Start a Business in Chicago, IL: When it comes to starting a business, entrepreneurs must look for the place with the most potential. Whether a corporation, sole proprietorship, partnership, or LLC, having a business in Chicago, IL, is a plus for any entrepreneur. In general, setting up any form of business in Illinois, US, is the initial step to building an international brand.
Entrepreneurs across the globe are interested in starting and expanding their businesses in Chicago, IL. With an urban population of 8586888 (estimate), the city has a lot to offer to all emerging entrepreneurs. The main reason for this is the economic environment and flexibility of the business structure in Illinois. Like most places in the US, Chicago, IL also offers business structures for all types of entrepreneurs; no matter what business you want to do, there’s a perfect solution for you. If you want to start limited liability company (LLC) or a corporation, or a sole proprietorship, Chicago, IL has a proper business environment for all.
In this article, you will read about how to start a business in Chicago and why you should choose Chicago to start and run your business. We recommend you check below the important facts about Chicago, IL; these might help you.
On this page, you’ll learn about the following:
- Chicago, IL Household Income Statistics
- Chicago, IL Education & Labor force Facts
- Chicago, IL Demographics
- How to Start a Business in Chicago, IL
- Other Things to do After Starting Your Business
- Important Chicago Stats for Starting a Business
- Reasons to Start a Business in Chicago
- FAQ About Chicago, IL
Chicago, IL Household Income Statistics
|Chicago Median household income||62097 USD|
|Chicago households with dual income earners||54 %|
|Chicago households $150K+ Income||16.9 %|
|Chicago households $100K+ Income||31.2 %|
|Chicago households $100-150K Income||14.3 %|
|Chicago households $75-100K+ Income||11.5 %|
|Chicago households $50-75K+ Income||15.3 %|
|Chicago households $35-50K+ Income||10.7 %|
|Chicago households $25-35K+ Income||8.4 %|
Chicago, IL Education & Labor force Facts
|Chicago residents with a bachelor’s degree (or equivalent)||24 %|
|Chicago residents with at least a 4-year degree||41.1 %|
|Chicago residents with a graduate degree||17.1 %|
|Chicago residents with a high school diploma but no more||22 %|
|Chicago residents with less than high school education||14.1 %|
|Chicago residents with some college but no more||22.8 %|
|Chicago residents with a Bachelor’s degree or higher (STEM fields)||42.4 %|
|Chicago households that own (rather than rent) their residence||45.3 %|
|Chicago residents 16 and older in the labor force||67.2 %|
|Chicago residents unemployed||8.1 %|
Chicago, IL Demographics
|Chicago residents aged 0-9||11.5 %|
|Chicago residents aged 10-19||11.3 %|
|Chicago residents aged 20-29||18 %|
|Chicago residents aged 30-39||17.2 %|
|Chicago residents aged 40-49||12.5 %|
|Chicago residents aged 50-59||11.6 %|
|Chicago residents aged 60-69||9.5 %|
|Chicago residents aged 70-79||5.4 %|
|Chicago residents aged over 80||3 %|
|The average size of resident families in Chicago, IL||3.37|
|Estimated population per square kilometer in Chicago, IL||4576|
|Chicago, IL urban population (estimate)||8586888|
|Chicago, IL municipal population (estimate)||2699347|
Now that you know what makes Chicago of Illinois good for business, let’s get started with the exact steps on how to start a business in Chicago.
How to Start a Business in Chicago, IL
Starting a business in Chicago, IL, needs planning, financial decisions, legal procedures, and a handful of other things. Be it a corporation, sole proprietorship, partnership, or LLC in Illinois, you must go through the following steps. These steps are general steps. They are subject to change depending on the structure of your business.Generally, starting a Limited Liability Company is easy to form. Read our guide on how to start an LLC before you start your own business. Here are the steps to set up your business in Chicago.
