Checklist for Starting a Business 

A checklist for starting a business runs in a set order: validate the idea, write a plan, choose a legal structure, clear your business name, and register with your state. From there you get a free EIN from the IRS, apply for licenses, line up insurance, open a business bank account, and launch. The order matters, because several steps unlock the ones after them. 

You have an idea and the drive to act on it. What you want now is a clear order of operations, and a way to avoid the missteps that cost you later. This page gives you both, starting with the checklist itself. 

The odds are also better than the folklore suggests. The claim that most new businesses fail in year one does not hold up in federal data. The U.S. Small Business Administration’s Office of Advocacy reports that about half of new employer businesses survive five years or more. Roughly seven in ten last at least two years. 

Starting in the right order, with the right protection in place, is much of what separates the businesses that last from the ones that stall. 

The checklist for starting a business 

Use this as your working checklist. Each item is one decision or one action, listed in the order that keeps you from backtracking. The sections below explain each step in detail. 

☐ Validate the idea. Research the market and confirm real customers want what you plan to sell. 

☐ Write a simple business plan. Capture what you sell, who buys it, what it costs to run, and how you will fund it. 

☐ Choose your business structure. Decide between a sole proprietorship, an LLC, or a corporation. 

☐ Choose and clear your business name. Confirm it is available in your state and not already trademarked. 

☐ Register your business with your state. File formation documents, usually through the Secretary of State. 

☐ Get your EIN from the IRS. Apply directly. It is free and takes minutes. 

☐ Apply for licenses and permits. Check federal, state, and local rules for your industry and location. 

☐ Line up your business insurance. Find out what you are required to carry, then get quotes before you sign. 

☐ Open a business bank account. Keep business and personal money separate from day one. 

☐ Launch and market. Announce the business and reach the customers you found in step one. 

That is the full sequence. The rest of this page is the detail behind it, so you can see what each step involves and why it sits where it does. 

Why The Order On Your Checklist For Starting A Business Matters 

Most published lists give you ten items with no logic behind the order. That is where new owners lose time, because several steps depend on a filing or a decision you have to finish first. 

Your business structure comes early because it drives what follows. The U.S. Small Business Administration notes that your structure affects your registration, your taxes, and how much of your personal assets are at risk. You cannot register or apply for the right licenses until you have chosen one. 

Your federal tax ID comes after you register, and the reason is practical. The Internal Revenue Service advises forming your entity with your state first. If you apply for an Employer Identification Number before the entity exists, your application can be delayed. 

You will then need that EIN to open a business bank account, hire employees, and file your taxes. The number is free directly from the Internal Revenue Service, and the online application takes only a few minutes. Third-party services that charge a fee are selling you something you can complete yourself at no cost. 

Licenses come after structure and registration, since what you need depends on your entity, your industry, and your location. Insurance belongs in the same phase, because a lease or a client contract often requires proof of coverage before you can sign. 

Validate The Idea and Write A Plan 

The first two steps cost nothing but time, and skipping them is where many owners go wrong. 

Market research confirms that real customers want what you sell, and it shows you who already serves them. The U.S. Small Business Administration recommends using that research to identify your competitive advantage before you spend money. 

A business plan turns that research into a roadmap, and you do not need a long document to start. You need a clear picture of what you sell, who buys it, what it costs to operate, and how you will fund it. If you plan to seek a loan, a written plan is usually required, so building one early saves a scramble later. 

How To Legally Start A Business 

To legally start a business, you complete four core steps: choose a structure, register the business, get a federal tax ID, and secure your licenses. Those four are the legal spine of the checklist, and everything else supports them. 

Structure

Start with the structure, because it determines your liability and your taxes. The three common options for new small businesses differ mainly in how they treat your personal assets: 

• Sole proprietorship. The simplest to run, with no formation filing. It draws no legal line between you and the business, so your personal assets stay exposed. 

