The 10 Steps to Start a Business (SBA Framework)
The U.S. Small Business Administration publishes the definitive step-by-step framework for starting a business. The official SBA 10-step guide at https://www.sba.gov/business-guide/10-steps-start-your-business covers everything from initial market research through opening your first business bank account — and it is the authoritative process that applies in all 50 states.
The 10 steps are: (1) conduct market research, (2) write your business plan, (3) fund your business, (4) pick your business location, (5) choose a business structure, (6) choose your business name, (7) register your business, (8) get federal and state tax IDs, (9) apply for licenses and permits, and (10) open a business bank account. This guide walks through each step with the key decisions and actions at every stage.
One thing the SBA framework intentionally does not include: state-specific startup costs. Those vary enormously — licensing fees, filing costs, local permit requirements, and cost-of-living differences all affect how much it costs to open your doors. For the startup costs specific to your state, see the state guide for your location in the "Starting a Business in Your State" section below.
Steps 1–2: Research Your Market and Write Your Business Plan
Market research is the foundation of every successful business launch. Before writing a single dollar figure into a business plan, you need to know who your customers are, what they need, how much they will pay, and who your competitors are. The SBA provides a free market research guide at https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis that walks through primary research (surveys, interviews, focus groups) and secondary research (industry reports, census data, trade association publications).
A business plan is not optional — it is the document that forces you to pressure-test your assumptions before spending money. The SBA's free business plan guide at https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan covers the standard format: executive summary, company description, market analysis, organization and management, product or service line, marketing and sales strategy, funding request, financial projections, and appendix. Lenders and investors require a business plan; even if you are self-funding, the planning process surfaces financial gaps and wrong assumptions before they become expensive mistakes.
The financial projections section of your business plan is where startup costs connect to ongoing operations. Your plan should show how much capital you need, when you expect to reach break-even, and what your projected revenue looks like in years one through three. For startup cost estimates by business type and state, use the startup cost calculator on this site, then layer in your state-specific costs from your state guide.
Step 3: Fund Your Business
Personal savings are the primary funding source for most small business launches. Beyond personal savings, the SBA offers several loan programs designed specifically for small businesses. The SBA 7(a) loan program provides up to $5 million for working capital, equipment, and real estate with loan terms up to 10 years for working capital and 25 years for real estate (Source: https://www.sba.gov/funding-programs/loans/7a-loans). The SBA Microloan program provides loans up to $50,000 through nonprofit intermediaries — a strong option for service-based businesses and early-stage startups (Source: https://www.sba.gov/funding-programs/loans/microloans).
Alternative funding paths include business credit cards, which often carry 0% introductory APR periods; angel investors (typically for businesses with growth potential); and crowdfunding platforms (appropriate for product businesses with a defined customer base). SCORE mentors and Small Business Development Centers (SBDCs) provide free guidance on funding options and can connect you with local lenders — SCORE has over 10,000 volunteer mentors nationwide (Source: https://www.score.org/find-mentor). SBDCs offer free one-on-one consulting at over 1,000 locations across all 50 states (Source: https://americassbdc.org/find-your-sbdc/).
How much funding you need depends directly on your business type and state. A home-based consulting business may launch on a few thousand dollars; a restaurant or skilled-trades business typically requires substantially more in startup capital before opening day. For a reliable estimate tailored to your business type and state, use this site's startup cost calculator, then reference your state guide for state-specific licensing, filing, and compliance costs.
Steps 4–6: Choose Your Location, Structure, and Name
Your business structure is one of the most consequential decisions you will make before launch. The four primary options — sole proprietorship, partnership, LLC (limited liability company), and corporation — differ in liability protection, tax treatment, complexity, and cost. The SBA's business structure comparison guide at https://www.sba.gov/business-guide/launch-your-business/choose-business-structure explains the trade-offs. For a detailed comparison including which structure is right for different business types, see this site's guide to LLC vs. Corporation vs. Sole Proprietorship.
The LLC is the most common choice for small businesses because it separates personal assets from business liabilities while avoiding the double-taxation of a C corporation. LLC formation is handled at the state level, and filing fees vary by state. For state-by-state LLC filing costs, see this site's LLC filing fees by state guide (https://www.howmuchtostart.com/guides/llc-filing-fees-by-state). Whatever structure you choose, make the decision before you register your business — changing structures after the fact requires additional filings and potential tax consequences.
Your business name must be unique within your state and must not infringe on existing trademarks. Most states maintain a business name search tool through the Secretary of State website. If you plan to operate under a name different from your legal entity name, you will need a "doing business as" (DBA) or trade name registration, typically filed with your county or state (Source: https://www.sba.gov/business-guide/launch-your-business/choose-your-business-name). Trademark protection for your business name at the federal level is administered by the USPTO at https://www.uspto.gov/trademarks — a separate step from state registration.