Step 0: Decide on What Business to Start
This is the first thing you work on, the type of business you want to start in Chicago. Depending on that, you need to make your business plan. Apart from the legal documentation and process, you must include the following points in your business plan,
- Through market research on demand trend
- Complete Budget plan – funding your business. If you’re planning to start an LLC, then take a look at the cost of LLC
- What competitors are doing
- SWOT Analysis – check what your Strengths, Weaknesses, Opportunities, and Threats are
- Your targeted buyers
Once you have the entire plan with you, you can continue working on the legal structure of your business. LLCBuddy will guide you through the legal process of forming an LLC for your business. It’s very likely that you have already done this step 0, so that we won’t go deep into this step, let’s move to step 1.
Step 1: Choose Your Business Structure
The very first step after you decide on what type of business you want to start is to choose what type of business structure you want to form. You can form an LLC, a sole proprietorship, a corporation, or a partnership. Each type of structure has different rules and regulations. For example, if you want to start a Illinois LLC, there are different types of tax and fee structures. An LLC formation is similar to forming a sole proprietorship. On the other hand, forming a corporation is much more complicated. The tax and fee structure is completely different in corporation formation.
Step 2: Name Your Business
The next step in forming a business is to give it an appropriate name. Having a business name is not so easy task. You cannot pick a random name for your company. One has to follow proper naming guidelines before they name their company. Besides, before you settle a name, you must check if the name you are looking for is available to use. You can visit the official government site of Illinois to do the Illinois LLC name search before you pick the available name. Below are some of the naming rules you need to follow,
- You cannot name your business that has words or phrases like Bank, University, Government, or anything that can confuse people with a government sector.
- If you are forming an LLC in Illinois, then you must include words like “LLC,” “LC,” “LLC,” “Liability Company,” and “L.L.C.” If it is an LLP, then you must include “LLP” in your business name.
- The name should reflect the nature of your business. Any name that can confuse people should not be picked.
- You can check if the name of your company is available. Through the business name search process, you can search if the desired name is available for use or not.
- You can reserve your business name for a certain time before you form your business in Chicago, IL by filing a name reservation application.
The above-mentioned points are basic naming rules that all businesses have to follow while naming their company. As mentioned above, these rules are subjected to change depending on the structure of the business.
Step 3: Get a Registered Agent
A Registered Agent is a person who receives all types of legal and official documents on behalf of the business. Whether a suit against your company or formation-related documents from the state, a Illinois LLC Registered Agent is responsible for receiving these documents at his/her official address. In general, anyone who has the right to conduct business in Chicago can be a registered agent. However, there are some requirements to becoming a registered agent.
- The person has to be 18+ years of age.
- Must be a citizen of the Illinois
- Must have a physical street address in the Illinois
- Must have legal rights to conduct business in the Illinois
Anyone who fulfills the requirements can be a registered agent. Also, anyone from the company, your spouse, any relative, or yourself can be a registered agent. But, it is recommended that you hire a professional registered agent to look after your documentation. You can choose from the best LLC services that also offer registered agent for LLCs.
Step 4: Register Your Business
The next step is to register your business under the Secretary of State, Illinois. The Articles of Organization (or certificate of incorporation) of your company should be submitted online, by mail, in person, or by fax to the Illinois SOS. You need to pay the state filing fee either by Credit Card or by check to the SOS while registering your business in the Chicago, IL. Your Illinois LLC articles of organization should have the following details about your business
- Company/Business name, address
- Registered Agent Name, address
- Member-managed or manager-managed (in case of LLC)
- Type of business
Depending on the type of business structure, you may have to add some more information to the formation document.
Step 5: Write the Operating Agreement
An operating agreement is a document that has all the structural information of your business. In most states, it is not mandatory to create an operating agreement. However, it is highly recommended to have one as an internal document. This document records information such as,
- About Business
- Members and management
- Capital contribution
- Profit Distribution
- Change of membership
In future, if any member wants to leave the company or you want to dissolve the business, then the Illinois operating agreement has everything recorded, from clauses to contributions.
