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Although it’s the least densely populated state in the U.S., with a capital city whose population barely cracks 60K, entrepreneurs ought to consider Wyoming as a location in which to start a new business. Though it takes a special breed to prefer a quiet, peaceful state teeming with wildlife over a bustling metropolis, the Cowboy State does have plenty to offer.
For one, Wyoming has the best business tax climate in the nation, according to Tax Foundation’s 2020 Business Tax Climate Index, and it’s not really even close: the state is #1 in two subcategories (corporate and individual income tax, which Wyoming does not have), and #6 in another (sales tax). With such a low state tax burden, small business owners in the state can focus on other important things, rather than cash flow issues.
Then there’s Wyoming’s natural beauty: the state is home to Grand Teton National Park, much of Yellowstone Park, and many other stunning state parks and nature areas, making it an outdoor recreation lover’s dream. You won’t have to worry about traffic jams on the way to the parks, either.
In order to give budding entrepreneurs a boost in the Cowboy State, we’ve put together this comprehensive guide to starting a business in Wyoming which covers all the necessary steps in turning your great idea into a living, breathing entity. We’ve also provided a wealth of links to funding sources, small business organizations, and other key resources to increase your odds of success.
Wyoming small business statistics at-a-glance
- 66,653 small businesses are in operation in Wyoming, which is 98.8% of the state’s total businesses.
- 131,499 Wyomingites are employed by small businesses, accounting for 63.1% of the state’s private workforce.
- The number of small business proprietors in Wyoming increased by 2% between 2016 and 2017.
- Accommodation and food services is Wyoming’s top small business employment industry, followed by healthcare and social assistance, and construction.
- 81.66% of Wyoming startups survive their first year of existence.
- Wyoming businesses create an average of 4.79 new jobs in their first year.
- The rate of new entrepreneurs in Wyoming is 0.45%, which is tied for 2nd in the nation with California.
- Tax Foundation named Wyoming the best small business tax climate due to the fact that it doesn’t administer income or corporate taxes.
Starting a business in Wyoming in 12 steps
1. Develop an idea
Every successful business starts with a good idea. Ask yourself these questions:
- Which product or service can your business provide that doesn’t already exist on the market?
- How does your business idea refine an existing product or service?
Determine your personal strengths and interests: developing an idea that suits your personality and positive traits will provide motivation to put in the long hours necessary in addressing the myriad challenges you’ll face in getting your business off the ground.
Figure out how to market your expertise: if your business idea is not something you totally believe in and can sell effectively, it will be much harder to succeed.
2. Do the research
Once you have an idea, it’s time to put it through the wringer and decide if it’s viable in the market. Conduct market research to arrive at answers to these key questions:
- Is there a demand for your product/service in Wyoming?
- Who is your target market?
- Do existing businesses in Wyoming offer a similar product/service?
- What makes your business unique compared to the competition?
Coming up with satisfactory answers may require refinement, or even a total overhaul, of your original idea. Be patient: you’ll only want to proceed with the next steps after determining that a niche exists in the Wyoming market for your business idea.
3. Draft a business plan
Now it’s time to write the blueprint of your business. A great business plan should chart the path of your company from infancy to success while being able to attract investors to provide financing.
Your business plan ought to include the following sections:
- Executive summary – An overview of your business and why it will be successful
- Description of business – Explain the advantages of your business and the problems it solves
- Market research – Provide research on your industry, target market, and potential competitors
- Organization and staff – Detail the nuts and bolts of your business; how it’s structured and who will run it
- Product or service description – State what you are selling or offering
- Marketing plan – Explain your strategy for attracting customers
- Fundraising – The money you’ll need in the next five years to grow your business and how you’ll spend it
- Financial forecast – Data and balance sheets providing a financial forecast for your business
- Appendix – An optional section with supporting and/or requested documents like resumes, letters of reference, permits, etc.
Plan on running your business well
4. Secure funding
Every business needs money to get off the ground. In fact 82% of businesses that fail do so because of a lack of cash flow, U.S. Bank found in a recent study. Your business plan should include a detailed estimate of the funds you’ll need to cover expenses for at least a year, so now it’s time to acquire the money.
