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Starting a Business? 10 Steps Every Entrepreneur Needs to Know

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Starting a Business? 10 Steps Every Entrepreneur Needs to Know

By Caron_Beesley, Contributor
Published: May 2, 2012 Updated: September 29, 2016

Starting a business? Confused about the planning, legal and regulatory steps you should follow?

Did you know that home-based businesses are required to hold permits to operate legally in most states? What about incorporation? Many new businesses assume they need to incorporate or become an LLC from the get-go – but the truth is, more than 70 percent of small businesses are owned by un-incorporated sole proprietors (although even this group is required to register their businesses).

So, variables aside, there are still some fundamental steps that any business needs to follow to get started. SBA has compiled 10 steps that can help you plan, prepare, and manage your business – while taking care of the startup legalities.  Not all these steps will apply to all businesses, but working through them will give you a sense of what needs your attention and what you can check off.

Step 1 – Write a Business Plan

Yeah, yeah, you know you should write a business plan whether you need to secure a business loan or not. The thing is, a business plan doesn’t have to be encyclopedic and it doesn’t have to have all the answers. A well-prepared plan – revisited often – will help you steer your business all along its growth curve. Try to think of your business plan as a living, breathing project, not a one-time document. Break it down into mini-plans – one for marketing, one for pricing, one for operations, and so on. Take a look at SBA’s Business Planning Guide for more ideas.

Step 2 – Get Help and Training

Starting a business can be a lonely endeavor, but there are lots of free in-person and online resources  that can help advise you as you get started.  Check out what‘s offered at your Small Business Development Centers; SCORE (which offers free mentoring services); Women’s Business Centers, or your local SBA office.

Step 3 – Choose Your Business Location

Where you locate your business may be the single most important decision you make. Many factors come into play such as proximity to suppliers, the competition, transportation access, demographics, and zoning regulations. Check out SBA’s Tips for Choosing a Business Location and this blog: How to Choose the Best Location for your Business.

Step 4 - Understand your Financing Options

You may choose to bootstrap, fall back on savings, or even keep a full-time job until your business is profitable, but if you are looking for an external source of financing, these resources explain your options.

Step 5 – Decide on a Business Structure

Going it alone or forming a partnership? Thinking of incorporating? What about an LLC? How you structure your business can reduce your personal liability for business losses and debts.  Some choices can give you tax benefits. To help you determine the right structure for your business, here’s an overview of your options and some information on how to file the necessary paperwork in your state and the tax implications of your decision. You might also want to read:

Step 6 – Register Your Business Name (“Doing Business As”)

Registering a “Doing Business As” name or “trade name” is only needed if you name your business something other than your personal name, the names of your partners, or the officially registered name of your LLC or corporation. Here’s how to register your “Doing Business As” name.

Step 7 – Get a Tax ID

Not every business needs a tax ID from the IRS (also known as an “Employer Identification Number” or EIN), but if you have employees, run a business partnership, a corporation or meet certain IRS criteria, you must obtain an EIN from the IRS. You’ll also need to start paying estimated taxes to the IRS; this blog explains more about this process.

Step 8 – Register with Tax Authorities

Employment taxes, sales taxes, and state income taxes are handled at the state-level. Learn more about your state’s tax requirements and how to comply.

Step 9 - Apply for Permits and Licenses

All businesses, even home-based businesses, need a license or permit to operate. This guide explains more and includes a handy “Permit Me” tool that lets you determine what your permit and licensing needs are, based on your zip code and business type.

Step 10 - Hiring Employees

If you’re hiring employees, follow these 10 steps. If you’re working with a contractor or 1099, read 5 Things to Know About Hiring Independent Contractors.

Related Resources

Check out SBA’s Starting and Managing a Business for more tips and guides.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


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Nice work! I had recently gone through this Must also view this article:
Awesome Article! How about some additional information about personal and business taxation or do we just simply hire a professional to assist us. Thanks.
Hi admin. I read your article. This is very interesting and very useful information. I am start a business on my coming days. This will helpful to start my business in future. Thank you.
Hi Caron, A great piece of advice is given by you to any rising entrepreneur. I believe for a person like me, who is in his early twenties, this information plays a huge role. I believe you should also give an emphasis on the importance of IP in start-up. For a tech entrepreneur, IP assets play an important role and they are something to be treasure. Lets take an example of patent. If I have a product and someone else has already filed a patent on that and I am not taking that thing in consideration. I launched my product and then came to know that I am infringing someone else's invention. My whole investment will go in trash can. :( VEry sad scenario for a young . IP plays an important role and you have mentioned about trademark filing. I believe one should secure his trademark as it is face of his business and a marketing tool also. -Nitin
Good tips for new entrepreneurs especially your advice on breaking the business plan down into mini-plans. In my experience I find that writing the business plan is often a daunting task for new folks. On a whole, it can seem overwhelming. Breaking it up into manageable parts makes the process doable. Kudos!
Hi Caron, As a Marketing Consultant, I strongly encourage for those who like to start a business to read this article first. Very informative, detailed and direct to the point.
It`s very useful tips.I like that these steps are in a kind of chronological order. I have met business owners that have failed or struggled by getting ahead of themselves
I've been thinking about starting my own freelance business. All this information is really helpful. I didn't realize that there was so much to do to start a business. How long does it generally take to get all of these steps finished?
Hi Caron, great work!! A motivating discussion is worth comment. You have chimed in with some tips for people who want to start their own business. This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.


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