Step 6: Obtain EIN
EIN or Employer Identification Number is required to file taxes, open a business bank account, and if your business has employees. EIN can be obtained from IRS. It is a 9-digit number similar to Social Security Number. However, EIN is different from SSN. It is solely used for business purposes, especially for general tax filing. You have to fill out the form and submit it to the IRS website. It does not cost you anything to obtain EIN.
Step 7: Get Business Bank Accounts
Once you obtain the EIN for your business, you are free to open a business account in the US. Having a US business bank account can ease your business transactions in Chicago, IL. It increases your business credibility and liquidity. It will also be helpful for business loans.
Step 8: Create Your Business Website
Business websites are as important as your business structure. It is necessary to have a catchy business website with all the information regarding your company. Along with the website, you need some more things. Things such as logos, business cards, business emails, domain names, and social media accounts are needed to promote your business. You can hire a professional business service to get all of these services under one roof.
Other Things to do After Starting Your Business
- Once your company is set in the Chicago, Illinois, you need to file your taxes and apply for licenses (if needed).
- Apart from the license and permits, you need to get insurance for your business. Such as General Liability Insurance, Professional Liability Insurance, and Workers’ Compensation Insurance are some of the insurances you need to get if you are about to start an LLC.
Important Chicago Stats for Starting a Business
Before you start a business in Chicago, it is required that you know some facts about the city. Following are some of the stats to consider before starting a business.
Education & Employment
Chicago has a diverse population that comes from various educational backgrounds. There are students who haven’t finished their high-school education, whereas there are people who are more than just college graduates. Check the table (Education & Labor Force) for detailed data. From the data, it is clear that the city has enough educated and skilled people who can contribute to the labor force.
As we talk about the urban population density, the young population percentage in the city is approximately 18 (people in their 20s) and 17.2 (people in their 30s). This means that having any business that is new and tech-based might be profitable. The median age of the population in the city is 34.8. On the contrary, if anyone wants to start a business that is related to any old-age service, such as caregiver, primary old-age support, or something of a similar sort, then Chicago has approximately 3 (people in their 80s and above) percent of old people. Check out the table (Demography) above for more information.
Another important factor to mention about Chicago is the home value of owned properties. The average value of owned houses is 267979. Also, the percentage of people living in their own houses is 45.3. This reflects the real estate market of the city. For a metropolitan city, this is a considerable number.
It is inevitable that living in a big city is different from living in a town or a comparatively smaller city. It directly affects lifestyle and health. It is obvious that having health insurance is important, no matter which city or region you are residing in. But there are people in Chicago who still do not have health insurance. The rate of people not having health insurance is 9.6. This depicts the lifestyle and overall health demography of Chicago. As you plan to start your business in this city, you must consider this stat as well.
Income & Lifestyle
The income pattern of the people in this city is given in the table (Income) above. In Chicago, a part of the population has a dual family income that reflects a better standard of living. As in, people have more than one source of income. The table above shows the income percentage of various slabs.
Also Read – How to Start Business In Los Angeles, CA
Reasons to Start a Business in Chicago
Chicago offers a bunch of business-friendly services for entrepreneurs. A proper business environment, skilled labor, tax advances, deductions, and much more are awaiting if you are interested in starting your business in Chicago. Here are some of the reasons,
Stable Economic Growth
Chicago or any other city in Illinois has stable economic growth and an environment that helps any business to grow successfully. The economic structure of Illinois shows not only balanced but also a sustainable condition of economic growth, which in turn triggers the businesses to flourish in the state.
Minimize Personal Liabilities of the Entrepreneur
If you’re considering starting an LLC in Chicago, then it will be your best choice. An LLC protects your personal assets and minimizes your personal liabilities. This is one of the many reasons why having an LLC in Chicago is a wise choice. Also, if you are opting for an LLC, the tax deductions will be more than having a corporation.
