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In this guide, we'll take you through starting a business in the Hoosier State, from developing your business idea to registering your business, securing funding and more.
With a population of over 6.8 million and a gross domestic product of $355 billion, Indiana is home to various industries, including manufacturing, healthcare and agriculture. In fact, Indiana is also a launch pad for more than 525,000 small businesses, which make up 99.4% of all companies within the state.
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Start a business in Indiana in 8 steps
01. Come up with a business idea
Choosing a business idea to start in Indiana will depend on several factors. For example, is there a demand for your intended product or service in your location - in which case is it worth considering small town business ideas or not? What is the best way to provide the right solution to your audience?
While choosing a business idea based on your experience and strengths is always a good idea, it’s also essential to consider where you plan to build your business. Selling specific products or services in Indiana may pose different challenges and a different approach than selling the same in New York or another state. Here are some business ideas that may be relevant to the state of Indiana:
Education: With several universities and colleges in the state, there's a demand for education-related businesses, or ways to make money as a teacher, like tutoring services, online courses and educational software.
Renewable energy: As the world continues to prioritize sustainability, Indiana offers opportunities for new and unique businesses focused on renewable energy sources, such as solar panel installation, wind turbine maintenance and energy consulting. Investing in these green energy solutions could help reduce Indiana's carbon footprint while creating a profitable business.
Healthcare: Healthcare is a growing industry in Indiana and there are opportunities in areas such as medical billing, home healthcare and medical equipment supply.
Agriculture: Thanks to its rich agricultural heritage, Indiana is a great place to start a farming or food processing business. Consider offering agri-tourism activities to give visitors a taste of Indiana's farm life and explore ways to make money as a farmer.
Sports and recreation: Indiana is known for its love of sports, providing opportunities in sports equipment sales, fitness centers, coaching businesses and even sports card businesses.
Creative industries: Given Indiana’s thriving arts and culture scene, you may find opportunities in graphic design, marketing business, advertising and event planning.
Logistics and transportation: Indiana's central location and transportation infrastructure make it an ideal location to start a business in the logistics and transportation industry (such as starting a trucking business). Consider starting a freight brokerage or logistics management company.
Technology: With its growing technology industry, alongside several major universities and research institutions in the state, Indiana offers a wealth of talent and resources to support your technology startup.
Looking for more business ideas to start in Indiana?
02. Choose a business entity
Starting a new business in Indiana requires choosing a business entity, which will affect your personal liability, taxes and management structure.
As you consider which entity type best suits your business needs, it may be helpful to consult with a professional accountant or lawyer who can guide you through the pros and cons of each type. One option is to work with a third party like Legal Zoom to help guide you through the process.
Here are the five primary business types available in Indiana:
Sole proprietorship: This is the simplest and most common type of business entity. As a sole proprietor, you have complete control over your business, but you're also personally liable for any debts or legal issues.
Partnership: A partnership may be the best option if you have a business partner. In a partnership, you share control, profits and losses, alongside legal and financial responsibility.
Limited liability company (LLC): Starting an LLC is a popular choice for small business owners because it offers the liability protection of a corporation but is taxed like a partnership. As an LLC owner in Indiana, you're not personally liable for the company's debts or legal issues.
S corporation: An S corp is similar to an LLC regarding liability protection, but it's taxed differently. With an S corp, profits and losses pass through to the owners' personal tax returns.
C corporation: A C corp is a separate legal entity from its owners and provides the most liability protection. However, it can be more complex and expensive to set up and maintain without the help of an accountant.
When selecting a business entity type, it's important to consider your long-term goals and plans for growth. For example, will you expand to multiple locations or bring on additional partners? Do you plan to offer stock options to employees or investors? Considering these factors, you can select the entity type that suits your unique business needs and goals.
03. Determine your business model
After selecting a business entity, decide on the business model you will use to operate your business.
The best business model for your business may depend on the current market conditions and your personal skills and interests. However, here are some business models that may be relevant to the state of Indiana:
Franchising: Franchising is a popular business model in Indiana, with many established brands in the state. This model allows you to benefit from an already established brand, reducing the risk of starting a business from scratch. Learn more about how to start a franchise business.
eCommerce: Sell online through your own online store, a third-party marketplace—or both.
Service-based business: Service-based businesses such as consulting, a homecare business, coaching or tutoring are popular in Indiana and can be started with minimal startup costs.
Home-based business: Starting a home-based business idea allows you to keep overhead costs low while having the flexibility of running your business how you want to.
Business-to-business (B2B): Sell products or services to other businesses rather than directly to consumers. B2B transactions typically involve larger quantities of goods or services than in a B2C (business-to-consumer) model.
04. Name your Indiana business
When naming your business, there are several factors to keep in mind when choosing a business name:
Keep it simple: Choose a name that’s easy to pronounce and spell so that customers can easily recall and recommend your brand to others.
Make it memorable: Choose a unique name that stands out from competitors. Consider how your business name will appear as a logo design and if it will appeal to your audience.
Check availability: Once you’ve settled on a clever and catchy business name, perform a business name availability search via Indiana’s INBiz website to ensure that it’s not already in use. Additionally, check if your business name is available as a domain name.
Check for trademarks: Make sure another company does not already protect the name you choose by performing a trademark search.
Avoid geographical limitation: Avoid names that include the name of the city or state in it, as it may limit you from expanding your business in the future.
Be creative: Have fun and create a name that represents your business and what it stands for.
It's important to remember that the above tips are general guidelines and that the requirements for selecting a name may vary depending on your business type and location. Therefore, you may want to consult a business advisor or a branding expert to ensure that your chosen business name is compliant and appropriate.
