# How to Start a Small Business: The Practical Order of Steps

How to start a small business in the right order: idea, plan, costs, name, structure, registration, tax IDs, licenses, bank account, insurance and getting found online.

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Updated: October 6, 2026

Start with a tested idea and a simple plan, then work out startup costs, pick a name, choose a structure, register with your state, get tax IDs (an EIN is free from the IRS), research licenses and permits, open a business bank account, talk to an insurance agent, and get found online before opening day. The SBA lists the same core steps; your state and city decide the details.

## The order that saves time and money

- Test the idea. Talk to 10 to 20 likely customers and check who already sells the same thing nearby.
- Write a one-page plan. Who you serve, what you sell, how you reach customers and what it costs.
- Count startup and monthly costs. Separate one-time costs from bills that repeat every month.
- Pick a name and check it. Search your state business registry, trademarks and domain availability before you print anything.
- Choose a structure. Sole proprietorship, LLC or corporation changes paperwork, taxes and personal liability.
- Register. Most structures register with the Secretary of State; a DBA may be needed for a trade name.
- Get tax IDs. Apply for a free EIN with the IRS and check state tax registrations such as sales tax.
- Research licenses and permits. State, county and city requirements can all apply.
- Open a business bank account. Keep business money separate from day one.
- Insurance and opening prep. Ask an agent what coverage fits, then set up your website, Google listing and payment tools.

## What depends on what

| Step | Needs first | Why |
| Register the business | Name and structure | The filing uses both |
| EIN | Registration (for LLCs and corporations) | The IRS asks for the legal name and entity type |
| Bank account | Registration and EIN | Banks usually ask for formation documents and the EIN |
| Licenses | Location and activity | Rules depend on what you do and where |
| Website and Google listing | Name, phone, address or service area | Your details should match everywhere |

## Where to get free help

- SBA business guide for the national overview.
- Small Business Development Centers (SBDCs) for free one-on-one advising in most states.
- Your Secretary of State website for registration.
- Your city or county business tax and licensing office for local permits.

## Worked example

A cleaner named Jo follows the order: talks to customers, writes a short plan, lists costs, picks a name, registers, gets an EIN, checks licenses, opens a bank account, buys insurance and launches a website and Google profile. Each step unlocks the next.

## Common questions

### How long does it take to start a small business?

Registration can be done in days in many states, but licenses, permits, inspections and a location can take weeks or months. Build an opening timeline that counts back from your target date.

### Do I need an LLC to start?

No. Many owners start as sole proprietors. An LLC adds a filing and fees but can separate business liability. Compare options on the SBA structure page or with a professional.

### What should I do first?

Test the idea and estimate costs before you spend on a name, logo or lease.

## Sources

- SBA: 10 steps to start your business: https://www.sba.gov/business-guide/10-steps-start-your-business
- SBA: Choose a business structure: https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
- SBA: Register your business: https://www.sba.gov/business-guide/launch-your-business/register-your-business
- IRS: Get an employer identification number: https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number
- America's SBDC: find a Small Business Development Center: https://americassbdc.org/

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