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How to start a business in Illinois in 7 steps

how to start a business in illinois

Illinois offers a wealth of opportunities for entrepreneurs and small business owners looking to start a business. With a diverse economy and a population of over 12 million, Illinois ranks as one of the top states to start a business. In fact, there are over 1.2 million small businesses in Illinois, making up 98% of all businesses in the state.

From tech startups to mom-and-pop shops, small businesses in Illinois are thriving. With access to funding and a range of support services, it's no wonder that Illinois is a top destination for entrepreneurs. However, if you're considering starting a business in the Land of Lincoln, there are some things you should know.

In this guide, we’ll step you through the process of starting a business in Illinois, from developing your business idea and choosing a name, to registering your business and making a website.

Need to create a business website? Start building yours today.

Start a business in Illinois in 7 steps

01. Come up with a business idea

The best business ideas are discovered in a variety of ways. Some stem from entirely new ideas. Others are a response to a hole in the market. Whichever way you think of a business idea, be sure to research your target market and validate that there’s a real need for your idea.

In general, Illinois provides fertile ground for new entrepreneurs and startups (see our business start up checklist). Here are several unique business ideas that may be worth entertaining based on Illinois’ unique market.

  • Technology startup: Illinois is home to several major technology companies, particularly in mobile app development, software development and data analytics. A new business involving app development or other innovative technologies could fare well in the Illinois scene.

  • Personalized health and wellness: Given the state’s large population of busy professionals, a startup that offers personalized health and wellness services could do well in Illinois. Your business could offer personal training (learn more ways to make money as a personal trainer), nutrition counseling or stress management services that cater to each client's specific needs.

  • Outdoor adventure tourism: Illinois offers many opportunities for outdoor recreation, including hiking, fishing and camping. To tap into this market, consider a business that provides outdoor adventure tours or equipment rentals, particularly in the state's more rural areas. Check out these outdoor business ideas for more inspiration. Conversely, consider starting a gaming business if you aren't the outdoorsy type.

  • Hospitality: Illinois is home to many tourist destinations, such as Chicago, Springfield and Galena. This makes it an excellent location for small businesses in the hospitality industry, such as hotels, restaurants, private property rentals and event or party planning companies.

  • Pet care services: Illinois has a high pet ownership rate, making it an ideal location for a startup that offers pet care services like pet grooming, dog walking and pet sitting. There is also a growing trend for organic and natural pet food, which could be an area to tap into with your new pet care business.

  • Retail and eCommerce: From boutique clothing shops to specialty food stores, there are many opportunities for small medium businesses in the retail industry. Combine your store with an eCommerce website to reach customers across the state and beyond. Alternatively, meet the specific needs of your target market without the added cost of inventory storage and management by working with a dropshipper to fulfill all of your online orders.

  • Transportation services: Transportation or shuttle services are low-cost small business ventures that would do well in urban locations, such as Chicago and Springfield. Consider starting a trucking business, starting a courier business or starting a box truck business.

  • Renewable energy: With a growing focus on sustainability and clean energy, starting a business that offers renewable energy solutions could be a profitable opportunity. Think: solar panel installations, wind turbine services or energy-efficient home upgrades.

  • Consulting and professional services: Chicago and other densely populated cities across the state are major business centers, making the areas ripe for many professional service startups, such as consulting, accounting and legal services. Learn more about starting a consulting business. Other service-based businesses such as home cleaning businesses have a low barrier to entry and could do well too.

  • Food delivery or mobile food truck: Illinois offers many opportunities for food delivery or starting a food truck business. Some ideas include healthy meal options for busy professionals, pre-packaged meal kits for families and unique fusion cuisine that use locally sourced ingredients.

  • Home improvement services: With a high number of homeowners in the state, starting a home improvement service that provides repairs, remodeling, painting, plumbing and maintenance services could be a lucrative business opportunity. These also all work well as small town business ideas too, depending on competition and your target market.

  • Senior care services: Illinois has a large aging population, which creates an opportunity for startups that provide senior care services. This could include home care, companion services or medical support services for seniors in the state.

starting a business in illinois, business idea

Remember that the most successful businesses are often born out of a desire to solve a problem, meet a need or fulfill a vision. Embrace the process of brainstorming and exploring different ideas before coming up with a valuable product and a unique selling proposition, and don't be discouraged if it takes time to find the right one.

02. Choose a business type

Choosing the right business structure is a critical step in starting a small business. The type of entity you choose will impact your legal liability, tax obligations and management structure.

There are five primary types of businesses that can be established in Illinois. These include:

  • Sole proprietorship: A business owned and operated by one person who is personally responsible for all aspects of the business, including its debts and obligations.