If you aren’t wealthy enough to self-fund your business, you can choose from a number of other funding options. These include a loan from the U.S. Small Business Administration, taking out a loan from a commercial bank, launching an equity crowdfunding campaign, or securing funding from an angel investor or venture capitalist group active in Wyoming.
An angel investor is a wealthy individual who invests their personal finances in a startup, typically in the beginning stages, whereas a VC is a group of investors that will fund a business throughout its existence.
Which route you choose depends on the specifics of your business: angel investors typically invest smaller sums to help get a startup off the ground, while VCs invest larger sums of money in exchange for a greater say in the operations of a business. Smaller startups usually opt to pursue funding from angel investors. Wyoming has a small, yet active investment community, proving that finding access to capital in the state is not as difficult as you’d think.
Wyoming Angel Investors and VCs
- Breakthrough 307 – A young angel investment group looking to diversify Wyoming’s state economy through access to capital for local startup companies.
- Wyoming Angels Network – A network of accredited investors that specialize in funding early-stage tech companies.
- Rocky Mountain Venture Capital Association – A large network of investors dedicated to financing companies throughout the Rocky Mountain region, which includes Wyoming.
Additional Investor Resources
- AngelList: Wyoming Angel Investors – A directory of 4,925 angel investors open to investing in an early-stage Wyoming startup.
- Wyoming Smart Capital Network – A program offering up to 100K in investment capital to eligible small businesses in 8 counties across the state.
5. Decide on a legal business entity
The form of business entity you choose will affect many factors going forward. There are 3 main options to decide from:
- Sole proprietorship – The name for running a business by yourself. Legally, you and your business are one and the same, with no separate legal entity for your business. A partnership is legally identical to a sole proprietorship, except that it comprises two or more people.
- Corporation – A complex legal structure that is a separate entity (providing legal protection to owners) from the owner and comprises directors, officers, and shareholders.
- LLC – AKA “Limited Liability Company”, this is a hybrid entity between a sole proprietorship and a corporation that possesses advantages of both. An LLCs provides the liability protection of a corporation, yet isn’t subject to double taxation as the profits go through your personal tax return.
Nowadays, LLCs are the option of choice for small business owners as they are easy to manage and provide the benefits of a corporation while lacking their complex structure. Taxwise, they operate more like a sole proprietorship.
You may want to consult with an attorney to help decide which entity works best for your business.
6. Register your business
After deciding on the business structure that’s right for your company, you can register it with the state of Wyoming. This process follows different steps depending on your chosen business entity.
For sole proprietorships
Sole proprietors using their legal name to do business in the state may do so without filing with the state government, however, those that intend to use a business name different than their legal name are given the option to file a trade name with the Secretary of State.
First, run a search using the Wyoming Secretary of State Business Entity Search to verify that your chosen business name is distinguishable from others on record. Then, you can fill out this form and mail it in to the SoS. The filing fee is $100.
For LLCs and corporations
Everyone forming an LLC or corporation must first appoint a registered agent to handle process notices and other government correspondence on behalf of the business. The registered agent must be a firm or individual authorized to do business in Wyoming and have a physical address in the state.
Next, run a search to confirm that your business name is available for use in the state. Then, you can file the paperwork necessary for the formation of your business.
An LLC is formed in Wyoming through the filing of Articles of Organization with the Secretary of State. You can file the articles online, or through the mail. The filing fee is $100 for mail filing or $102 for online filing.
A corporation is formed in Wyoming through the filing of Articles of Incorporation with the Secretary of State. This can be done online, or by using postal mail. The filing fee is $100 for mail filing or $102 for online filing.
7. Acquire federal and state tax IDs
Now you should obtain a Federal Employer Identification Number (EIN), which is like a social security number for a business and allows you to open bank accounts, handle payroll, and file taxes.
Each state has its own laws and taxes regarding businesses. Wyoming has one of the best state business tax climates in the U.S. but there are some tax obligations, depending on the nature of your business.
If your business sells goods in the state, you are required to register with the Department of Revenue in order to collect sales tax. This can be done through the Department of Revenue website.
Furthermore, LLCs and corporations must file an annual report and pay a license tax. Visit the Wyoming SoS Business Center to file your annual report.
