Starting a Business in Wyoming
A new business in Wyoming is not out of reach. So have you been wondering: how do I start a new business in Wyoming? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Wyoming during a recession?
New Business in Wyoming: Pros and Cons
Business Insider named Wyoming as the top state to start a new business in, per an article published in 2016. And this is for the whole nation. Why? The sales tax rate is low. Also, they do not even have any corporate income tax, individual income tax, or gross receipts tax. There is also a thriving startup scene. Wyoming is fourth in the nation for startup companies.
Slight Dip
But in 2019, Fit Small Business named Wyoming its number three best state to start a new business in. Keep in mind, of course, that the methods used by Fit Small Business and Business Insider are not the same.
Start a New Business in Wyoming – Top Wyoming Industries
The biggest industries in Wyoming are energy and mining. Both of them have traditionally been strong there. However, the state’s growth and corresponding investment and economic development efforts by its government are increasing economic diversification.
Hence there are more opportunities for Wyoming business owners in all manner of different industries.
Per Wyoming Department of Labor Force Trends, the biggest industries in Wyoming are natural resources and also mining. More top Wyoming industries are construction, educational services, and manufacturing. Yet more Wyoming top industries are public administration and tourism (leisure and hospitality). Technology-related industries are also tops in Wyoming.
Start a New Business in Wyoming – Wyoming Business Ideas
Smart business owners can find new opportunities. Work with the bigger industries in the state. Offer goods or services such as trucking for any industry. Another idea is the development and also distribution of safety equipment. More ideas are food service, and also computer support in areas such as programming and data.
Here is how to start a new business in Wyoming.
Start a New Business in Wyoming – Wyoming New Business Secretary of State Requirements
Register a Business Name
Search for a business name on the Wyoming Secretary of State’s website.
Corporations
Wyoming corporation names must be unique. The name cannot be in use by another corporation registered in the state of Wyoming. Before filing to incorporate, search online records as well as other registers and catalogs to determine if a name is available. Search a database of registered Wyoming corporations here: Wyoming Secretary of State website.
Corporate Name Reservations
Corporate name reservations are not required to incorporate a business in Wyoming. There is no form to reserve a corporate name available on the official website of the Wyoming Secretary of State.
For questions about reserving a name for a corporation before they file to incorporate, contact the office of the Wyoming Secretary of State.
Registered Agents
A Wyoming corporation owner must choose a registered agent who will act as an agent for service of process for the corporation. A registered agent will receive all tax forms and also legal documents for the corporation.
The business owner can choose an adult resident of Wyoming. Or they can opt for a corporation in Wyoming, or a corporate services company as a registered agent. There is a list of corporate services companies that provide registered agent services at Register a Wyoming Corporation on the Wyoming Secretary of State website.
Business Permits and Licenses
The State of Wyoming Economic Development Agency keeps a rather handy PDF guide. It even includes contact information and license types.
Local Permits and Licenses
Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.
For example, in Cheyenne you will need to go to the Licensing and Permitting page on the city of Cheyenne website.
Start a New Business in Wyoming – Business Registration
The Wyoming Secretary of State has a New Business Entry Wizard. It lets you file everything electronically.
Tax Registration
The Wyoming Department of Revenue keeps a list of all the taxes for which you should register.
Virtual Offices
Alliance offers Wyoming virtual business office space in Casper only. For Cheyenne and Laramie, and other parts of the state, try Regus. Another idea is to ask local business owners. Also try computer user groups for help in this area. Other options may be virtual business office space in nearby states. These are Montana to the north and Idaho and Utah to the west. Utah is also to the south. Another state south of Wyoming is Colorado. Also, Nebraska and South Dakota are to the east.
Set Up Credit for a New Business in Wyoming
Company credit is credit in a small business’s name. It doesn’t tie to an entrepreneur’s individual credit, not even when the owner is a sole proprietor and the sole employee of the company.
Accordingly, a business owner’s business and personal credit scores can be very different.
The Benefits
Since company credit is separate from consumer, it helps to safeguard an entrepreneur’s personal assets, in case of legal action or business bankruptcy.
Also, with two distinct credit scores, a business owner can get two separate cards from the same merchant. This effectively doubles purchasing power.
Another advantage is that even start-ups can do this. Visiting a bank for a business loan can be a recipe for disappointment. But building business credit, when done correctly, is a plan for success.
Personal credit scores are dependent on payments but also additional factors like credit utilization percentages.
But for business credit, the scores actually merely depend on if a business pays its debts on a timely basis.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.
The Process
Establishing small business credit is a process, and it does not occur without effort. A company must actively work to build company credit.
