Wyoming, known for its stunning landscapes and outdoor adventures, is also a big draw for entrepreneurs. Even though it’s consistently ranked as one of the most business-friendly states, starting a business in Wyoming can seem like a big task.
To help you get started, we’re here to simplify the process. Our guide will cover the important steps so you can can get confidently get started..
Steps To Starting A Business In Wyoming
Step 1: Choose a Business Idea
The first step for starting a business in Wyoming is having a good business idea. Maybe you already have an idea picked out, or maybe you are still deciding on one. Regardless, you can check out our library of business ideas to get detailed industry information, trends, costs to start, tips, and lots more.
Step 2: Write a Business Plan
Once a solid business idea is in place, it’s time to start working on the business plan. While a business can certainly be started without one, a business plan should be the next step. A few reasons include:
Organize your thoughts and ideas: A business plan helps you clarify your vision, mission, and value you bring to the market. It also helps you identify who your customers are, competitive advantage, and unique selling points.
Identify potential challenges and opportunities: A business plan helps you analyze the strengths, weaknesses, opportunities, and threats (SWOT) of your business idea. It also helps you assess the market demand, the industry trends, and the customer needs.
Obtain funding: A business plan helps attract funding from potential lenders and investors. It shows them that you have done your homework and that you have a feasible and profitable business model.
Related: How to write a business plan
Step 3: Find the Money
Starting and growing a small business requires funding, and while finding the money to start a business tends to be at the top of the list of frustrations for most entrepreneurs, there are several funding options are available to businesses in Wyoming. Here’s a breakdown of some of the most common options you might consider:
Conventional bank loans: This is a type of debt financing where you borrow money from a bank or a financial institution and repay it with interest over a period of time. You may need to provide collateral, a business plan, financial statements, and a good credit score to qualify for a bank loan.
The advantages of using bank loans are that you can get a large amount of money at a relatively low interest rate, you don’t have to give up any ownership or control of your business, and you can build your credit history and reputation. The disadvantage is that you may have difficulty getting approved, especially as a new business.
SBA loan guarantees: This is a type of debt financing where the Small Business Administration (SBA) guarantees a portion of the loan that you obtain from a participating lender. This reduces the risk for the lender and makes it easier for you to get approved. The SBA offers various loan programs for different purposes and amounts, such as the 7(a) loan program and the 504 loan program.
The advantages of using SBA loan guarantees are that you can get access to capital that you may not otherwise qualify for and longer repayment terms than conventional loans. The disadvantage is that you will still have to provide collateral and pay additional fees and costs for the SBA guarantee.
Microloan programs: This is a type of debt financing where you borrow small amounts of money from nonprofit organizations or community-based lenders that specialize in serving low-income or underserved entrepreneurs. Microloans typically range from $500 to $50,000 and have shorter repayment terms than conventional loans. In Wyoming, organizations like the Wyoming Women’s Business Center, the Wind River Development Fund, and MoFi offer microloan programs to help small businesses get started.
The advantages of using microloan programs are that you can access capital from a lender with less stringent requirements than a bank, and you can often get mentoring and training. The disadvantages are that you may not be able to get enough funds to cover all your expenses, you may have to pay higher fees and costs than conventional loans, and you may have fewer choices and less availability of microloan providers in your area.
Investors: This is a type of equity financing where you sell a portion of your ownership or shares in your business to investors who provide you with capital in exchange for a return on their investment. Investors can be individuals or entities, such as angel investors, venture capitalists, crowdfunding platforms, or Wyoming Venture Capital (WYVC). You may need to pitch your business idea, demonstrate its potential growth and profitability, and negotiate the terms and conditions of the investment deal.
The advantages of using investors are that you can get access to large amounts of money without having to repay it or provide collateral and you can benefit from the expertise and network of the investors who can help you grow your business. The disadvantages are that you may have to give up some control and decision-making power over your business, in addition to sharing profits.
Step 4: Select a Business Structure
The next step to starting a business in Wyoming is selecting a business structure (also called a business entity). Simply put, a business structure refers to how a business is legally organized and registered. This decision should take into consideration factors such as personal liability protection, ease of management, ownership transfer ability, and more.
There are four primary business structures in Wyoming: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). A brief description of each is below.
A sole proprietorship is basically an individual that decides to go into business. There are very simple setup requirements, with possibly only the Trade Name registration, and it is the least expensive of the four entities. The ease of startup is a big selling point; however, a major downside to the sole proprietorship is that the owner is personally responsible for all debts and actions of the company. If the business is sued, the owner’s personal assets are potentially at risk. Another potential downside is that the owner will pay self-employment tax on all business profits, which may be more costly than some of the other types of entities.
General partnerships consist of two or more people conducting a business together. Like the sole proprietorship, there is no formal state filing. Also, like the sole proprietorship, the partnership has unlimited liability. If the partnership were to be sued, the partner’s personal assets would be equally at risk. The partnership itself does not pay tax from business income. Instead, profits and losses are passed through to the owner’s personal tax return. This income is subject to self-employment tax.
A corporation is a business structure that is a separate entity from the individual. While corporations are more expensive and difficult to form than sole proprietorships and partnerships, the major advantage is that the corporation provides personal asset protection for the owner(s) should the corporation be sued. The downside is the compliance requirements and administrative burdens of having a board of directors, annual meetings for directors and shareholders, filling the annual report, appointing a registered agent, and more.
