Business

You have an idea, a rough budget and maybe a potential customer — now you need a clean path from zero to a legally operating business that can accept payments. This guide walks you through the key choices and filings in the United States, what each one costs or commits you to, and when to do them. You’ll compare structures, register the essentials and run a simple 90‑day launch plan you can actually follow.

What should you decide before you file anything?

• Define your first paid offer and a price you can defend. That will shape licenses, insurance and taxes.
• Choose where you’ll operate first (state and, if relevant, city), because registrations and permits are state and local. The Small Business Administration (SBA) frames these place‑based steps in its launch overview. SBA: Launch your business. (sba.gov)
• Clarify the skills you need to run the company. If you’re considering formal study, compare business majors and the jobs they lead to or evaluate online business degrees alongside your timeline.

If you still need to shape the model and numbers, draft a lean plan using our business plan template before you commit filing fees.

Which business structure fits your risk, taxes and growth plan?

Your business structure determines liability, tax treatment and paperwork. SBA and IRS outline the common options.

• Sole proprietorship: simple to start, but you personally bear unlimited liability; income is reported on your Form 1040 with Schedule C and you may owe self‑employment tax. SBA on structures; IRS business structures. (legacy.sba.gov)
• Limited liability company (LLC): liability protection for owners (“members”); default tax is pass‑through (single‑member treated as sole proprietorship; multi‑member as partnership) unless you elect corporate taxation. SBA; IRS FAQs on entities.
• Corporation (C corp): owners aren’t personally liable; the corporation pays corporate income tax, and dividends to shareholders can be taxed again. Some corporations elect S corporation status for pass‑through federal taxation if they meet the IRS rules. SBA; IRS.

A quick way to choose: match your real risk and funding needs. If you sell low‑risk services to a few clients and want minimal cost, a sole proprietorship may be enough. If you’ll hire, sign leases, or handle customer data, many founders pick an LLC for liability protection and flexibility. If you’ll raise venture capital or plan to go public, a corporation is usually expected by investors. (See the SBA comparison for trade‑offs by liability, taxes and ownership rules.) SBA comparison.

Snapshot: how structures differ

Structure	Owner liability (general)	Federal tax default
Sole proprietorship	Unlimited personal liability	Report on Form 1040 Schedule C; self‑employment tax may apply
LLC	Members generally not personally liable	Pass‑through by default (single‑member as disregarded entity; multi‑member as partnership)
Corporation (C)	Shareholders not personally liable	Corporate income tax (S corp is a separate election with pass‑through rules)

Sources: SBA; IRS.

What registrations and protections are worth doing, and in what order?

1. Form your entity with your state (if LLC or corporation). Your state filing creates the company and is often required before banking or payroll. SBA’s launch guide explains when you must register with a state versus operating as a sole proprietor. SBA: When to register.

2. Get your federal Employer Identification Number (EIN). You can obtain an EIN directly from the IRS online for free; most businesses need one to hire employees, open a business bank account or file certain taxes. IRS: Employer Identification Number. (irs.gov)

3. Register for state and local taxes and permits. Depending on your state and city, you may need a sales tax permit, employer (withholding) accounts, or professional/industry licenses. SBA summarizes the typical licenses and permits by level of government. SBA on licenses and permits.

4. Consider trademark protection for your brand name or logo. Federal registration with the U.S. Patent and Trademark Office provides nationwide benefits; the application fee is currently $250 per class (TEAS Plus) or $350 per class (TEAS Standard). USPTO: trademark filing fees. (uspto.gov)

Tip: You can operate under a different public‑facing name by filing a “doing business as” (DBA) where required; SBA’s structure pages explain DBAs and when states or counties require one. SBA on trade names/DBAs.

Banking, contracts, payroll and insurance: what to set up in week one

• Open a dedicated business checking account and payment processor after your EIN is issued; many banks require entity paperwork plus EIN confirmation. The IRS notes you can get an EIN in minutes online at no cost. IRS EIN guidance.
• Draft client or vendor contracts that define scope, payment terms and IP ownership. For larger contracts or regulated industries, get legal review.
• Set up payroll if you’ll pay employees, including federal and state withholding accounts. IRS resources explain that your structure determines which returns you file and taxes you pay. IRS on structures and taxes. (irs.gov)
• Price and bind business insurance (general liability; professional liability for services; workers’ comp if you have employees). SBA’s launch guide outlines insurance types small businesses commonly consider. SBA: insurance overview.

If you plan to deepen your management skills while operating, explore whether an online MBA format and accreditation fits your career arc, and how to judge the real price with our guide to affordable online MBA programs.

A simple 90‑day launch plan you can actually follow

• Days 1–7: Choose structure; check name availability; file entity (if LLC/corp); get EIN; open bank account; pick accounting software.
• Days 8–21: Register for state/local taxes; secure required licenses/permits; create first offer, price and contract; set up invoicing and payment.
• Days 22–45: Pilot with 3–5 customers; deliver, collect payments, and refine scope based on feedback and measured margins.
• Days 46–90: Standardize operations (SOPs), review insurance, and, if hiring, stand up payroll and basic HR files. Revisit pricing after actual cost data.

Throughout, keep your paperwork organized. The IRS reminds new businesses to match their tax obligations and forms to their chosen structure, and to keep records that support income, deductions and credits. IRS: structure drives tax filings.

How to know your setup is complete (and what to monitor)

• Legal and tax: You’ve formed the entity (if applicable), obtained an EIN, registered for required state/local taxes, and hold any industry licenses your state or city requires. See the SBA’s checklist‑style launch guidance for confirmation. SBA launch checklist.
• Money: Your bank account is active, you’ve issued at least one invoice and received payment. You track every expense from day one.
• Operations: You can deliver your core offer repeatedly using a written process. Insurance and basic contracts are in place.
• Metrics: For the first 90 days, monitor cash runway, gross margin per job/order, on‑time delivery rate and first‑invoice collection time.

If any box is unchecked, go back to the relevant step above. When you’re ready to grow your skills alongside the business, revisit whether structured learning like an online business degree or targeted courses makes sense for your goals and budget.