Nonetheless, it can be done readily and quickly, and it is much faster than establishing individual credit scores.
Vendors are a big part of this process.
Undertaking the steps out of sequence will cause repetitive rejections. No one can start at the top with small business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.
Business Fundability
A small business has to be fundable to credit issuers and merchants.
For this reason, a business will need a professional-looking website and email address. And it needs to have website hosting bought from a company like GoDaddy.
And also, business phone and fax numbers ought to have a listing on 411.com.
Additionally, the business telephone number should be toll-free (800 exchange or comparable).
A business will also need a bank account dedicated strictly to it, and it needs to have every one of the licenses necessary for running.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.
Dealing with the IRS
Visit the Internal Revenue Service web site and get an EIN for the small business. They’re totally free. Choose a business entity like corporation, LLC, etc.
A company can get started as a sole proprietor. But they will probably want to change to a type of corporation or an LLC.
This is in order to lessen risk. And it will make best use of tax benefits.
A business entity will matter when it pertains to tax obligations and liability in the event of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and taxes. No one else is responsible.
Sole Proprietors Take Note
If you operate a business as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.
If you do not, then your personal name is the same as the business name. Therefore, you can end up being personally responsible for all business financial obligations.
Also, per the IRS, using this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 probability for corporations! Prevent confusion and noticeably lower the odds of an Internal Revenue Service audit simultaneously.
Starting Off the Business Credit Reporting Process
Begin at the D&B website and get a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
By doing this, Experian and Equifax will have activity to report on.
Vendor Credit Tier
First you ought to establish trade lines that report. This is also referred to as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start to get credit in the retail and cash credit tiers.
These types of accounts tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are oftentimes Net 30, instead of revolving.
Hence, if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.
Details
Net 30 accounts must be paid in full within 30 days. 60 accounts have to be paid completely within 60 days. Unlike with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.
To launch your business credit profile the right way, you should get approval for vendor accounts that report to the business credit reporting agencies. Once that’s done, you can then use the credit.
Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Vendor Credit Tier – It Helps
Not every vendor can help like true starter credit can. These are vendors that will grant an approval with nominal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may need to apply more than one time to these vendors. So, this is to confirm you are reliable and will pay punctually.
Retail Credit Tier
Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then progress to the retail credit tier. These are businesses such as Office Depot and Staples.
Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications.
One example is Lowe’s. They report to D&B, Equifax and Business Experian. They want to see a D-U-N-S and a PAYDEX score of 78 or more.
Fleet Credit Tier
Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are companies such as BP and Conoco. Use this credit to purchase fuel, and to fix, and maintain vehicles. Just use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.
One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or better and a 411 business phone listing.
Shell might say they want a specific amount of time in business or profits. But if you already have sufficient vendor accounts, that won’t be necessary. And you can still get approval.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.
Cash Credit Tier
Have you been sensibly managing the credit you’ve gotten up to this point? Then move onto the cash credit tier. These are companies such as Visa and MasterCard. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.
One such example is the Fuelman MasterCard. They report to D&B and Equifax Business. They need to see a PAYDEX Score of 78 or more. And they also want you to have 10 trade lines reporting on your D&B report.
Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).
Additionally, they want you to have an established company.
These are companies such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are usually MasterCard credit cards. If you have 14 trade accounts reporting, then these are doable.
Monitor Your Business Credit
Know what is happening with your credit. Make sure it is being reported and attend to any errors as soon as possible. Get in the practice of taking a look at credit reports and digging into the particulars, and not just the scores.
We can help you monitor business credit at Experian and D&B for only $24/month. Update the information if there are errors or the relevant information is incomplete.
Challenging Errors
So, what’s all this monitoring for? It’s to challenge any inaccuracies in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs typically want you to dispute in a particular way.
Disputing credit report mistakes generally means you send a paper letter with copies of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and keep the originals.
Disputing credit report inaccuracies also means you specifically spell out any charges you dispute. Make your dispute letter as clear as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.
A Word about Building Business Credit
Always use credit responsibly! Never borrow beyond what you can pay off. Keep an eye on balances and deadlines for repayments. Paying on time and fully will do more to elevate business credit scores than nearly anything else.
Building small business credit pays. Good business credit scores help a business get loans. Your lender knows the business can pay its debts. They know the company is bona fide. The business’s EIN links to high scores, and creditors won’t feel the need to demand a personal guarantee.
Business credit is an asset which can help with opening a new business in Wyoming for years to come.
Learn more here and get started toward opening a new business in Wyoming.
Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.
The post How to Set Up a New Business in Wyoming appeared first on Credit Suite.
