Secrets to Starting a Small Business in Chicago
Starting a small business in Chicago can be exciting—but it can also feel overwhelming. To help you conquer those feelings, Davinci divulges three big secrets to success so you can feel assured that it’s not only possible, but exhilarating to open up your own venture.
Secret #1: Identify the Pitfalls
Businesses can fail for a variety of reasons, such as a flawed marketing strategy, a poor financial plan, an unhelpful team, or a lack of patience. These reasons for business failure apply to all startups everywhere, but are there any obstacles to be aware of specific to Chicago itself? Yes, and here are some for you to consider:
• Scarce Financing: If your business financial plan isn’t strategic with a straight path to quick revenue, you may have a hard time securing funds.
• Considerable Competition: More startups are starting all the time in Chicago, especially when it comes to the software industry. With the noise at such a high volume, it can be hard to be heard.
• Tight-Knit Community: Being connected to key players in the local small business arena is necessary, but persistence is required for outsiders to break into the inner circle.
• Difficult Access: The traffic and large city spread makes a long commute for employees, delivery drivers, service providers, and brick-and-mortar customers.
Now that you know what to watch out for, it’s easier to overcome them from the get-go, rather than be blindsided by these hurdles at the worst time.
Secret #2: Prioritize the Necessary Paperwork
A lot of would-be businesses can’t get off the ground because of missing or incorrect paperwork. Don’t let this happen to you. Make sure to focus on getting all the proper paperwork in place, at the right time and in the right order.
To get started, here are some frequently asked questions regarding the topic.
How Do I Start a Business in Chicago?
Knowing how to start a business in Chicago is the first step every entrepreneur needs to take, so here are the basics:
• Reserve a business name.
• Select a business structure type.
• Register your business.
• Contribute unemployment and workers’ compensation insurance, if required.
• Obtain and display required posters.
• Make contact with a Chicago Small Business Development Center.
For a more complete list of how to start a small business in Chicago, refer to the city’s Starting Your Business guide.
Do I Need to Reserve a Business Name?
What Business Structure Type Should I Choose?
The business structure type you should choose for your business depends on its industry, operations, and size.
• Sole Proprietorship or General Partnership: You may choose one of these if you have a simple, self-financed, one- or two-person business that isn’t expected to grow larger.
• Limited Partnership: You can choose this if you don’t need to raise funds for your business and want to keep full control. It’s often used for investment vehicles in family estate planning, rather than active business ventures.
• Limited Liability Partnership: You may want this business type if you want to balance control and enjoy reduced liability.
• Limited Liability Company (LLC): Owners have limited liability, flow-through taxes, and operating flexibility. This is well-suited for all businesses except those in banking or insurance.
• C Corporation: A C corp is a good choice for businesses that have moderate-to-high risks and that plan to eventually be sold or “go public.”
• S Corporation: A business that passes income and expenses through to its shareholders, who then report it as individual tax income, is an S corp. This may be a good choice for a small, domestic corporation that has fewer than 100 shareholders and only one class of stock.
Rather than registering your business yourself, you may prefer to rely on an expert, dependable registered agent to do the work for you. Look into Davinci’s incorporation services for more information.
How Do I Complete My Chicago Business Registration?
You can complete your Chicago business registration by registering with the Illinois Department of Revenue. Your business may also be required to follow Illinois licensing and permitting requirements.
How Much Does It Cost to Get a Business License in Chicago?
After your business is registered, you must obtain any required business licenses in Cook County. So, how much does it cost to get a business license in Chicago? There are a wide range of costs for a Chicago business license, depending on the type of business you are starting, so do your research before you budget.
Does My Business Need to Contribute Unemployment and Workers’ Compensation Insurance?
Yes, your business will most likely need to make contributions to unemployment insurance and workers’ compensation insurance.
Secret #3: Avoid a Lease You Can’t Afford
Because of the instant and much-needed prestige having a prime Chicago commercial address gives your business, you’ll want to secure office space in the best place you can afford.
Unfortunately, Chicago has recently seen some of the highest rental rate increases in the country, especially in the most desirable areas for office space. The cost of a lease in such spaces is exorbitant and cost-prohibitive to new ventures. Therefore, don’t sign a lease your business can’t afford—but also avoid settling for a less-than-ideal location.
Being in-the-know about how to secure a prime place can have significant benefits in this city. Whether you’re a law firm getting its professional footing, a boutique betting on foot traffic, or a tech company taking off, Davinci supports small businesses with affordable daily, weekly, or monthly rentals right where you need to be.
• Day Offices, Meeting Rooms, and Conference Rooms: Reserve the right square footage with the best prices to get your business going. We have hourly, daily, or weekly rooms available for training, pitches, depositions, interviews, and more. Meeting catering is optional.
• Coworking Space: Work shoulder-to-shoulder with top talent and network with the best in the business. These spaces are exciting and pulsing with activity.
• Virtual Offices: Get a top Chicago address without the commute. Included is a lobby directory listing, mail receipt/forwarding, conference rooms, a business support center, and more.
• Event Venues: Book the perfect space for your business event. Your guests will leave impressed.
Get Your Free Chicago Davinci Quote
If you’re starting a small business in Chicago and ready to reserve a professional Davinci rental, get a live quote now or explore our available virtual office space in Chicago.