  • Partnership: A business owned by two or more individuals who share in the profits and losses of the business. Partnerships can be general (where partners share equal responsibility) or limited (where one or more partners have limited liability).

  • Corporation: A legal entity that is separate from its owners (shareholders) and has its own rights and liabilities. Shareholders are generally not personally responsible for the corporation's debts and obligations.

  • Limited liability company (LLC): A hybrid business structure that combines the liability protection of a corporation with the tax benefits of a partnership. Owners of an LLC are called members and have limited liability for the company's debts and obligations. Learn more about how to start an LLC and consider using a third party like Legal Zoom to help.

"Unlike corporations, LLCs are unable to offer stock options,which may make them less

attractive to investors. And due to their limited liability, banks may be more hesitant to offer

loans. Additionally, unlike sole proprietorships and general partnerships, LLCs need to pay

registration and renewal fees and are required to have a registered agent." Shylene

D’Addario, VP and associate general counsel at LegalZoom

  • Nonprofit: An organization that operates for the benefit of the public or a specific group of people, rather than for the purpose of making a profit. Nonprofits are typically exempt from certain taxes and are required to reinvest any profits back into the organization to further its mission.

how to start a business in illinois - business entities

How do you know which structure is right for you? Below are some tips to help you select the best business entity type for your small business.

  • Consider your business goals: Your business goals, such as growth plans and exit strategy, should be taken into consideration when selecting an entity type. For example, if you plan on engaging investors such as angel investors, a C corporation may be the best choice, while an LLC may be better if you want more flexibility in management.

  • Assess liability protection: Liability protection is important to consider when selecting a business entity type. If you’re concerned about personal liability, an LLC or corporation may provide better protection than a sole proprietorship or partnership

  • Evaluate tax implications: The tax implications of each entity type can vary significantly. For example, a sole proprietorship's income is taxed at the owner's individual tax rate, while a multi-member LLC can choose to be taxed as a partnership or corporation. It's essential to consult a tax professional to understand the basics of corporate tax and the tax implications of each entity type.

  • Understand the administrative requirements: The administrative requirements, such as paperwork and ongoing reporting can also vary among entity types. Consider the administrative burden of each entity type and whether it aligns with your resources and capabilities.

  • Seek legal and financial advice: Selecting a business entity type is a complex decision, and it's essential to seek legal and financial advice. Consult with an attorney and an accountant to understand the legal and financial implications of each entity type and make an informed decision.

03. Name your Illinois business

As a general rule of thumb, choose a business name that reflects your brand, is memorable and would resonate well with your target audience.

how to start a business in illinois - business name

Start by thinking of the products or services you intend to offer and brainstorm a list of keywords that are relevant to your business. Try mixing keywords from your list to create original combinations, or use Wix’s business name generator to help provide inspiration. Here are some ideas to get your creative juices flowing:

  • Windy City Innovations

  • Prairie State Enterprises

  • Illinois Harvest Co.

  • Chicago TechWorks

  • Land of Lincoln Logistics

  • Heartland Health Care

  • Illinois River Trading Co.

  • City of Big Shoulders Solutions

  • Great Lakes Graphic Design

  • Midwest Medley Catering

Once you’ve decided on a business name, check to see if a relevant domain name is available. You’ll also want to perform a Corp/LLC search on the Illinois Secretary of State’s website to ensure that your business name is not already in use by another business within Illinois. Furthermore, you’ll want to check the United States Patent and Trademark Office (USPTO) website to ensure that there aren’t any pending or existing trademarks for your name.

04. License and register your business in Illinois

Now for the fun part—making your new business official with the federal government and the state of Illinois.

  • Register your business with Illinois: Register your business with the Illinois Secretary of State’s office by filing the right appropriate paperwork online or by mail. The exact paperwork—plus filing fees—depends on your business type.

  • Obtain an employer identification number (EIN): An EIN is a federal tax identification number that is assigned to your business for the purposes of employee and tax filing regulations. Apply for an EIN/FEIN online through the Internal Revenue Service (IRS) website.

  • Register for Illinois state taxes: Depending on the type of business you are starting, you may need to register with the Illinois Department of Revenue and get a tax ID number to collect sales tax, use tax and other required taxes.

  • Obtain any necessary licenses and permits: Obtain any required licenses and permits from Illinois and/or your local government. Some examples include a food service sanitation certificate, a liquor license or a business operating permit.

It is important to verify the specific requirements for your business with your local and state government, as the procedures and criteria may differ depending on the nature of your business, its location and the products or services you offer.

how to register a business in illinois

05. Write your business plan

Writing your business plan may be the most important step in launching and operating a successful business.

