Business Posts

4 Steps to Starting a Business in Illinois

You have assessed the feasibility of your business idea and created a plan to get started. What comes next? How do you turn your idea into a legally recognized Illinois business? Here are the four things you should do first.

1. Choose an organization structure for your business.

There are several ways to organize businesses in Illinois, each with its own legal and tax implications. Your form of business determines which income tax return forms you must file. 

The most common forms of business are:

  1. Sole proprietor: A person who owns the business and is personally responsible for its debts.
  2. Partnership: An arrangement in which two or more individuals share the profits and liabilities of a business venture. Types of partnerships include general partnerships, limited partnerships, limited liability partnerships, or limited liability companies.
  3. Corporation: A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses.

Before selecting a business type, you may want to consult an attorney or accountant for assistance in determining which one is best for your business. The library also has many excellent books covering the legal requirements on each of these formats; look for titles published by Nolo.

2. Decide on a business model or format.

Like your organization structure, your business format will have legal and tax implications depending on where you do business and what kind of product or service you are bringing to market. When choosing a business format, consider the following:

  • Will you be making a product or offering a service?
  • Will your customers find you online or at a brick-and-mortar store location?

Other options for budding startups might include creating a new product and selling it to another company or buying an established business that you might take over and operate or buy a franchise.

3. Register your business with the state of Illinois.

When the operating business name is different from the owner’s full legal name(s), the Illinois Assumed Name Act requires sole proprietorships and general partnerships to register the business name with the county clerk's office of the county where they reside.

In Illinois, many businesses are required to be registered and/or licensed by the Illinois Department of Revenue. If you plan to hire employees, buy or sell products wholesale or retail, or manufacture goods, you must register with the IDOR by applying for a tax account number on the MyTax Illinois website and submitting Form Reg-1: Illinois Business Registration Application, online or by mail. Registration should take 2-3 days and will cost approximately $150. You will receive a certificate of registration that must be displayed in your place of business. An Employer Identification Number (EIN) also will be assigned.

Depending on your business type, you may also need specialized registrations (e.g. a liquor license or a professional license). The Illinois Department of Financial and Professional Regulation is the main licensing agency for the State of Illinois for most professions. Individuals must be licensed prior to conducting business as one of the professions listed on their website.

4. Obtain the necessary licenses and permits.

A business license from a city, village, or county may be required in certain circumstances. The license gives you the right to conduct business activities in that location. A license may not be necessary if customers do not visit your place of business. (For example, online-only companies probably will not need a local license.) The extent of the application process will depend on a business’ reach (local, state, national). Be sure to check with your locality, as heavy fines may be assessed if you do not obtain the required license.

Some municipalities and counties impose their own taxes in addition to the state and federal taxes that most businesses are responsible for. New businesses should contact their local revenue department to determine if additional taxes apply to their business activities. Many communities restrict advertising, regulate pricing, or require zoning permits. Contact your city or county clerk's office for information on local restrictions.

For more information on starting a business in Illinois, check out the NaperLaunch BizVids Startup in Illinois series or register for an upcoming NaperLaunch Academy workshop. You can also make a one-on-one appointment with a NaperLaunch business librarian.

Posted: 
Thursday, December 31, 2020 - 09:15

Business Startup Help

Let us say you have had an idea rattling around in your head for a few years about how to improve a basic service or product that you have used in the past. You are pretty sure you have the knowledge and skill to deliver that enhanced service or product. Now you are wondering how to go about commercializing it.

Almost every business startup entrepreneur has gone down a similar path of having a great idea and wondering how to bring it to market. Occasionally, lightning strikes and the idea is truly a zero-to-one proposition–there was no one doing it and suddenly there is one doing it. However, those are few and far between. In most instances, the new idea is an enhancement or improvement over current services or products.

A number of organizations exist to support this type of would-be entrepreneur. Many years ago, states and local governments began establishing support networks to help people commercialize their ideas. The U.S. Small Business Administration is a major player in the small business support network; the Small Business Development Centers and the SCORE volunteer network are two examples of SBA efforts.

In recent years, more and more independent incubators and accelerators have popped up in metropolitan areas or near research universities across the nation. Public libraries have even started to engage in this support effort; the Naperville Public Library’s NaperLaunch Business Services Center is a prime example of libraries getting into the mix.

Usually, a startup founder already has a good idea; business acumen may be the thing that is needed most. That kind of help can generally be provided by the types of organizations mentioned above. One of the advantages of these groups is the personal experience of the people involved. Former founders like to share their expertise, and many of them can be engaged through participation at an incubator, accelerator, business development center or similar facility.

At the NaperLaunch Business Services Center, for instance, the focus is on teaching and sharing this kind of expertise. A partnership with experienced SCORE volunteers provides expert mentoring services to augment the library’s vast print and online information resources. This emphasis on authoritative information resources and expert mentors are just two of the things that set NaperLaunch apart from other startup organizations; another is the fact that these services are provided free of charge.

Most currently available programs assist startups in the very early stages of developing an idea, identifying a customer problem and creating a solution that can be delivered profitably. At NaperLaunch, startups are instructed and coached through these steps leading to development of a unique value proposition. The NaperLaunch Academy curriculum provides specific instruction on how to take these idea-development steps and then complete a break-even analysis, develop a business plan and create a marketing strategy.

In the past year, it became obvious that some NaperLaunch members had moved beyond the startup stage and needed new ways to advance their businesses. In response, several Master Mind groups were organized that have attracted productive founders to participate and continue their progress.

Program participants have voiced appreciation for the assistance gained. It is a testament to the philosophy of “giving back” that so many individuals have provided so much startup help to local entrepreneurs. In these ways the mission of NaperLaunch, to foster business success, is fulfilled.

Posted: 
Tuesday, November 17, 2020 - 08:45

The Lean Startup

A major part of the mission of NaperLaunch is to foster business success. Our intent is to help business founders find the information they need to be successful in launching and operating a business.

We believe in a process-driven approach to make certain that important steps and issues are at least thought through and considered, if not fully executed. Over the years we have adopted some basic concepts from the best thinkers in the world of entrepreneurship. Those concepts are at the core of the startup process we try to follow.

Many of the concepts we adopted are based on the idea of “lean startup,” originated by Steve Blank and enhanced over many years by Eric Ries and others. We have also tried to adopt the concepts of the Lean Business Model Canvas originally put forth by Ash Mauriya. Each of these key thought leaders has authored books on the subject, all of which are available at the Naperville Public Library.

To bring a new offering to market, we always encourage a startup founder to consider what Eric Ries calls the Build-Measure-Feedback loop. This process is all about identifying a customer need and preparing a solution, which becomes your product or service. Once a minimum viable product is created, it is time to measure customer reactions and obtain feedback. Based on these steps, a founder learns quickly what will be successful and what will not. As feedback is received, a needed pivot may be revealed. This leads to a more perfect match of the market need to the product–market and product fit. The lean startup process gets to market match, market success and potential scale-up more quickly than other approaches.

To learn more about these concepts, please see The Lean Startup website.

If you are a startup founder interested in a curriculum of study in this process-driven lean startup approach, check out the NaperLaunch Academy. Our next six-workshop series begins on Tuesday, October 20. For more information and to register, visit our website.

We wish you much success in your entrepreneurial journey!


book cover

The Four Steps to the Epiphany: Successful Strategies for Products that Win by Steve Blank

book cover

The Lean Startup by Eric Ries

book cover

Running Lean: Iterate from Plan A to a Plan That Works by Ash Maurya


Posted: 
Friday, October 9, 2020 - 12:30