How to start a small business: the 10 steps, in order
Bizer · 2026-10-01
The list is easy. Almost every guide to starting a business names the same jobs: an idea, a plan, a name, a structure, a registration, a tax ID, licenses, a bank account, insurance, a first sale. Where guides go wrong is the order. Most put registration near the top, so people pay a state filing fee and take on a yearly obligation for a business nobody has agreed to buy from yet.
1. Can you name the person who will pay?
Before anything official, find out whether the idea has buyers. Not friends who say it sounds great. Strangers, or near strangers, who describe the problem you solve without being prompted and tell you what they do about it today.
Five to ten of those conversations is enough to decide whether to keep going. Ask about what they did last month, not what they would do in theory. People are generous about the future and accurate about the past.
2. Can you get one sale, or a deposit, before you spend?
A preorder, a paid pilot, a deposit on the first job. One is worth more than a survey of a hundred, because money is the only answer that cannot be polite.
3. Write a short plan
A page or two: who the customer is, what you charge, what it costs you to deliver, and how many sales a month cover your costs. A forty page plan can wait until a lender asks for one. What you need now is the break-even number, because it tells you whether the business can pay you at a volume you can actually reach. There is more on whether you need a formal plan at all.
4. Pick a name you can actually use
Check three places before you fall for one: your state's business registry, the free trademark search at the USPTO, and whether the web domain and social handles are taken. A name someone else has registered as a trademark in your industry is a rebrand waiting to happen.
5. Choose a structure
Most one-person businesses start as a sole proprietorship or a single-member LLC. The LLC costs a filing fee and an annual report, and in return it separates the business's debts from your own, provided you keep the money separate too. Electing S corporation tax treatment is a tax decision, usually worth a look only once profit is steady.
6. Register with the state
This is the step most guides put second, and it is the first one that costs money every year. In Louisiana, the Secretary of State's fee for an LLC's articles of organization is $125 from 1 October 2026, and every registered company files an annual report, which costs $35 from the same date. Other states charge different amounts, and some charge far more for the annual piece than for the filing. Look at your own Secretary of State's fee page on the day you file.
7. Get your federal tax ID
An employer identification number comes from the IRS. You apply online, it is free, and it usually takes one sitting. You need one to hire, to open most business bank accounts, and to file as anything other than a sole proprietor with no employees. Ignore the sites that charge to "process" an EIN. They fill in the same free IRS form for you.
8. Licenses, permits and local tax accounts
This is where location decides everything: a city business license, a county or parish occupational license, a state sales tax account, a health permit for food, a contractor's license for the trades. None of these come with the state registration. Louisiana adds a wrinkle owners from other states do not expect: local sales tax is registered and filed with a parish collector, separately from the state. The Louisiana start-up sequence lists each office in order.
9. Separate the money, then insure the real risk
A business bank account is what makes an LLC's protection hold up. Insurance comes next. General liability covers most businesses that meet the public. Professional liability matters if customers act on your advice. Commercial auto matters if a vehicle is part of the work. Ask an independent agent to price the risks of your specific work rather than sell you a bundle.
10. Set up a way to get paid, then sell
Invoicing, a card reader, a payment link. Then go back to the people from step one, who are now your first customers.
What this order costs you
It is slower. You may spend a month talking to people while someone with the same idea files paperwork and prints business cards.
It also means your first few sales may happen before the business formally exists, as a sole proprietor under your own name. That is legal in most places, but for those weeks you carry any liability personally. For low-risk work like consulting, design or tutoring, that is a fair trade. For anything where a customer can get hurt, such as food, childcare or construction, do steps 5 to 9 before the first paid job. Not after.
What is uncertain
Steps 6 and 8 vary by state and by city more than any national guide can cover, and fees change: Louisiana's rose on the day this was published. Treat every figure in a guide, this one included, as a pointer to the official page rather than a substitute for it. The SBA's launch your business guide and your own Secretary of State are the two places to confirm what applies to you.
