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How to start a business in Michigan in 7 steps

how to start a business in michigan

With its positive business climate, diverse talent pool and culture of innovation, Michigan is, in many ways, an attractive place to start business. According to Governor Whitmer, Michigan saw a record number of new small businesses in 2021, with more than 150,000 new small business applications that year—up 59% from 2019.

If you’re thinking of joining this wave of entrepreneurship, you'll need to follow some important steps, from coming up with a business name to creating a website that gets your brand out there.

Start a business in Michigan in 7 steps

01. Come up with a business idea

When you start a business, you’ll need to figure out exactly what to focus on. Begin by brainstorming the products and/or services you want to sell. Think about your personal interests, experience and skills—and don’t be afraid to ask friends and family for feedback on your initial ideas. Make sure to also research your target market thoroughly and avoid operating from gut instinct alone.

With all that said, Michigan has a diverse economy with opportunities in various industries for all sorts of established and unique business ideas. Here are some business ideas to consider that may be successful in the state:

  • Automotive: Michigan is a major hub for the automotive industry (in fact, 96 of the top 100 automotive suppliers have a presence in the state). Dip your toe in the automotive industry by offering auto repair and maintenance, starting a car rental business, car parts manufacturing or car detailing and car wash services. Check out our guides on how to start a car wash business and how to create a car wash business plan to get started.

  • Healthcare: The healthcare and life sciences sector is booming in Michigan; the state ranks in the top 10 nationwide for bioscience-related R&D, as well as number nine in the pharmaceuticals employment sector. Business opportunities include nursing or residential care services, manufacturing medical equipment and supplies, or ambulatory health services.

  • Manufacturing: Michigan is a leader in advanced manufacturing, boasting the 5th largest advanced manufacturing workforce in the U.S. You could try your hand at fabricated metal product manufacturing, machinery manufacturing, plastics and rubber products manufacturing, or supplying raw materials to other businesses.

  • Technology: With a strong talent pool of engineers, programmers and tech graduates, Michigan is a springboard for tech businesses. Consider business opportunities involving mobile app development, software-as-a-service (SaaS) or virtual reality.

  • Agriculture: Michigan produces more than 300 commodities each year and has a robust food processing sector. That makes Michigan a strong market for businesses that provide agricultural products or services, such as farm-to-table restaurants, floriculture products, wholesale produce and wine. There are a number of diverse ways to start a farming business, or make money as a farmer in the state.

  • Sustainable energy: There’s a growing demand for clean energy products and services in Michigan, plus the state has a goal of being carbon-neutral by 2050. This makes Michigan an excellent place to start a sustainable energy business. Solar panel installation, wind turbine manufacturing, biomass pellet production and geothermal heat pump installation are just a few of the business ideas to consider in the sustainable energy space.

  • Online education: Michigan is home to many universities and colleges that offer online courses and degrees, creating a large pool of potential students who are accustomed to—and interested in—online learning opportunities. Starting an online learning, coaching or other mobile learning business in Michigan is a great way to share your knowledge and expertise with others.

how to start a business in michigan - most popular small business ideas

Looking for more business ideas to start in Michigan?

02. Choose your business entity

There are five types of businesses that can be established in Michigan including sole proprietorships, partnerships, corporations, limited liability companies (LLCs) and nonprofits. Here’s a summary of each:

  • Sole proprietorship: An unincorporated business that is owned by one individual. Owners of sole proprietorships are personally responsible for debts and liabilities of the business.

  • Partnership: General partnership and limited partnership businesses are owned by two or more people who share in the organization’s profits and losses.

  • Corporation: A legal entity that is separate from its owners. Corporations can be taxed, sued and enter into contracts. There are two types of corporations: C Corporations and S Corporations. C corporations offer more flexibility in terms of ownership and stock but are subject to double taxation.

  • Limited liability companies (LLCs): This business structure combines the limited liability features of a corporation with the corporate tax efficiencies and operational flexibility of a partnership. Forming an LLC is a relatively straightforward and easy process, though requirements vary by state (How to start an LLC in Michigan) - consider working with a third party expert service, such as Legal Zoom to start yours. This is also a type of a joint stock company.

  • Nonprofit: Nonprofits are typically organized to serve a specific social cause or to provide a public benefit. They are exempt from paying federal income taxes and may also be exempt from state and local taxes. You can establish your nonprofit by applying for 501(c)(3) tax-exempt status through the IRS.

start a business in michigan - types of business entites

03. Select the best name for your business in Michigan

When it comes to choosing a business name, there are a lot of factors to keep in mind. A good place to start is by brainstorming words and phrases that relate to your mission, product or service. Ultimately, your business name should be memorable and original. It should also be flexible enough that it still makes sense as your business grows.

Here are some ideas that rely on qualities or regions specific to Michigan to kickoff your brainstorming process:

  • Motor City Innovations: References Detroit's nickname as the "Motor City" and emphasizes the idea of innovation and technology.

  • Great Lakes Green Energy: A nod to Michigan’s Great Lakes and emphasizes the idea of sustainability and green energy.

  • Wolverine [Anything]: Michigan is often called the Wolverine State, though the precise reason for this has been lost to history. Attaching Wolverine to your business name is one way to differentiate your business from others in your industry while appealing to people from Michigan (e.g., Wolverine Building and Loan, Wolverine Lighting, Wolverine Candles, etc.).

  • Pure Michigan Produce: This name honors the state's agricultural heritage and could be used for a business that sells fresh produce or agricultural products.

  • The Auto Innovator: This name references Michigan's strong foundation in the automotive sector and emphasizes the idea of innovation and technology.

