How to Start a Business: Step-by-Step Guide

1. Choose a business name

Think this one through carefully. Not only do you want to make sure it will be unique and memorable, but you’ll also want to make sure it is legally available. If your business name is similar to another business— particularly one in your geographic area— your business credit profiles could get mixed up with one another. While you are at it, check domain names, and social media accounts (Facebook, Twitter, Instagram, etc). Also, do a Google search. Before you make your final decision, consider a trademark search to avoid any legal challenges down the line. If your business name is too similar to another you may not be able to register that name when you create a legal entity. (See step 4.)

2. Choose your business address

You can register your business at your home address but who wants their home address made available to the public during the business registration process? Virtual addresses are an affordable option preferred by many small business owners, especially those who do not have customers visit their actual location. Virtual addresses are real physical addresses that can be used to register a business. Opus is a Virtual Office that gives a business a location separate from their home address. Keep in mind there will be situations—such as filing a tax return—where you will have to provide a physical address for the business.

3. Get a business phone number

You may not have to get an expensive business landline from your local telecom, but you do need a number to give out to clients and customers, and it should be answered in a professional manner. You may want to use a service like GoDaddy SmartLine to add a business phone number to your cell phone. Once your business is registered and you have an EIN (Step 6), your business may qualify for service with Verizon Wireless. You can get discounts on the newest phones, multiple phone lines, and plans that start as low as $50 per month. Tell the Verizon representative that Fast Start Business Services referred you.

4. Create your business entity

While it may be tempting to just give it a whirl as a sole proprietor, you may be taking unnecessary risk. If your business gets into any kind of legal hot water, your personal assets could be at risk. In addition, the right entity—LLC, or S or C Corporation, for example—may offer tax advantages. It’s also much easier to create a business credit profile and eventually get small business financing if you create a separate legal entity. Fast Start offers Business Incorporation Services (LLC, C-Corp, and S-Corp) starting at $300.

5. Get licenses and permits

You may need to get a sales tax license, health department inspection, or certain professional licenses (ex: Food Handling, OSHA, and Real Estate), depending on your type of business. Not sure what you will need? Talk with your local Small Business Development Center (SBDC) or SCORE chapter, both of which offer free and low-cost resources for small businesses. Your attorney or accountant can also help.

6. Request an employer identification number (EIN) for your business from the IRS

An EIN is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN, according to the IRS. You can request one for free online from the IRS. Note, it will be required if you form a legal entity (ex: LLC).

7. Open a business bank account

Co-mingling business and personal funds can create all kinds of tax headaches and can also open you up personally to liability if your business is incorporated. (This is known as “piercing the corporate veil.”) Open a separate business bank account and use it exclusively for business purposes. NorthOne Bank is great for start-ups and those who may not be able to open a traditional bank account. As a Bonus NorthOne Bank gives you One Month of Free Business Banking. (Banks almost always require an EIN to open a business bank account so do not skip Step 6).

8. Begin Building Business Credit Fast

Did you know your business can build its own credit history, separate from your personal credit? If you need help establishing business credit fast, sign up for Nav Business Boost for only $39.99 monthly (cancel at any time). Nav Business Boost helps business owners build credit and gain access to better business financing. With this plan, business owners will have their Nav monthly plan payments reported to major business bureaus — Dun & Bradstreet, Experian, and Equifax — all with no risk of negative payment history. Fast Start also has a 2-month Business Credit Builder Program for only $500.

9. Apply for a Business Credit Card or Business Line of Credit for Business Purchases

Applying for a business credit card can help protect your personal credit from the activities of your business. With Nav, a Fast Start favorite, the process is fast and simple. Nav will show you which business credit cards you’re most likely to qualify for so you can apply immediately. To get matched to the best offers based on your qualifications, sign up for free now with Nav.

10. Set up your books

When you do, you’ll need to set up your chart of accounts and begin keeping track of business expenses and income. If you don’t know how business accounting works, consider hiring a bookkeeper or accountant, or at least taking a class on basic bookkeeping at your SCORE. Starting your business bookkeeping out on the right foot will save you an enormous amount of time in the long run.

11. Get a D-U-N-S number

This number will be used to identify your business in the Dun & Bradstreet commercial credit database. You can request a D-U-N-S number for free.

12. Create a website

Create a free website on GoDaddy.com. You do not need any design experience to create a simple one-page website. You can also get a custom (.com) domain from GoDaddy.com for as little as $2.99 monthly.

13. Register your business with online services

You can register your business on Google so it comes up in online searches. This is especially important if your business has a physical address and specific business hours. Also, register social media accounts for your business— even if you don’t plan to use them yet.

14. Get Insurance

Business insurance is designed to keep you in business when losses come along. Without the right coverage, the high costs of lawsuits, property damage or employee injuries could bankrupt a new or growing company. Every business has different needs, but some of the most popular coverages include general liability, property, workers’ comp, and commercial auto – and some of these can be bundled together to save money. Visit our partner Hiscox to learn more.