• LLC. Separates your personal assets from business debts while keeping taxes and paperwork simpler than a corporation. This is the most common choice for new small businesses. 

• Corporation. The strongest structure for raising investment, in exchange for more formalities and reporting. 

Most new owners choose an LLC for that balance of protection and simplicity, then revisit the question as the business grows. 

Registering follows once your structure is chosen. If you form an LLC or corporation, you file formation documents with your state, usually through the Secretary of State. You also name a registered agent to receive legal notices. If you will operate under a name different from your legal one, you file a doing-business-as name, or DBA. You then request your EIN from the Internal Revenue Service at no cost. 

Licensing and Permits

Licenses and permits arrive at three levels, and most businesses need some combination of them: 

• Federal licenses apply only to certain regulated industries, such as alcohol, firearms, and commercial transportation. 

• State licenses cover many professions and occupations, along with sales tax permits. 

• Local licenses come from your city or county, and often include a general business license, zoning approval, and health permits. 

Check all three levels against your specific industry and address before you assume you are clear. 

One item you can now cross off your list. Most new owners no longer file a beneficial ownership information report. A March 2025 interim final rule exempts businesses formed in the United States from that filing. The Financial Crimes Enforcement Network made the change under the Corporate Transparency Act. 

Many older checklists still list the step as required, so confirm it at the source before you spend time on it. 

How much does it cost to start a business 

Costs vary widely by business type and location, so no single number fits everyone. The honest approach is to estimate your own costs before you launch. 

The U.S. Small Business Administration recommends listing your one-time and recurring monthly costs in your business plan, then matching them to a funding source. A home-based or online business can often launch for a few hundred dollars, covering a domain, basic tools, and early marketing. A business with a storefront, inventory, or equipment usually needs considerably more. 

A few costs are predictable, even when the total is not: 

• State formation fees run from under $100 to a few hundred dollars. To form an LLC, the filing fee is $70 in California, $99 in Ohio, $125 in Florida, and $300 in Texas, paid to each state’s business filing office. Confirm the current figure on your own state’s site. 

• Your EIN is free directly from the Internal Revenue Service. 

• Business insurance is quoted on your industry, size, and risk, so real quotes beat guessing. 

Everything else depends on your model, so estimate it in your plan before you commit. 

How to start a business with little or no money 

You can start with very little money if you keep the early structure lean. Many owners begin as a sole proprietor, which carries no state formation fee. They form an LLC later, once revenue justifies it. Your EIN costs nothing, and your first customers can fund the next stage. 

Free help is available and underused. The U.S. Small Business Administration funds SCORE mentors and Small Business Development Centers, which offer no-cost or low-cost counseling for the life of your business. If you want to start a business but have no settled idea yet, start there. Pick a problem you understand well, then test whether other people share it. 

Open a business bank account and keep clean books 

Open a business bank account once your EIN is in hand, and do it before you take your first payment. 

Keeping business and personal money separate is not just tidier. If you formed an LLC or corporation, mixing funds can weaken the liability protection that structure is meant to give you. A dedicated account also makes tax time easier, and builds a financial record you will need if you apply for credit or funding. Set up simple bookkeeping at the same time, so your first transaction is recorded correctly. 

Where insurance belongs on your startup checklist 

Insurance is not the step to leave for last. Some coverages are required before you can legally operate, and others are required by the people you want to do business with. 

Workers’ compensation is required in most states once you hire employees, though the thresholds and exceptions vary. Commercial leases and client contracts often require general liability coverage and a certificate of insurance before you sign. Get quotes during your licensing phase, not after you commit to a lease, so coverage is ready when a landlord or client asks for proof. 

The right business insurance depends on what your business actually does. A few coverages come up repeatedly for new small businesses: 

• General Liability Insurance can help with third-party bodily injury and property damage claims. 

• Professional Liability Insurance can help with claims tied to your professional advice or services. 

• Business Owners Policy Insurance can bundle several common coverages into one policy for many small operations. 