Looking for inspiration? Try Wix’s business name generator tool.
05. License and register your business in Indiana
You’re ready to make your business official with the IRS and the state of Indiana. Registering your business and obtaining the necessary licenses is not complicated, but it can be tedious. If you’re nervous about registering your business, seek the advice of a legal or financial advisor who’s familiar with registering a new business in Indiana.
Indiana’s INBiz site offers a self-service guide for registering a new business with step-by-step instructions.
In general, to register a business, you’ll need to follow these steps:
Register with the Indiana Secretary of State: You can register your business online or by mail. You’ll need to provide information like your business name, structure and address.
Obtain an EIN: Obtain an employer identification number (EIN) for federal tax purposes. You can apply for an EIN through the Internal Revenue Service (IRS).
Obtain licenses and permits: Depending on your business type and location, you may need to obtain specific licenses and permits from the state and local governments. This can include licenses for particular industries (such as the food industry), professional licenses and permits for certain activities (like construction, selling goods or conducting business operations in specific locations).
Register for taxes: Register for taxes with the Indiana Department of Revenue.
Get necessary insurance: Explore your insurance options. You can find more information on insurance on the Indiana Department of Insurance site. Note that if you have employees, you must get workers’ compensation insurance and unemployment insurance.
06. Write your business plan
Developing a business plan may be one of the most important steps you’ll take toward long-term success in launching and operating your business.
A well-crafted plan outlines your vision and the strategies that will help you achieve your goals. It's an essential tool for maintaining focus and anticipating challenges as you navigate the ups and downs of entrepreneurship.
In short, your business plan helps you to:
Define your vision: The plan should encompass a clear vision statement articulating your business's values, goals and aspirations. This ensures that you stay focused on your core mission, even as you make strategic decisions that impact your company's future.
Attract investors and partners: A clear business plan can entice investors and partners who share your vision and believe in your potential for success. By including a thorough market analysis, a detailed financial plan and a clear path to profitability, you can demonstrate the viability of your business and secure support from others.
Establish a growth plan: Your business plan should lay out a clear growth roadmap, including marketing, sales and product development strategies. This enables you to stay on track while seeking new opportunities and expanding your customer base.
Anticipate and mitigate risks: The plan should also incorporate a risk management plan that identifies potential challenges and outlines strategies for mitigating them. By proactively anticipating potential obstacles and devising contingency plans, you can avoid costly mistakes and stay on track toward achieving your objectives.
Measure progress: Your business plan should include clear benchmarks and performance indicators for measuring success, such as revenue targets, growth milestones and customer acquisition goals. Monitoring your progress against these metrics will help you stay motivated and focused while ensuring your business remains on track for long-term success.
07. Secure business funding in Indiana
There are several ways to fund a business in Indiana. Some of the options include:
Personal savings: Use your personal savings to fund your business. This is often the first step for many entrepreneurs.
Small business loans: Look into small business loan options from banks, credit unions and other lending institutions. The Small Business Administration (SBA) also has loan programs that can help you secure funding.
Crowdfunding: Raise funds from multiple people through a crowdfunding platform such as Kickstarter or GoFundMe.
Business incubators and accelerators: Look for business incubators or accelerators in Indiana. These organizations provide funding and resources for startups.
Small Business Development Center (SBDC): The SBDC is a valuable resource for small business owners, providing consulting, training and information on accessing funding.
Angel investors and venture capital: Find angel investors or venture capital firms that invest in businesses in your industry or region.
Government grants: Look into government grants available for small businesses in your industry or region.
Family and friends: Consider asking family and friends to invest in your business.
State-based funding: The Indiana Economic Development Corporation (IEDC) and other state-based organizations provide small businesses funding and incentives.
It's important to keep in mind that each funding option comes with its own set of requirements and qualifications. Consult a financial advisor or a business mentor to explore the best funding options for your business.
08. Create a business website
Your business can thrive in Indiana with the right strategies and tools, starting with a business website. Building a website is a cost-effective way to promote your products and services, attract potential customers and build brand awareness. Furthermore, having a professionally designed website can establish brand credibility and help you stand out from competitors.
When creating your business website, consider choosing a business website template that reflects your brand's personality and unique characteristics. Customize the color scheme, typography, visual elements and written content as you see fit.
As you do, remember that it's important to create high-quality content that resonates with your target audience, including detailed product information and insight into your core values.
Once your website is launched, use various promotional strategies like email marketing, SEO and social media campaigns to increase your site’s visibility. This should ultimately help to attract relevant audiences who are ready to make a purchase.
Read also: How to make a business website
Business website in Indiana example
For inspiration, discover how this Indiana-based business is utilizing Wix to fuel its brick-and-mortar business online.
The Garage Food Hall
Located in downtown Indianapolis, The Garage Food Hall brings together the best food vendors Indianapolis has to offer under one roof—but not just any roof. The Garage Food Hall is located within what was once the iconic Coca-Cola bottling plant. This unique concept allows customers to experience a diverse culinary selection of foods from more than 20 food, beverage and retail vendors.
How to start a business in Indiana review
Looking to start a business in another state? Check out how to start a business in Pennsylvania, how to start a business in California or how to start a business in Virginia.
How to start a business in Indiana FAQ
Is Indiana a good state to start a small business?
It can be. Indiana has a strong manufacturing sector and is often referred to as the "Crossroads of America." The state is known for its expertise in automotive, aerospace, machinery, and other manufacturing industries. It offers a skilled workforce, a supportive supply chain, and resources for manufacturing businesses.