How to start a business: the 9 steps

You don't need a business degree or a perfect plan. You need the steps in order. Here is the whole path — from idea to first customer — in plain English, with the free official sources for every state.

The short version:Pick a sellable idea → check the money → choose sole proprietor or LLC → register with your state → get a free EIN from the IRS → handle licenses and permits → register for taxes → open a business bank account → start getting customers.

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1. Pick an idea you can actually sell
Start from what people already pay for near you — cleaning, detailing, lawn care, handyman work, food, a trade. You don't need a novel idea; you need one where demand is proven and you can reach customers. Write it in one sentence: who you help and what you do for them.
2. Do a quick reality check on the money
Estimate what one customer pays you, how many you can realistically serve a week, and what it costs to deliver. That tells you whether this replaces income or supplements it. Most service businesses need far less startup cash than people assume — often under $2,000.
Estimate your take-home pay
3. Choose a business structure
A sole proprietorship needs no filing — you just start — but your personal assets are exposed if the business is sued or owes money. A single-member LLC costs a state filing fee (roughly $35–$500 depending on the state) and puts a legal shield between the business and your personal finances. Most owners of a real, ongoing business form an LLC.
Do I need an LLC?
4. Register the business with your state
If you form an LLC, you file Articles of Organization with your state's filing office (usually the Secretary of State), name a registered agent with an in-state address, and pay the fee. File directly with the state — a paid "filing service" just adds a markup on the same form. Processing ranges from instant to a couple of weeks.
Your state's exact steps and official link
5. Get an EIN from the IRS
The Employer Identification Number is free, issued online in a few minutes, directly from IRS.gov. You need it to open a business bank account, file taxes, and hire. Single-member LLCs still get one so they aren't putting a Social Security number on invoices and forms.
IRS — apply for an EIN (free) ↗
6. Handle licenses and permits
This is where it varies most. Depending on your trade and city you may need a local business license, a professional or trade license, a home-occupation permit, or a sales-tax permit. Check your state, county, and city — not just one. The right answer is usually a short list, not a mountain.
Requirements by business type
7. Register for state taxes
If you sell taxable goods or services, register for a sales-tax account before you collect anything. If you'll run payroll, register for state withholding and unemployment. States with no income tax still often have sales tax and annual reports — confirm what applies to you.
8. Open a business bank account
Bring your formation documents, EIN letter, and operating agreement. A separate account is what keeps the LLC's liability shield intact and makes taxes simple — never run business money through a personal account.
9. Get your first customers
The filing is a weekend; getting to a full schedule is the year. Set your pricing against the local market, claim a Google Business Profile, ask everyone you know for a first job or a referral, and pick one channel to work consistently. This is the part most guides skip and the part that decides whether the business survives.
Customer acquisition for new businesses

Get this as a plan built for you

FirstBearing turns these nine steps into a personalized roadmap for your exact business, state, and city — the right forms, the official links, what to charge, and one next step every day. Free to build, no card. $19.99/mo only if you want FirstBearing to run the rest with you.

Frequently asked

How much does it cost to start a small business?

For a service business you can often start for under $2,000: a state LLC filing fee (roughly $35–$500 depending on the state), $0 for an EIN, a few hundred dollars for insurance, and basic tools or equipment. Storefront and inventory businesses cost more. Advertising is separate and optional at the start.

Do I need an LLC to start a business?

No — you can operate as a sole proprietor with no filing. But an LLC adds a legal shield between the business and your personal assets, which matters once you have customers, contracts, or employees. Most owners of an ongoing business form a single-member LLC.

How long does it take to start a business?

The paperwork — forming the entity and getting an EIN — can be done in a few days to two weeks depending on your state's processing time. Getting licensed, insured, banked, and booked with paying customers is the part that takes real work.

What's the first thing I should do to start a business?

Write your idea as one sentence — who you help and what you do — then check that people near you already pay for it. Everything else (structure, registration, licenses) follows from having a clear, sellable offer.

Do I need a business plan?

You don't need a 40-page document. You need to know your pricing, your costs, how you'll reach customers, and how many you need to hit your income goal. A one-page version is enough to start; lenders and grant programs may want a longer one later.

Can FirstBearing do this for me?

FirstBearing turns these steps into a personalized roadmap for your exact business, state, and city — the right forms, the official links, what to charge, and one next step every day. Building the plan is free, no credit card; $19.99/month only if you want FirstBearing to run the rest with you. It is not a law firm and does not file for you; you file directly with the state.

Your state's exact steps

Formation fees, processing times, taxes, and ongoing reports differ by state. Pick yours for the specifics and the official filing link.

By business type

Fees and timelines are commonly-cited figures last reviewed September 2026 and can change — always confirm on the official state and IRS sites. This is educational information, not legal or tax advice. Full disclaimer.

How to start a business: the 9 steps

Get these 9 steps as a plan built for your business

1. Pick an idea you can actually sell

2. Do a quick reality check on the money

3. Choose a business structure

4. Register the business with your state

5. Get an EIN from the IRS

6. Handle licenses and permits

7. Register for state taxes

8. Open a business bank account

9. Get your first customers