Federal and State Tax Relaxation
There is a series of federal taxes that an entrepreneur has to pay when operating a business in the US. Depending on the state your company is located in, the state taxes are being imposed. For an LLC, both of these taxes are much lower compared to other business structures. Along with tax impositions, some tax deductions (state-wise) lower the filing fees and other government charges. Check out the Illinois LLC tax structure to know more about the tax structures for LLCs in the state.
Government Incentives for Entrepreneurs
Federal and state governments in the US ensure that entrepreneurs get a proper business environment in the state or city they are operating their business. The government provides a few incentives to the business holders in Illinois or any other state. That means if you are operating any business in Chicago, then Illinois State will provide an incentive for creating jobs, contributing to the state’s GDP, and/or balancing the state’s tax structure.
Low Corporate and Other Business Taxes
Corporations and other business structures (except for an LLC) are liable to pay a corporate tax in Illinois. Also, there is a Sales Tax that all businesses, including LLCs, have to pay. However, the rate of taxes is very low. Besides, as the businesses receive incentives, the tax burden gets lower.
Skilled Labour & Quality Manpower
In Chicago, it is easy to hire employees for your business. They are not only skilled but also well-educated to help your business grow. As mentioned above, the 67.2 is the percentage of labour participation. Hence, it is clear that having a business in Chicago will make a lot of difference to the existing labor force.
Demand for New Market and Industry
In Chicago, Illinois, there is an uprising demand for new industries and new markets. Entrepreneurs who are willing to start a business in any of the cities of any state are given enough opportunities to stay in business. Business licensing, tax deductions, incentives, and relaxation of business taxes are some of the benefits that encourage start-ups and budding entrepreneurs to start their own businesses in Chicago.
If we follow the US Data, the median value of commute time for the residents to their work is approximately 34.7. If you are starting a business here, you must keep in mind that commutation can be a point to consider.
Intellectual Property Protection
The US government receives roughly more than 1 million applications for IPR every year. The federal government makes sure that there is no infringement of any patent or property rights. It does not matter which city in which state you are running your business. The rule of Intellectual Property Protection is the same for all. If you have a foreign business in the US, then you might get more benefits under the IPR act.
Chicago (aka ) is ranked at 1 in terms of importance. Apart from the above mentioned reasons, there are some other benefits that businesses enjoy in Chicago. For example, technological advancement, a stable political environment, renewable resources, sustainable non-renewable resources, and some more benefits make things easier for entrepreneurs to start and run their businesses. According to US Data, the percentage of young people in Chicago is 17.2. Hence, it would be great to start a business that is related to tech here as you might get a good number of clients.
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How Fast Can You Start Business In Chicago Illinois
Whether you are considering starting your own business, or you are an existing business owner looking to expand, Illinois has a lot to offer. From high tech to retail, you’ll find a range of industries to choose from. The state offers plenty of support to help you start and run your business.
Illinois has a diversified and skilled labor pool. The state’s labor market is one of its biggest strengths. There are 6.4 million people in the workforce, and there are plenty of opportunities to develop and enhance your skills. This is one of the reasons why Illinois is a great place to start a new business.
The Illinois state tax authorities will identify your business by using the EIN (employer identification number), which is a similar number to your social security number. Many banks will require you to obtain this number before opening a bank account. It’s a good idea to obtain this number so that you can avoid having to pay double taxation on business income. You can also use it to get a credit card for your business.
While Illinois does have a bad reputation for high business taxes, it’s still a decent place to start a new business. The state provides a number of resources to help you navigate the tax code, including the Illinois Department of Revenue and the SBDCs (small business development centers). These centers offer free advice and guidance, and are volunteer-based.
The Illinois state tax department is also responsible for granting you the official state tax number. If you’re a sole proprietor, you’ll need to register your business name with your local county clerk. If you’re considering starting a corporation, you’ll need to file articles of incorporation with the Illinois Secretary of State. You’ll also need to hire a registered agent.