Tax-ready all the time
8. Open business banking and credit accounts
Opening a bank account for your business is crucial because it allows you to separate company assets from your personal assets, and makes filing taxes a lot easier. This is a recommended step, even if you are operating a sole proprietorship.
It’s also a wise idea to obtain a credit card for your business because it will help you isolate business expenses and build up credit for your company, which may help in securing investment in later stages.
Banks operating in Wyoming good for small businesses
We also recommend Novo Bank
9. Get the necessary licenses and permits
Depending on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. For example, a restaurant will need a liquor license, and a pawn shop will need a reseller’s license. The paperwork may prove a hassle, but it’s a necessary ordeal that will protect you from fines, lawsuits, and other legal hazards.
Wyoming does not issue a statewide business license, but many businesses are required to get specialty licenses or permits if they operate in a regulated industry or profession.
The Wyoming Business Council has a handy Licensing and Permitting FAQ that discusses many of the major licenses and permits that businesses will need to operate in the state, along with links to the issuing agencies.
10. Choose a location
Whether you are running an online business or opening a restaurant, location is everything. Be aware of the demographics of the neighborhood or town that you are considering: Are the local residents likely to visit your business? Will nearby competitors take a share of your potential profits?
Unless your business is online-only and location doesn’t matter, you’ll probably want to live and do business in one of the five Wyoming cities with populations topping 20K: Rock Springs, Gillette, Laramie, Casper, or Cheyenne.
Cheyenne is a fine choice for entrepreneurs, with a low cost of living, short commute times, lots of rodeos to attend in the area.
11. Get insured
No matter what type of business you form, buying insurance coverage to protect yourself in the case of property damage or legal action is a good idea. In fact, businesses with employees are required by the federal government to have two types of insurance, while others are strongly encouraged, or required at the state level, depending on your business type. Consult with a licensed insurance agent to find out which types of insurance you should get.
Required forms of insurance:
- Workers’ compensation: Covers medical costs and disability benefits if an employee is injured or becomes ill on the job.
- Unemployment insurance: Provides benefits to workers after a loss of job through no personal fault.
Recommended forms of insurance:
- Professional liability insurance: Covers losses as a result of property damage, medical expenses, libel, slander, and negligence claims.
- Commercial property insurance: Covers property damage to business owned properties and possessions as a result of fire, theft, or storm.
- Disability insurance: Provides short-term benefits for employees suffering an illness or injury. Required in certain states such as California, New York, and Hawaii.
12. Develop an internet presence
Establishing an identity on the web is an important investment in a business’s future development. Here are some key steps in the process:
- Register a domain name for a company website (You can use domain.com, Bluehost, GoDaddy.com, Namecheap.com). Design the website and fill it with content.
- Create profiles on the popular social media services (Twitter, Facebook, Instagram)
- Register a Google profile for your business
- Create accounts on review sites such as Yelp, Google Reviews, and TripAdvisor
More than a website builder
Wyoming Small Business Resources
- Wyoming Secretary of State: Business Center – Register your business online with the state government.
- Wyoming Department of Revenue: Sales and Use Tax – Apply for a license to collect sales and use tax if your business sells goods.
- Wyoming Business Council: Licensing and Permitting FAQ – All you need to know about applying for specialty business licenses and permits in Wyoming.
- Wyoming Small Business Development Center – A statewide organization that aids aspiring entrepreneurs through free consultations and holding events and seminars.
- NFIB: Wyoming – The nation’s leading small business advocacy group’s Wyoming page, where you can learn about issues affecting the local small business community.
- SCORE: Cheyenne – The Cheyenne chapter of the nation’s top business mentoring network, where business owners can take advantage of free mentoring services.
- Wyoming Technology Business Center – Established in 2006 by the University of Wyoming, the WTBC is one of the few business incubators in the state.
- The Lovell Inc. Incubator – A small, yet charming incubator and coworking space based in the small town of Lovell, Wyoming.
- The Cowork Space – A coworking space with a conference room, plenty of desk space, high-speed internet, and a private phone booth in Jackson Hole, Wyoming.
- The Durlacher – A classy community hub and coworking space in Laramie that allows interested applicants to take a tour of the premises before signing up for a membership, which costs only $250 a month for a desk and locker.