Illinois is a popular place to start a business, but not necessarily an easy place for entrepreneurs.
A state government report revealed that Illinois led the Midwest in the number of filings for new business startups in 2021. Indeed, it was among the top 10 states in the nation for new business startups that year. There were 198,872 filings for new businesses in Illinois that year, the highest number since the state began keeping records in 2004.
While these findings seem encouraging, a more recent report puts them in a somewhat different light.
A report published by Simplify LLC in April of this year found Illinois ranked as the 12th most expensive state in which to start a new business.
Researchers looked at all 50 states and the District of Columbia and compared them using the following criteria:
- Basic costs: Filing fees and corporate income tax rates
- Space and utilities: Available commercial real estate and utilities costs
- Wages and labor availability: Average worker income, labor force participation, education
- Business environment: This factor looked government-sponsored loans to small businesses, as well as the numbers of business startups and business closings
Illinois’ ranking was partly the result of its average corporate income tax rate of 9.5%, the second highest in the nation.
Risk and reward
If you are starting a new business in Illinois, you are probably taking all these factors into account when you make your plans, and you’ve still decided that this is the place you want your business to be. And the state government figures we cited above prove that you are far from the only person who has made that kind of decision. The owners of all these new businesses weighed the risks against the potential rewards and decided that starting a new business is worth it.
Still, it is wise to prepare for the risks as much as you can, as early in the process as you can. This means choosing the right type of legal business structure, and planning carefully so that you and your business will be protected.