Multiracial business partners using tablet in florist shop
Multiracial business partners using tablet in florist shop

how to start a business in the Midwest

The Midwest is a great place to start a business—here’s how to do it

More than 55,000 Companies Launch in Ohio and Neighboring States a Year.1 Here’s why.

If you’re thinking about starting a business, the chances of success may be better in the Midwest. Nationally, 20% of startups fail in their first year, and just half make it to the fifth year.2 So surviving that first year, and five years, is a major accomplishment.  

Being located in the Midwest offers some unique benefits to new business start-ups. In addition to potentially lower costs compared with the coasts, particularly for real estate, the region provides access to more than 50 million consumers.3 It is also home to an impressive list of Fortune 500 companies that can help startups grow, from Procter & Gamble in Cincinnati, OH, to McDonald’s in Oak Brook, IL.

And practically speaking, in smaller cities, many business owners engage more in the community and events and may find it easier to connect with customers to build a base for what they do.

That said, you should know that due to the higher risk rate, startup loans can be harder to secure. Are you interested in learning more? Here’s a step-by-step guide designed to help you get started.

Come up with a better-than-good idea

Many entrepreneurs think of themselves as problem solvers. They identify an unmet need or challenge and resolve it through a new, uniquely surprising product or service. A few basic guidelines can ensure your great idea will resonate with your target customer:

  • The business concept needs to be easy to understand and relevant to the target customer. A store specializing in beach products would probably struggle in Louisville, KY, for example.
  • It should have a viable target market and secondary customer prospects to target with expansion (think working mothers, but also caretaking grandparents).
  • The solution it provides should be highly relatable.
  • Timing is a factor. Ideally, the business should address an anticipated need, either making a current task easier or preparing for requirements that will arise from events in the economy, environment, or culture. Platforms for “telehealth” services are a good example.

Some business ideas can revolutionize an industry. Others may simply provide a familiar product but at a better price and quality – but even those should be planned with the next steps in mind.

Conduct market research to make sure customers will want what you’re selling and get a sense of the competitive landscape. The real estate, education, and agriculture industries have lower failure rates than retail and manufacturing.4 And the technology sector, while thriving, is teaming with ambitious concepts. You have to stand out.

Smart resource: Try out this business startup guide by USA.Gov.

Write a business plan

Whether writing a traditional business plan or a less-detailed lean startup plan, entrepreneurs must outline a realistic business structure that potential partners, investors, and/or lenders can easily understand.

A typical business plan should include the following:

  • The goods. A detailed description of the company, products, and/or services offered. The overview should include the problems the business solves. If these are proprietary services, then include copyright or patent information.
  • The team: An introduction to everyone on the startup team with a description of their roles that highlights the industry expertise each brings to the table (including company names and timelines). Demonstrating the passion each brings to the new venture is powerful and can be accomplished through personal anecdotes that explain why each player is pursuing the endeavor.
  • A go-to-market plan. Describe your target market and how you will attract and retain customers – location matters. If the company is distributing product, Louisville and Columbus are centrally located for the Midwest and MidAtlantic states. Indianapolis and Chicago are good launch points for distribution farther west.
  • Financial projections. Provide realistic revenue generation and financial outlooks, with supporting assumptions, including five-year projected income, balance sheets, cash flow, and expenses. A best practice, when possible, is to boil down the bottom-line figures into applicable units. If the company expects to generate $100,000 a quarter selling canned coffee drinks, for example, it should provide the price per can, so backers can project how many units must sell. Costs, meanwhile, vary by many factors, including location. Some Greater Cincinnati suburbs, such as Florence, KY, may offer better headquarter incentives than its burgeoning Over-the-Rhine district.

Lastly, take advantage of the free tools available online for writing a business plan, including templates. Just be sure to write the plan in your own words. A canned template is pretty easy to spot and will cost you credibility.  

Smart resource: The Small Business Administration’s (SBA) business plan guide.

Line up financing

While not everyone needs a loan to start a business, having extra cash on hand can prepare the start-up for unexpected hiccups, such as cost overruns. Before approaching any backers, entrepreneurs must prepare to prove they are (and have been) willing to back the risk themselves, by providing evidence they have invested their own money in the business.

Some businesses – startups in particular – often rely on independent investors who provide seed money in exchange for a return on their investment or a stake in the company. It’s advisable to consult a banking professional or attorney on effective partnership structures.

More traditional business models rely on small business loans to purchase equipment, secure a location, stock inventory, and pay employees. Lenders offer a variety of borrowing options, such as loans structured for minority ownership.5 True, it is typically more difficult to secure bank approval for a startup loan due to the higher level of risk, but that doesn’t mean you shouldn’t try. A proven concept will have a better chance at securing bank financing, and therefore it is worth exploring.

A startup would benefit from shopping around for a trusted lender with strong community ties, ensuring the bank team knows the right questions to ask, and the opportunities (as well as risks) unique to that area. A good lender will take the time to understand your vision and become a partner in your success.

Smart resource: This financing primer by Investopedia.

Prepare for the paperwork

Few people are passionate about paperwork. Still, starting a business will inevitably require dealing with red tape.

The amount of paperwork will vary by state, and sometimes even by municipality. For example, in Indianapolis, some businesses require specialized licenses (including dog groomers and salvage companies).

If you plan to have employees, you’ll need to pay unemployment insurance and obtain workers’ compensation insurance, regardless of the business address. Be sure to take both federal regulations and local laws into account to be in full compliance.

And importantly, be familiar with the state and local tax codes.

Smart resource: SCORE is a non-profit in nearly every community that provides business mentors familiar with the ins and outs of paperwork.

Open a business bank account

Before opening its doors (or launching its website), a startup should have a business bank account to suit the needs of its business plan. This account allows the business owner(s) to keep clear, accurate records of all expenses and profits – separate from personal finances.

Having a business account also helps keep things simple when it comes time to filing taxes because it provides a detailed account of gains and losses by quarter.

Note: A startup can take out a business loan from one bank and open a business account with another. However, some banks offer benefits to startups that bundle all their needs with that institution. A bank may, for example, offer a variety of SBA loans.

Don’t Choose a Bank. Choose a Partner.

The first year of a startup is critical. Seek out a bank that has a reputation for specializing in small business advocacy as well as development. Also, banks with deep roots in the community have historical knowledge of market dynamics and economic influencers, and therefore are equipped with the tools to manage specific, anticipated needs.

First Financial Bank knows Midwest business. To learn more about what we can offer, visit us here.

Other startup resources:


Ohio Department of Development


Ohio Secretary of State Business Resource Connection

Startup Network


Indiana startup information

Startup Savant

Launch Indiana

Indiana Small Business Development Center


Kentucky One Stop Business Portal

Kentucky Small Business Development Center

Start a Business

Kentucky Innovation


Illinois Department of Commerce and Economic Opportunity

Illinois Science & Technology Coalition

Small Business Consulting Resources

Chicago Business Hub

The information on this page is accurate as of January 2021 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.

1 “Number of new business establishments in the United States in 2016, by state,” Statista, June 3, 2020,; reviewed Oct. 5, 2020

2 “What Percentage of Startups Fail?” Review42, By Bobby Chernev, Sept. 10, 2020,; reviewed Oct.6, 2020

3 “Why the Midwest Drives Top Venture Returns,” By Pete Wilkins,, May 19, 2019,; reviewed Oct. 6, 2020

4 “Startup Failure Rate: Ultimate Report + Infographic,”;, reviewed Oct. 6, 2020

5 “Small Business Loans for Minorities,” FundBox,


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