  • The Upper Peninsula Outfitter: This name references the Upper Peninsula region of Michigan and could be used for a business that sells outdoor gear or provides outdoor-related services.

  • Michigan Made: References to the state's strong manufacturing heritage. It’s a concise name that emphasizes the idea of creating a product.

  • Superior Gourmet: A reference to Lake Superior which borders Michigan, Minnesota, Wisconsin and Ontario, the name could be used for a business that specializes in food products or services.

  • Huron Health: A reference to Lake Huron, this name could be used for any type of healthcare business that serves local communities or as a way to differentiate a biotech or device manufacturer located in the area.

  • MiTech: A great short name for a Michigan-based business providing technology products or services. This can be easily adapted for different business types (e.g., MiCyber for a cybersecurity business or MiTraining for an online training school).

If you’re looking for more original ideas, take Wix’s business name generator for a spin.

start a business in michigan, business name generator

Once you’ve selected a name, you’ll want to check that it’s available as a domain name. Also, make sure to check the Michigan Department of Licensing and Regulatory Affairs (LARA) and United States Patent and Trademark Office (USPTO) websites to see if there are any other businesses in the state with the same name or any existing trademarks, respectively.

04. Write your business plan

Launching a business in Michigan is an exciting undertaking, but it's important to be prepared. Writing a comprehensive business plan ensures that your venture gets off on the right foot. Your ‘roadmap to success’ should include an insightful executive summary or concept statement, as well as key information regarding how you’ll structure and fund your business so that it remains profitable in the long run. It should include your business triage plan as well as your intended business operations just one example.

start a business in michigan - develop a business plan

05. License and register your business in Michigan

To register a business in Michigan, you’ll need to follow these general steps:

  • Register your business on the LARA website. The exact paperwork and filing fee at this stage will depend on your business structure.

  • Obtain an employer identification number (EIN) with the IRS. An EIN is required if you have employees and is also required by most banks when you go to open a business bank account.

  • Register for state taxes with the Michigan Department of Treasury. You can register your business with the Michigan Department of Treasury through their Online Business Registration portal. After completing the online application, you will receive a confirmation number of your electronic submission, then receive your new sales tax license in as few as seven business days.

  • Register for Michigan unemployment insurance and workers' compensation with the Michigan Unemployment Insurance Agency. This applies to you if you plan on hiring employees.

  • Obtain any applicable permits and licenses. Knowing how to get a business license is a key step. Check the LARA site to see which permits and licenses you need based on your business type and industry. These could include permits from the Department of Environmental Quality, Department of Health and Department of Taxation.

start a business in michigan - 6 steps to register your business

06. Secure funding for your business

There are several approaches you can take when you’re ready to raise money for your business in Michigan, including:

  • Personal savings: Using your own savings to start or grow your business is one of the most common ways to fund a business, at least from the jump.

  • Angel investors: Angel investors are wealthy individuals who provide funding for startups in exchange for ownership equity or convertible debt.

  • Venture capital: Venture capital firms invest in startups and small businesses that have the potential for significant growth.

  • Crowdfunding: Crowdfunding is a way of raising money from many people either through a fundraising website or through platforms such as Kickstarter or Indiegogo.

  • Small Business Administration (SBA) loans: The SBA provides loans to small businesses through participating banks and other lending institutions.

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

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

  • Bank loans: Banks offer different types of loans for small businesses, such as term loans, SBA loans and lines of credit.

Additionally, here are some small business funding resources specific to Michigan:

  • Small Business P2 Loans: A business loan program run by the Michigan Department of Environment, Great Lakes and Energy (EGLE). It provides funding opportunities for small businesses that are making efforts toward sustainability, waste reduction and energy conservation.

  • Detroit Community Loan Fund: The Detroit Community Loan Fund is a local funding option for small businesses in Detroit.

  • Opportunity Resource Fund: Provides mortgages, small business loans, and real estate development loans to Michigan businesses. They can also help explain how to get a business loan and which type.

  • Invest Detroit: This is a local organization that connects Detroit businesses with funding sources. They have four primary areas of focus: real estate, small business, commercial and industrial, and venture capital.

Make sure to carefully research each funding option and consult an attorney or financial advisor to decide what works best for your business. When seeking funding, it's important to have a strong business plan that demonstrates how the funds will be used to grow your business.

07. Create a business website

Your business website is the virtual face of your company. It’s where you can promote your business using your own words and imagery.

Making a website is essential, even if you plan to do most of your business offline at a brick-and-mortar storefront or office. From selling products online, to marketing your brand, to establishing customer loyalty—a website lends credibility to your business and is a valuable tool for connecting with your customers.

Choose from Wix’s business website templates and customize your design to your liking. Then, study these steps on how to make a business website that not only looks good, but performs well.

start a business in michigan, business website

Business examples in Michigan

Check out the below Michigan business examples, which are all built on Wix.

Powers Property Management

Powers Property Management services commercial and residential properties throughout Southeast Michigan, assisting with hydroseeding, excavation, snow removal and more. What started as a small landscape business has evolved into a trusted property management service with more than 10 years of experience under its belt.

State & Main

Located in Scottville, Michigan, State & Main manages several rental units in a historic building that was once home to People’s State Bank. Website visitors can explore floor plans, amenities and information about the property—while residents can log in to a residents’ portal.

How to start a business in Michigan review

start a business in michigan review

Looking to start a business in another state? Check out:

How to start a business in Michigan FAQ

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

The cost for initial registration varies according to the types of business entity you choose to establish. An LLC costs $50 to set up. Plus a $25 annual fee to keep it registered. A sales tax license is free, but you may be subject to other licensing and insurance costs depending on the type of business and industry.

Is Michigan a good place to start a business?

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