How to Start a Business in 15 Steps

Starting a business requires planning, patience and a lot of paperwork. Here's how to start a business, step by step.
Rosalie Murphy
Tina Orem
By Tina Orem and  Rosalie Murphy 
Edited by Ryan Lane

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Starting a business takes research, smarts and self-confidence — and a measure of fearlessness. You may already be asking yourself: How can I start my own business with no money? What's the right equipment? Am I getting the best advice? 

Here are the essential steps on how to start a business, from choosing the right business idea, creating a solid business plan and structuring your company to opening a business bank account and choosing the right accounting software.

ZenBusiness: Start Your Dream Business

Start today for as low as $0 plus state fees

ZenBusiness
Start now

on ZenBusiness' website

Fine-tune your business idea 

1. Find the right opportunity

What business should you start? It depends on your expertise, plus how much time and money you’re able to invest. Some small-business ideas can be launched from home. 

If you’re not sure what kind of business you want to run, use these lists to get the wheels turning:

2. Write a business plan

A strong business plan can help you prepare for every aspect of your business. This document should include details of the products or services you plan to offer, how you plan to make money, who you need on your team and more. 

You’ll need a business plan to show to potential investors and lenders. But the process of writing it will help you chart a course for your business, too. 

Do your startup paperwork

3. Choose a business structure

The legal structure of your business can affect everything from your taxes to what you're liable for. Talking with a tax professional can help you choose the right business structure for you. And you can change your structure as your business grows.

4. Get a federal tax ID

Getting an employer identification number (EIN) is necessary for most businesses to file taxes, open bank accounts and perform other essential tasks. The online application only takes a few minutes. 

5. Apply for licenses and permits

In general, restaurants need health inspections and liquor licenses. Hair stylists need cosmetology licenses. Your city may require you to apply for a business license regardless of what field you’re in. And if you’re renovating a space to sell products or perform services, you may need to ask local officials for a zoning change.

Set aside time early on to find out what licenses and permits you need before you can open your doors. Industry associations and local business associations, like your Chamber of Commerce, may be able to offer advice. If your city has officials who work on economic development issues, they may be helpful too. 

Set up your business finances

6. Open a business bank account

Keeping your business and personal finances separate is key to managing your business finances. A business bank account can help, and they’re easy to set up. 

7. Understand your startup financing options

Most businesses need a little capital to get started. In general, business loans are not available to businesses that have been operating for less than six months, and most online lenders prefer at least a year in business. Startups should look to other financing options.

Many business owners rely on their own savings to get started. You can also look into crowdfunding, personal loans, business grants and more. 

8. Get a business credit card

A business credit card can help keep your business and personal finances separate, and it can come in handy for purchasing needed supplies and paying your bills while your cash flow is still uneven. 

Usually, you can qualify for a business credit card based on your personal credit score, so these can be good tools for startup financing.

9. Choose the right accounting software

It’s essential that you keep records that show how much revenue you’re bringing in and how much you’re spending. Accounting software can make this process much easier — and there are even some free options. 

As your business grows, you may want to start working with a bookkeeper. This person can help ensure your records are complete and accurate, which makes it easier to file your taxes, apply for financing and more. 

10. Prepare to pay your taxes

You'll have some new tax responsibilities as a business owner — including, potentially, the need to pay taxes throughout the year, not just during tax season. But you'll probably discover some new tax breaks, too. 

Filing taxes can be complex, especially as a small-business owner. Developing a relationship with a tax professional early on can help set you up for success, and they can be a trusted adviser to your business later on. 

11. Protect yourself with business insurance

It's important to protect your business and your personal assets, and business insurance exists to do just that. NerdWallet recommends that every business carry general liability insurance in case of legal claims. 

You may also need insurance to comply with a contract, like to set up a booth at an event or work as a subcontractor on a larger project.

Prepare to receive customers

12. Establish your online presence

An online presence is critical for almost every business — especially if you want to sell products online. Setting up a website and social media profiles early on, even if they’re simple, can help you start developing relationships with potential customers right away. 

Here’s what you need to know to start your business website:

13. Figure out how you’ll accept credit card payments

If your business takes credit and debit cards, you'll likely need a payment processor and a merchant account. If you take payments in person, you’ll probably need a point-of-sale system too.

Look to the future

14. Learn how to hire employees

You may not need to hire employees right away — and some small-business owners prefer to remain solopreneurs throughout the life of their business. But if you do choose to hire, you’ll probably need workers’ compensation insurance, payroll software and more. Here’s what goes into hiring your first employees.

15. Get financing to grow your business

Once you’ve been in business for six to 12 months, you may start qualifying for business loans. Financing can help your business grow and expand — by buying equipment, renovating an office or expanding your inventory, for instance — or float you through a slow season while you prepare for increased future revenue.

Here’s what you need to know about business loans, lines of credit and other financing options. 

ZenBusiness: Start Your Dream Business

Start today for as low as $0 plus state fees

ZenBusiness
Start now

on ZenBusiness' website