Related: How to form a Wyoming corporation
The Limited Liability Company (LLC) is a popular business entity choice because it provides the liability protection of a corporation with the sole proprietorship’s ease of operation. The Limited Liability Company does not have as many administrative burdens as the corporation and has the greatest tax flexibility of the four entities.
Related: How to form an LLC in Wyoming LLC
Choosing the right type of business entity depends on many factors, such as size and scope of operations, financial resources available, and desired level of personal liability protection. It is important to consider all options before deciding, as each type has unique characteristics that may be beneficial depending on your specific situation.
Forming a corporation or LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular formation services include:
IncFile - Great service and free registered agent the first year.
Northwest - Privacy-Focused: Free registered agent and private business address for 1 year!
ZenBusiness - Easy to use and free registered agent for 1 year!
Step 5: Register the Business Name
Operating a business in Wyoming may require you to obtain certain licenses and permits depending on your type of business, location, and activities. Here is a detailed overview of the specific licenses that are necessary to operate a business in Wyoming, along with their application process:
Business licenses: The state of Wyoming doesn’t have a general business license. However, depending on where the business is located, you may need to comply with local regulations and ordinances in your city or county. For example, you may need a city business license, zoning permit, building permit, and more.
Employer Identification Number (EIN): An EIN is a nine-digit number that identifies your business for tax purposes. You need an EIN if you have employees or operate as a partnership, corporation, or multi-member LLC. You can apply for an EIN at no cost through the IRS.
Sales tax license: Businesses selling products, admissions, and certain services will need to register for a Sales Tax License with the Wyoming Department of Revenue.
Professional licensing: Depending on what your business offers, you may need to obtain additional licenses and permits from various state agencies. Some occupations, such as athletic trainers, physical therapists, landscapers, and barbers, require licensing in Wyoming.
Step 6: Open a Business Bank Account
The next step is to open a business bank account to separate business and personal funds. If you don’t, you will have difficulty tracking your income and expenses, managing your cash flow, and preparing your financial statements. You may also miss out on tax deductions or incur penalties for inaccurate reporting.
Step 7: Hire Employees
As a new small business owner in Wyoming looking to hire your first employee, there are multiple agencies to register with, such as the Internal Revenue Service, Wyoming Department of Workforce Services, and others.
Employers are responsible for reporting new hires, verifying employees are eligible to work in the U.S., and determining income tax withholding, unemployment insurance, unemployment taxes, and payroll withholding taxes, including Social Security and Medicare.
Step 8: Obtain Business Insurance
Business insurance is never at the top of anyone’s list of things they want to get when starting their business; however, business insurance can protect your business from various hazards and liabilities that may arise from your business operations, such as property damage, lawsuits, injuries, theft, natural disasters, and more.
Most types of business insurance are optional, except for workers’ compensation insurance, which is required for all Wyoming employers.
Step 9: Start Tracking Income and Expenses
As we get to the end of the steps to start a business in Wyoming, an important phase is setting up a system to track income and expenses. By accurately tracking your income and expenses, you can ensure that you’re taking advantage of all the allowable deductions and paying the correct amount of taxes to the IRS and Wyoming Department of Revenue. In Wyoming, while there is no state income tax, but businesses are subject to other forms of taxation like sales tax, property tax, and federal income tax.
By complying with tax laws, you can avoid any penalties, interest, or audits that may result from underreporting or misreporting your income and expenses.
Keeping track of your income and expenses also helps you measure how well your business is doing financially. You can see how much revenue you are generating, how much profit you are making, and how much cash flow you have. With this information, you are better prepared to take appropriate actions to improve your business operations and profitability by monitoring your business performance.
Related: Setting up accounting for a business
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Common questions when starting a business in Wyoming
What are the steps to starting an LLC in Wyoming?
There are three main steps to starting an LLC in Wyoming. These include:
There are a few more details to learn about, so be sure to check out how to start an LLC in Wyoming.
How much does it cost to start an LLC in Wyoming?
The Wyoming Secretary of State LLC filing fee in Wyoming is $100.
What licenses do I need to start a business in Wyoming?
The state doesn’t require a general business license, however, there are potentially several different licenses and permits a business will need to obtain before starting.
Wyoming Small Business Resources
- There are 73,330 small businesses in Wyoming, which is 98.9% of all businesses in the state,1 and 64.6% of Wyoming employees work for small businesses.2 Because of the economic impact of small businesses on the state, there are various business support resources to help businesses start, grow, and succeed in the state. Some of these resources include:
- Impact 307: A statewide innovation-driven incubator system focusing on technology-oriented, high-growth companies and startups.
- SCORE: A nonprofit organization providing business mentoring and education.
- Wyoming Business Council: A state economic development agency that helps businesses with recruitment, expansion, retention, and innovation.
- Wyoming Department of Revenue: Responsible for the administration of sales and use tax licenses.
- Wyoming Library to Business: A free, business-oriented resource provided by local libraries in Wyoming. It offers access to business-related information and community-driven support services, aiding local business development and research.
- Wyoming Secretary of State: The official state agency for the registration of LLCs (Limited Liability Companies) and corporations in Wyoming.
- Wyoming Small Business Administration District Office: Provides a range of services, including training and loan guarantees to businesses.
- Wyoming Small Business Development Center (SBDC): A network of advisors and experts who provide small business advising, training, and education.
- Wyoming Women’s Business Center: Offers no-cost business advising and support, focusing on women and minority entrepreneurs. Services include confidential business counseling and access to micro-financing programs, along with artist development initiatives.