First Steps to Starting a Business

You can start a business with these simple steps; it's easier than you might think. This discussion assumes you know what type of business you want to start. That can be easy or difficult.

After you have your business idea, you will need a business name, because everything else depends on your name. Then decide on a location - home, leased space, purchased building - and go on to the legal and financial tasks.

Select and Register Your Business Name

Florist in flower shop, writing Open sign, mid section
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Most business owners start out with a business name, but before you solidify that name by putting it in a logo, on business cards, and on your website, make sure it will be a good name for many years. You also want to be sure that name is not being used by someone else. ​Selecting a name, registering that name, and possibly trademarking the name mean that you have made a commitment to that name. Read this section before you select that business name.

Find a Business Location

Unless you are working out of your home, you will need a location for your business. It might be an office or a retail space or a warehouse. Here are the steps to take to find that location, negotiate the lease, and get favorable terms.

Or Start a Home-based Business

 If you want to start a business in your home, there are some special issues you will need to deal with. This article discusses things like zoning, travel and business expenses, and especially taking a tax deduction for a home business space. 

Select Your Business Legal Type

Here is a checklist to help you decide what type of business legal entity you will start. The types of entities range from the simplest sole proprietorship, through partnerships and limited liability companies, to the complicated corporation and s-corporation forms.

Apply for Your Tax ID Number (Employer ID)

One of the first steps in business start-up, after you have a name and a business address and you know your legal form, is to fill out a tax identification application (sometimes called an employer ID. This number acts as your unique business identifier on all types of registrations and documents, and most banks want you to have this number before you can set up a business checking account and apply for a loan.

Apply to Your State for a Sales Tax Permit (for Taxable Items, Services)

If you are selling any products or services that are subject to sales tax in your state, you must collect tax from customers and pay the state back that tax.  Here's what you need to know about state sales tax.

Get a Business Checking Account

After you have applied for your tax ID number, you can use that number to set up a business checking account. Here are some factors to consider when setting up that account.

Obtain Local Licenses and Permits

Learn about what local licenses and permits you might need to apply for during the start-up of your business.

Create a Marketing Plan for Your Business

Before you can start selling your products or services, you will need to put together a plan detailing exactly what you are selling, who you are selling to, defining your competition, and defining exactly how you will advertise and promote your products/services during your first year of business and beyond. Having a marketing plan in place will help a potential lender see that you are serious about selling and it will give you a plan of attack to work from as you get started.