Simple Steps to Start a Business

Work through this checklist, and you'll have a solid foundation for building your business.

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13 simple steps to start a business

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Updated on: May 20, 2024
Read time: 5 min

If your side hustle has grown, your hobby has started making money, or you've been tinkering with an idea for months, it may be time to start a business. Here's a 13-step checklist to help you get your new business off the ground.

1. Get into a business mindset

Do whatever it takes to convince yourself that this is not a random thought, a little side gig, or "just a hobby." If you're going to run a successful business, you need to start thinking like a business owner, and that means getting serious about marketing, cash flow, and planning. You may also want to look inward and address any fears—or learning needs—you may have specific to starting the business.

2. Research the market

Take a step back and look at the business you want to start. Is there a market for your product or service? Who are your potential customers or clients, and how will they find you? Who is your competition, and what can you do differently or better? Bounce your ideas off some other business owners and see what they say. Listen to feedback and fine-tune your concept—but give yourself a deadline so you don't get stuck in this step.

3. Run the numbers

Figure out how much money it will take to get your business up and running and how much you will need to stay in operation until you make a profit. If you don't have enough cash, explore ways to finance your business, which may include securing a bank loan or SBA (Small Business Administration) loan, attracting one or more investors, or soliciting family and friends, either individually or via crowdfunding.

4. Write a business plan

There are plenty of templates available online or at the library. The folks at your local SCORE center also can help. (SCORE is a nonprofit whose volunteer mentors are committed to helping small business owners succeed.) It's tempting to skip this step, but writing a business plan will help you identify and solve any weaknesses in your business idea. And it's an essential document if you're looking for a bank loan, grant, or even a contribution from family and friends.

Attorneys help you manage the risks of being a business owner. An attorney can advise you on whether your business should be a corporation, an LLC, or something else. An attorney can define your relationship with your co-owners, review leases, and set you up with the right kinds of contracts and forms. And your attorney is someone you can call with additional questions after your business is up and running.

6. Choose a great name

This is one of the more creative steps. Your business needs the right name. A good business name is unique, memorable, easy to pronounce, and complies with your state's rules on business names. For example, most states won't let you choose a name that's potentially misleading or is the same as another business's name. Also, consider whether the name will be understood by online users, including social media.

7. Form your business

Forming a business means filing paperwork with the state and paying a fee. Within a few days to a few weeks, you'll receive confirmation that your business is official. What's required for doing business in the state will vary by state.

8. Get a tax ID number

Most businesses are required to have a federal tax ID number, also known as an Employer Identification Number, or EIN. You can apply for one on the Internal Revenue Service website, or you can get your tax ID number as part of a business formation package.

9. Open a business bank account

Search banks in your area for business accounts with low fees and/or bonuses for signing up. While you're at it, get a business credit card that offers reward points. Don't use your personal bank account for your business banking. You'll have a mess at tax time, and you could invalidate the liability protection you get from having a corporation or LLC.

10. Talk to an accountant

Don't wait until your first tax return is due to talk to an accountant. A good accountant can advise you on the best tax filing status for your business, help you stay on top of deadlines, and answer questions you may have about business deductions, payroll, and state and local taxes.

11. Check with your state taxation department

You may need to open an account for sales tax, payroll taxes, and any other taxes your state collects.

12. Get the necessary business licenses and permits

There may be local business licenses, permits, or tax accounts that are required for your business. You can contact your city or county to find out what's required in your industry or use an online resource that can do the legwork for you.

13. Protect yourself with business insurance

Running a business means mitigating risk, and business insurance should be a part of your strategy. General liability insurance can help cover things like damage to someone else’s property and accidents involving non-employees. 

Beyond that, most states require workers’ compensation insurance to cover work-related illness or injury at businesses with employees; be sure to learn the law in your area. Commercial property insurance can help protect your business equipment and inventory. It could also help keep your business going in the event of an accident, injury, or damage from fire, vandalism, and more.

We partner with NEXT Insurance, and business owners who form with LegalZoom can get a free insurance quote within their LegalZoom account.

14. Set up payroll if you have employees

Many small businesses use payroll services to simplify the process and make sure everything is done right.

Owning a small business is an exciting journey. When you start with a good plan and a solid legal and financial foundation, you'll be setting yourself up for success.

Unlock the potential of your business with special offers from LegalZoom’s trusted partners. Discover a wide range of services, from business banking and insurance to websites and payment systems. Let LegalZoom’s partners help you turn your big idea into a big business.

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This article is for informational purposes. This content is not legal advice, it is the expression of the author and has not been evaluated by LegalZoom for accuracy or changes in the law.

44 days ago
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The request I made for formation…

The request I made for formation documents was taken care of immediately and professionally. They were very helpful in getting me what I needed.

Bruce Fleishaker
121 days ago
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I had the absolute pleasure of working…

I had the absolute pleasure of working with Maria as my business formation specialist at LegalZoom, and I couldn’t be more grateful for her support throughout the process of creating my LLC. From start to finish, Maria was patient, knowledgeable, and incredibly thorough. She took the time to answer every one of my questions—no matter how small—and walked me through each step with clarity and confidence. Starting a business can feel overwhelming, but Maria made the entire experience smooth and manageable. Her dedication, professionalism, and genuine care for her clients truly stood out. Thanks to her guidance, I felt supported and well-informed every step of the way. Thank you, Maria, for your outstanding service and for going above and beyond. You are truly an asset to the LegalZoom team!

Diego Louis
156 days ago
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Using Legal Zoom made my business…

Using Legal Zoom made my business formation very easy. The program is user friendly and explains every step clearly.

Anna Silvia Mejia
185 days ago
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Legal Zoom is a true one stop shop

This is the second company I have formed using Legal Zoom. They say what they are going to do and they do it. Legal Zoom provides all the tools and services you will need to quickly start your company, allowing you to focus on your business. The business formation specialist I spoke with, Juan was great; extremely knowledgeable and professional while giving me the feeling that I was talking with an old friend.

Steve Robbins
189 days ago
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The agent was extremely helpful and…

The agent was extremely helpful and gave me the info that I was looking for. As soon as I got off of the phone with her, I got the official acceptance of my business formation!

Joshua Roberts
200 days ago
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Seamless Support from Day One

I was impressed by how quickly Alan, my Business Formation Specialist, reached out to me. Having support from day one is incredibly reassuring, especially as I navigate starting my first business. I look forward to seeing how my relationship with LegalZoom and my experience with their services evolve.

Rosemart Aoki
214 days ago
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ClarisseTravel Wine Tourism Agency

I recently utilized LegalZoom's services. The platform was user friendly, making the complex process of business formation straight forward and accessible. The customer service team was knowledgeable and responsive, promptly addressing all my inquiries. The efficiency and professionalism demonstrated by LegalZoom have provided me with confidence and peace of mind. I highly recommend their services to anyone seeking reliable business formation assistance.

ClarisseTravel LLC
214 days ago
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The business formation specialist…

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