A comprehensive business plan serves as a roadmap for achieving your goals, including the strategies you’ll use to reach them. A business plan is also key to maintaining focus and motivation as you navigate the challenges of entrepreneurship.

A business plan, in a nutshell, helps you to:

  • Clarify your vision: Your business plan should include a clear vision statement that articulates your values, goals and aspirations for your business. This will help you to stay focused on your core mission as you make strategic decisions about your company's future.

  • Attract investors and partners: A well-crafted business plan can help you attract investors and partners who share your vision and believe in your potential for success. It should include a thorough market analysis, a detailed financial plan and a clear path to profitability, all of which can help convince others to invest in your business.

  • Build a roadmap for growth: Your business plan should outline a clear path for growth, including strategies for marketing, sales and product development. This will help you stay on track as you pursue new opportunities and expand your customer base.

  • Identify potential challenges: Your business plan should additionally include a risk management plan that identifies potential challenges and outlines strategies for mitigating them. By anticipating potential roadblocks and developing contingency plans, you can avoid costly mistakes and stay on track towards achieving your goals.

  • Measure success: Finally, your business plan should include clear metrics for measuring success, including revenue targets, growth milestones and customer acquisition goals. Tracking your progress toward these metrics can help you stay motivated and ensure that your business is on track for long-term success.

how to start a business in illinois - business plans

06. Find funding for your business in Illinois

If you need to raise money for a business in Illinois, there are several ways to go about doing it.

  • Personal savings: It’s not uncommon to use your own savings to get your business off the ground. Likewise, you could seek financial assistance from friends and family members.

  • Business loans: Apply for a business loan from a bank or other financial institution. The Small Business Administration (SBA) similarly provides loan programs for small businesses.

  • Grants: Some government agencies or private organizations support small businesses through grants. These grants do not need to be paid back, but they may have specific qualification requirements.

  • Crowdfunding: Use an online platform such as Kickstarter, GoFundMe or Indiegogo to raise funds from a large group of people who support your business idea.

  • Angel investors: Seek out angel investors who may invest in your business idea in exchange for a share of the ownership or potential profits.

  • Venture capitalists: Pitch your business idea to venture capitalists who invest in high-growth potential startups in exchange for equity in your company.

  • Microloans: Some nonprofit organizations within the state of Illinois offer small loans of up to $50,000 to help entrepreneurs.

  • Credit cards: Alternatively, you could use personal or business credit cards to fund your business, but it's important to note that this option could come with high-interest rates and fees.

  • Community development financial institutions (CDFIs): CDFIs are financial institutions that provide loans and other financial services to underserved communities. Certain qualifications apply.

  • Business incubators and accelerators: Incubators and accelerators provide funding, office space and other resources to help startups grow.

Before choosing a method for raising money, carefully research each funding option and consult a knowledgeable attorney or financial advisor to determine the best funding strategy for your business.

07. Create a business website

No matter where your business is located, having a business website is an effective way to promote and sell your products or services online. A professionally designed website can help you establish brand credibility, attract potential customers and build brand awareness.

When building your website, choose a business website template that reflects your brand's personality and unique characteristics. Customize the color scheme, typography, visual element, and written content to ensure that your website stands out from your competitors.

To engage your target audience and drive conversions, focus on creating high-quality content that resonates with your customers. Additionally, after launching your website, use various promotional strategies, such as email marketing, SEO and social media campaigns to increase visibility and attract relevant audiences to your website.

how to start a business in illinois - business website

Illinois business examples

Here are some examples of businesses in Illinois that use Wix to get their brand online.


Choppers, located in Chicago, has been making a name for itself since it opened in 1987. Choppers took a fun spin on made-to-order food by positioning itself as the place for “happy meals for adults.” Its menu offers a variety of traditional American foods and all around good eats.

Core Performance Fitness

Located in Yorkville, Illinois, Core Performance Fitness aims to help everyone become a better version of themselves by offering a full training facility with trainers and programs designed to physically and mentally challenge their patrons.

How to start a business in Illinois review

how to start a business in illinois review

How to start a business in Illinois FAQ

Is Illinois a good state to start a small business?

It can be bearing in mind that Illinois has a strategic location in the Midwest region of the United States. It offers proximity to major markets, transportation infrastructure, and access to a large customer base. This can be especially advantageous for businesses involved in logistics, manufacturing, and distribution.

How much does it cost to start a business in Illinois?

How to start a business in Illinois with no money?

How to start a business in Illinois from home?

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