on taxes.

Step 8: Get Business Insurance 

While there are many different insurance policies to choose from, you should at least invest in a general insurance policy. This broad policy will cover the day-to-day running of the business, including any injuries or damages that occur on the business’s premises.

Here are some other insurance policies you can choose from:

  • Commercial auto insurance
  • Commercial property insurance
  • Workers compensation insurance
  • Professional liability insurance
  • Business owner’s insurance

Consult a business attorney or broker if you are unsure about what kind of insurance to get for your business.

Step 9: Obtain Any Permits or Licenses Needed

The state of Michigan does not issue state-wide general business licenses. However, depending on the nature of your business, you may need to apply for specific licenses to operate legally. Check your local government’s office for more details.

In addition, if your business plans on collecting sales tax, you must apply for a sales tax license. You can do this through the Michigan Business One Stop website.

Step 10: Build a Website

Having a business website for your business is a must nowadays, and building one has never been easier.

When building a website, there are a couple of things you need to keep in mind:

  • Check that your website domain name is still available before you get started.
  • Make sure that your business name is easy to read.
  • Don’t stuff your webpage with unnecessary images, videos, and GIFs, as this can make the loading times slow.
  • Keep your content up to date.
  • Ensure all font is simple and easy to read.
  • Include contact details.

Step 11: Hire Employees (If Any)

If you need to hire employees to assist with running the business, you need to make sure that you report any new hire to the Michigan New Hires Reporting Center Employer Services Portal. This needs to be done within 20 days of the hire date.

There is no fee to report new hires. To start the process, you must create an account on the portal.

Step 12: Market Your Business

The final step in starting a business in Michigan is to market your business. Nowadays, there are many different and creative ways to market your business successfully, regardless of your budget. The one thing you need to remember when marketing your business is to be consistent, as this is the best way to build recognition.

Here are some of the easiest methods to market your business:

  • Make use of your business website.
  • Advertise and engage with customers on social media.
  • Create a Google Business profile and advertise on Google.
  • Attend local networking events and expos.
  • Host fun events.
  • Run competitions and giveaways.
  • Advertise on your local radio or newspaper.
  • Advertise for free on social media

If you would rather focus your energy elsewhere on your business, you can always hire a marketing expert to take care of this aspect of the business for you.

Scroll to Top