Each of these can cover eligible claims within the terms of the policy. 

At Gild Insurance, we help small business owners sort out which coverages apply. We compare options across more than 40 carriers, so you match what your business needs and skip what it does not. 

Your Checklist For Starting a business, state by state 

Registration and licensing happen at the state and local level. The steps stay the same, but the agency, the fees, and the specific rules change: 

• California: register through the California Secretary of State, which publishes its own starting-a-business checklist. 

• Texas: file with the Texas Secretary of State, and handle state taxes through the Comptroller of Public Accounts. 

• Florida: form your entity through the Division of Corporations, known as Sunbiz. 

• Ohio: register through the Ohio Secretary of State’s business services division. 

Confirm the current fee and any industry licensing on your own state’s official site, since those details shift most often. 

Wherever you form your business, the sequence on this page holds: decide, file, set up, protect, and launch, in that order. 

At Gild Insurance, we work for the owner, not the carrier. Once your entity and licenses are in place, we help you compare coverage across more than 40 carriers. When you are ready for that step, we are ready to help. 

Ready to protect your business? Get a quote online or schedule a call with a Gild agent today.

Frequently asked questions 

What is the first thing to do when starting a business? 

Start with market research to confirm real demand before you spend money. Validating the idea protects you from building something customers do not want. Once you know there is a market, you move on to planning, choosing a structure, and registering, in that order. 

Do I need an LLC to start a business? 

No, an LLC is not required to start a business. You can operate as a sole proprietor without forming one. Many owners start that way, then form an LLC later for the personal-asset protection it provides. The right choice depends on your liability risk, your taxes, and your plans to grow. 

How much does it cost to start a business? 

It depends on your business type and location. A home-based or online business can launch for a few hundred dollars, while one with a storefront or inventory usually needs more. Your EIN is free, and your state lists its exact formation fee. Estimate your own costs before you launch. 

Can you start a business with no money? 

You can start with very little. A sole proprietor pays no state formation fee, and your EIN is free. The Small Business Administration also funds free counseling through SCORE and Small Business Development Centers. Keep early costs lean, and let your first customers fund the next stage. 

Do I need insurance to start a business? 

Often, the answer is yes. Most states require workers’ compensation once you hire employees, and many leases and client contracts require general liability coverage before you can sign. Even when it is not required, the right coverage can protect what you build from claims that would otherwise come out of pocket. 

Is there a printable checklist for starting a business? 

Yes, this page includes one. The checklist near the top is written to be printed or saved and used as you go. Each item is a single decision or action, listed in the order that keeps you from backtracking, from idea to open doors. 

Sources 

1. U.S. Small Business Administration, Office of Advocacy, “Frequently Asked Questions About Small Business.” https://advocacy.sba.gov/?p=1037 
2. U.S. Small Business Administration, “Launch your business” and “Choose a business structure.” https://www.sba.gov/business-guide/launch-your-business/choose-business-structure 
3. Internal Revenue Service, “Get an employer identification number.” https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number 
4. Internal Revenue Service, “Checklist for starting a business.” https://www.irs.gov/businesses/small-businesses-self-employed/checklist-for-starting-a-business 
5. Financial Crimes Enforcement Network, “Beneficial Ownership Information Reporting.” https://www.fincen.gov/boi 
6. U.S. Small Business Administration, “Get local assistance.” https://www.sba.gov/local-assistance 
7. California Secretary of State, “Starting a Business Checklist.” https://www.sos.ca.gov/business-programs/business-entities/starting-business-checklist 
8. Texas Secretary of State, business filings (Certificate of Formation, Form 205). https://www.sos.state.tx.us 
9. Florida Department of State, Division of Corporations (Sunbiz), LLC filing. https://dos.fl.gov/sunbiz 
10. Ohio Secretary of State, business services (Articles of Organization, Form 610). https://www.ohiosos.gov