How to Start a Business in Michigan

If you’re thinking of starting a business here in Michigan there are a few things you will need to prepare for before you open shop. If you’re a first time business owner, the thought of all that goes into entrepreneurship can be enough to scare you away from the idea all together; things such as setting up your tax id, hiring employees, getting business insurance and so on. Opening a business can seem like a daunting task, but with the right steps in place you’ll be ready for your grand opening in no time.

Once you have landed on a business name and concept you’ll want to register your business name and secure a Federal Employer Identification Number (FEIN). You can apply for an FEIN online by visiting the IRS website and submitting an application. You can also apply by mail, fax, or telephone (international applicants). Once you have your FEIN you will be able to open up a business checking account and establish lines of credit with vendors if necessary. 

Opening a business means you will be responsible for withholding taxes from employee paychecks and making sure those taxes make it to the proper tax authority. Employer taxes such as federal, local, state, social security, and medicare will need to be withheld and in some cases, matched by the employer. Other taxes, such as federal and state unemployment will fall solely on the employer (you) to pay; this means no money will be withheld from your employees. If you’re not a tax expert, I recommend outsourcing this responsibility to a third party. Many payroll software providers will take care of your tax needs at no additional cost. You can register for, manage, and pay your business taxes online at the Michigan Treasury website

Depending on the nature of your business you might need to obtain a license from the State of Michigan. You can conduct a search to see what kind of license/permit, if any, your business will need by visiting Also, you will want to check with your local authority (county, city, township, etc) to see if you will be required to register your business there. 

In the search for a facility to operate your business you will want to check with the city clerk in order to verify your compliance with zoning codes. Even if you plan on operating out of your home, you will need to be informed on the local zoning codes and ordinances. If your location is in violation with code you can be subject to fines, or even closure. 

Once you’ve finished the above steps you’ll be in good standing to start prepping for opening day. For a more in depth how to get your small business started check out the Small Business Development Center’s eBook ‘Guide to Starting and Operating a Small Business’.