A 10-Step Guide to Starting a Business Saves the Opening for Last

The U.S. Small Business Administration offers a free guide that breaks the job of starting a business into ten steps.¹

The guide says starting a business takes planning, some key money decisions and a series of legal tasks. Each step links to a detail page.¹ Business-guidance sites outside the government list a similar order, so the checklist matches common practice.³⁴

This story is based on the SBA’s legacy version of the guide, last updated May 3, 2023. The agency’s current page may be worded or organized differently.¹ Here are the ten steps, grouped into six things you can start on this week.

1. Find out whether the idea has a market. Market research comes first. The SBA says it shows whether your idea could become a successful business. That means learning about potential customers and about businesses already operating near you, so you can spot an edge over the competition.¹ It is cheaper to learn that the town already has four food trucks before you buy the fifth.

2. Write the plan, then use it to size up the money. The SBA calls the business plan the foundation of the business: a roadmap for how you will structure it, run it and grow it. It is also how you convince people that working with you or investing in the company is a smart choice.¹ The plan helps you figure out how much money you need to start. If you don’t have that amount, the guide says you will need to raise or borrow it.¹

3. Decide where you’ll operate and how you’re set up. A storefront and an online store both count as locations in the SBA’s guide. The agency says the choice could affect your taxes, your legal requirements and your revenue.¹ Then pick a legal structure. According to the guide, that choice affects your registration requirements, how much you pay in taxes and your personal liability, which is how much of your own money could be at risk if the business runs into trouble.¹

4. Name it and register it. First check that nobody else is already using the name. The SBA says that if you do business under a name different from your own, you need to register with the federal government and maybe your state.¹

5. Sort out tax IDs, licenses and permits. The SBA likens an employer identification number, or EIN, to a social security number for your business. It is used for things like opening a bank account and paying taxes. Some states also require a state tax ID, though not all of them do.¹ Sources outside the SBA say an EIN is needed to open a business bank account and to apply for licenses and permits. One of them, LegalZoom, says sole proprietors may not need one.³⁴ Licenses and permits are not one-size-fits-all. The SBA says what you need varies by industry, state, location and other factors.¹

6. Open a business bank account. The SBA says a small business checking account helps you handle legal, tax and day-to-day issues. It adds that the account is easy to set up if your registrations and paperwork are ready.¹

The guide ends with a final line, Open shop, which marks the point where the business is officially open.¹

None of this guarantees a business will succeed, and the details depend on where you live and what you sell. But the guide is free, the order is clear, and the first step is mostly gathering information.