Steps 7–8: Register Your Business and Get Your EIN
Registering your business is a state-level action. For an LLC or corporation, you file formation documents (Articles of Organization for an LLC, Articles of Incorporation for a corporation) with your state's Secretary of State office. Filing fees vary by state — see this site's LLC filing fees by state guide (https://www.howmuchtostart.com/guides/llc-filing-fees-by-state) for current fees across all 50 states. The SBA's registration guide at https://www.sba.gov/business-guide/launch-your-business/register-your-business walks through the full registration process, including requirements for sole proprietors (who register through a DBA filing) and partnerships.
Your Employer Identification Number (EIN) is a federal tax ID issued by the IRS — the business equivalent of a Social Security Number. It is required if you have employees, operate as a partnership or corporation, or file certain tax returns. The EIN is free and takes minutes to obtain online through the IRS website at https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number. Even sole proprietors without employees often obtain an EIN to avoid using their Social Security Number on business tax forms and vendor applications.
Some states also require a separate state tax registration or sales tax permit if you sell taxable products or services. This is handled through your state department of revenue, not the IRS. Requirements, fees, and processes vary by state — for your state's specific registration requirements and costs, see the state guide for your location in the section below.
Step 9: Apply for Licenses and Permits
Licensing requirements are among the most state- and industry-specific parts of the startup process. Almost every business needs some form of license or permit — and the type, cost, and issuing authority vary enormously by business type, industry, and location. The SBA's licenses and permits guide at https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits is the authoritative starting point, and it directs you to the relevant federal, state, and local agencies for your specific business type.
At the federal level, most businesses do not need a federal license — exceptions include businesses in regulated industries like alcohol (TTB), agriculture (USDA), firearms (ATF), transportation (DOT), and investment advising (SEC/FINRA). State-level licenses are far more common: contractor licenses, professional licenses (for medical, legal, financial, and real estate professionals), and business privilege licenses are required across many states and industries. At the local level, your city or county may require a general business license, zoning permit, sign permit, and (for food businesses) a health department permit.
For a detailed breakdown of what business licenses cost and which ones apply to your business type, see this site's guide to business license costs at https://www.howmuchtostart.com/guides/business-license-cost. For your state's specific licensing requirements and fees, see your state guide in the section below — the state guides include licensing agency links and cost ranges for the most common business types.
Step 10: Open a Business Bank Account and Get Insured
Opening a dedicated business bank account is a non-negotiable step — not because the law requires it in most cases, but because commingling personal and business funds is the most common way LLC owners inadvertently pierce the corporate veil and expose personal assets to business liability. Most banks offer business checking accounts with no or low monthly fees for new businesses. You will need your EIN, your business formation documents, and an operating agreement (for LLCs) to open the account.
Business insurance is the financial backstop that protects everything you have built. At minimum, most small businesses need general liability insurance, which covers third-party property damage and bodily injury claims. Construction businesses, food businesses, and businesses that work on client property also need professional liability (errors and omissions) coverage. If you have employees, workers' compensation insurance is required in virtually every state. For a full breakdown of business insurance types and costs by industry, see this site's small business insurance costs guide at https://www.howmuchtostart.com/guides/small-business-insurance-costs.
The SBA recommends reviewing your insurance needs with a licensed commercial insurance broker before launch (Source: https://www.sba.gov/business-guide/launch-your-business/get-business-insurance). A broker who specializes in your industry can identify coverage gaps and often access insurer pricing that is not available through direct-to-consumer channels. Insurance costs vary by state, business type, and coverage level — for estimates relevant to your state, see your state guide in the section below.
Starting a Business in Your State
The 10 SBA steps above apply everywhere in the United States — but the costs, fees, licensing requirements, and tax rules that apply at each step are determined by your state. LLC filing fees range from $35 in some states to $500 in others (Source: https://www.howmuchtostart.com/guides/llc-filing-fees-by-state). Contractor and professional licensing requirements vary from state to state. State income tax rates on business income range from zero (no income tax states like Texas, Florida, Nevada, and Wyoming) to meaningful double-digit rates in high-tax states.
Each of the 50 state guides on this site provides the startup cost ranges, licensing requirements, filing fees, and state-specific regulatory notes for your state. Select your state below to see the startup costs and requirements that apply to your specific situation. The state guides include: LLC and corporation filing fees, annual report fees, state minimum wage (relevant if you hire employees), workers' compensation requirements, and links to the official Secretary of State and licensing agency websites.
For the startup costs specific to a given business type in your state — including 8–12 cost categories with state-adjusted estimates — navigate to the business type page and select your state. The state-specific money pages combine this site's business cost data with state-level multipliers for cost of living, commercial rent, and labor costs to produce estimates specific to your location.