Starting a business in Illinois may also require you to register with your local government’s revenue department. Whether you are planning to open a restaurant, retail store, or office space, you’ll want to make sure your business location meets all of the zoning requirements. You’ll also need to obtain a license, if required. A business plan is also a good idea, as it lays out your short and long-term goals for the company.
A business plan is also important for attracting investors. You’ll need to include a good estimate of how much money you’ll need for a year’s worth of operations. You’ll also want to consider your local economy and its forecasts. Illinois has a healthy economy overall, and the state is actively working to promote new businesses in diverse industries.
The Illinois State Chamber of Commerce has a wealth of information and resources to help you with your business. The organization also offers a business planning guide that can be downloaded for free. The site includes an appendix of important documents and information to help you get started. You can also take advantage of their many mentors and business experts, who are available to offer advice and guidance.
FAQ About Chicago, IL
It is simple to form an LLC in Chicago, IL, by visiting the website of the Illinois Secretary of State. You will need to register your company name with the state, and then you can go about the process of filing for your tax ID number and getting a bank account.
Some of the unusual company concepts in Chicago, IL include pet sitting, virtual interior design, and online pet grooming consultations. Try these original ideas as a starting point if you want to open a company in Chicago, IL. Additionally, you may try selling handcrafted home décor.
Businesses are eager to relocate to Chicago, IL. Businesses are migrating to Chicago for a variety of reasons, including the city’s robust economy, friendly business climate, and state tax structure. In addition, the city has a lot to offer in terms of commerce.
In Chicago, IL, forming an LLC costs $150. This has been paid to the SOS as a state filing fee. Name reservation, DBA registration, and registered agent fees are the additional expenses. Because state tax rates vary, so does the overall cost.
In Chicago, IL, forming an LLC is not entirely free. Everyone must pay the State a minimum filing fee. The state filing fee is tax deductible in several states. Consequently, you may get a free LLC.
Chicago, IL company income tax is not a concern if you have an LLC. The only taxes you have to pay on your LLC revenue are the federal income tax and, if applicable, state income taxes.
Chicago, IL, is a great city for startups. The city is full of young people and is a hub for new ideas. It has a low cost of living and high quality of life, which is perfect for startups.
You are able to launch any company in Chicago, IL, if you have an LLC. Create a solid marketing strategy, secure funding for your startup, and manage your business in Chicago, IL.
Make sure the following items are present in Chicago, IL before you sell your goods. Develop a sound sales strategy before learning about your rivals. your clients, third. Pricing the item comes in at number four, while marketing and product promotion come in at number three. For a product to be sold in Chicago, IL, all of these are crucial.
In Chicago, IL, obtaining a tax ID number is surprisingly simple. All you have to do is fill out the application on the IRS website. In Chicago, IL, you may get a tax identification number without paying a dime in only a few minutes!
Chicago, IL requires annual renewal of LLCs. A few things should be kept in mind, but the procedure is straightforward. The Illinois Secretary of State will need to receive a form from you first. To quickly renew your LLC, submit it online before the deadline.
You need a business license in Chicago, IL, to launch a company. Depending on the kind of company, several cities demand various kinds of licenses. For additional details, you may contact the Chicago municipal authorities. Typically, in order to establish a company, you need a general business license.
In Chicago, IL, an LLC is a kind of company form that combines elements of both a sole proprietorship and a partnership. There is no double taxation in LLCs, although there is pass-through taxes. People may therefore save a lot of money.
It’s not a terrible idea to relocate to Chicago, IL. Chicago offers tremendous startup potential and a decent level of life. Chicago, IL is a business-friendly city with a lot to offer. Moving to Chicago is therefore not a terrible decision.
More than a thousand unicorn firms exist in the globe as of right now. Unicorns are also present in Chicago, IL. In contrast to other cities, the number is only mediocre.
Creating a business strategy need to be your first priority when establishing a new company in Chicago, IL. The process of starting a company is much simpler if you have a business plan. You should start by taking care of it before starting a company.
Chicago, IL is known best for its flourishing economy. If you are into business and willing to start your own business in this city, then this will be a good idea for you. In Chicago, IL, you can start you own business easily.
In Chicago, IL, small businesses may have to pay less in taxes than the city’s larger corporations. Sales tax and franchise taxes must be paid for an LLC in several states. You could have to pay employment taxes if you have workers.
In just a few simple steps, you can form an LLC. The formation documentation must first be filed with the Secretary of State. A registered agent must then be located and employed. We must also submit your Operating Agreement for filing with the Secretary of State.
Finding the appropriate financing source for your concept should be your first priority. You should start by seeking for angel investors if you want to raise money in Chicago, IL. You should seek for a small company loan if you wish to get cash from a bank.
Knowing a few things is necessary before moving to Chicago, IL. Before everything else, consider if moving there would meet your needs. Make sure Chicago offers everything you need for your company if you’re traveling there for professional reasons. The level of life is another important topic.
In Chicago, IL, there are several options for working from home. You may pursue a career as a freelance writer, graphic artist, or web developer. As a transcriber, interpreter, or virtual assistant, you may operate remotely as well. Additionally, you may become a teacher online or a baker from home.
Yes, Chicago, IL is a favorable city for LLCs. Chicago, IL offers various advantages to those who desire to form an LLC. For instance, Chicago, IL offers aspiring business owners tax breaks, financing, and other advantages.
It’s a good idea to launch a company in Chicago, IL. Chicago is expanding quickly and has a cheap cost of living. A wonderful spot to locate a team to launch a firm is Chicago, which is a magnet for entrepreneurs. The price of launching a company in Chicago is affordable.
In terms of economic development, Chicago, IL is expanding quickly. This is taking place as a result of the city’s businesses and startups. In Chicago, they make a significant economic impact. The city is attracting more enterprises. As a result, it is expanding quickly in comparison to other cities.
In Chicago, IL, a seller’s permit is quite affordable. You may lawfully sell products in Chicago if you have a permission. Before you may lawfully sell products, you may need to get a number of additional permissions and licenses.
You may create your own LLC if you reside in Chicago, IL. You must complete the form on the Secretary of State’s website. Name, location, kind of LLC, and information about the registered agent should all be included.
Houston, Texas is more expensive than Chicago, IL for living expenses. Chicago has a cheaper cost of living than Houston. Chicago has less expensive houses than Houston. The price of groceries is less expensive in Chicago than it is in Houston.
Chicago, IL business owners who want to prevent their company name from being stolen must register their business name. The Illinois Secretary of State makes it simple and fast to register your company name. There is a minimal reservation cost required to register your company name.
Chicago, IL has been the starting point for many large corporations. For instance, a business that offers ice cream in FL form or items like waffles or cookie cutters with FL shapes.
You need to choose a registered agent if you wish to form an LLC in Chicago, IL. It might be a friend, family member, partner, manager, business associate, or even you. However, you must name a registered agent for your LLC.
In Chicago, IL, there are several enterprises that may make you wealthy. You should be aware that nobody gets wealthy overnight. If you started a company in Chicago, IL, you must wait until it is established there.
In Chicago, IL, registering an LLC is a straightforward procedure. To create an LLC, you must first file documentation with the Secretary of State. After that, you must make a trip to the County Clerk to submit documentation (if needed).
Illinois’s Chicago is quite well known there. It’s because the city’s tertiary sector and industry have recently seen rapid growth. Both aspiring and established businesspeople are interested in relocating to Chicago for its business prospects.
Any company that can be started for less money is the simplest to run in Chicago, IL. However, you also need to consider the pricing and the demand for the product or service. Good alternatives include food trucks, dog walkers, personal trainers, and home bakers.
Starting a business in Chicago is not only easy but also profitable. A large portion of the US and even people from other countries are registering their business in the US for intercontinental brand building. Besides, Illinois has a sustainable economic atmosphere that is enough to encourage newbies to start and run their businesses in Chicago, IL.