1. How to research your new business idea
Before you launch your business, you’ll want to determine if it is viable: does it have the potential to become successful? After all, you wouldn’t want to pour your heart and efforts into a business idea with very little chance of profit.
How do you know if your business idea is viable?
Before you launch, take time to confirm your idea has real potential. Early market validation helps you understand whether customers want what you plan to offer — and whether your business could be profitable. Start by identifying the problem you’re solving, who needs that solution and if they’re willing to pay for it.
What does your local market look like?
Every business operates within a specific community, so look closely at local market demand and any startup requirements. Get information about:
- Who your potential customers are and what problems you’re going to solve for them
- The preferences of these potential customers. How will they find you, and how do they like to communicate? What do they like and dislike?
- Who are your competitors, and what are their strengths and weaknesses
- What is it like to start a business in your area? What are the steps and regulations?
For example, if you’re opening a landscaping business, you might research how many homes in your area hire yard services and what competing companies charge.
Check whether similar products or services already exist, what competing businesses do well and where gaps might be. Tools like the U.S. Census Business Builder and County Business Patterns can help you understand local demand and customer demographics in your area.
TIP: A small business class — through the SBA or a local community college — can help first-time entrepreneurs navigate this early research stage.
This early research sets the foundation for the rest of your business startup checklist and helps you move forward with clarity.
2. How to estimate startup costs for a startup business
Once you confirm your idea is viable, the next step is understanding what it will cost to get your business off the ground.
How much does it cost to start a small business?
Your startup budget should include key initial business expenses. These might include:
- Equipment
- Business location or office space
- Permits, licenses and fees
- Business insurance
- Advertising and promotions
- Consultants such as accountants and lawyers
In 2026, cost estimates vary widely: some online or home-based businesses may launch for very little, while a physical location or service business may require tens of thousands of dollars or more in startup costs.
TIP: The SBA provides a handy worksheet to help calculate your costs.
How to fund your business
Consider your business funding options, including personal savings, SBA loans, bank loans, microloans or private lenders. Factor in your credit needs, repayment terms and any cash reserves you may want for unexpected expenses.
Lean more: Funding your small business: Your guide to loans, funding, grants and credit
Understanding your early expenses is an essential part of any small business startup checklist, helping you plan realistically before you open your doors.
3. How to choose the right business insurance for your startup
Good small business insurance for startups can help protect you from the unexpected — whether you work solo or have employees. Because every business faces different risks, the right startup insurance policies can help cover costs related to accidents, property damage or lawsuits and support your broader risk management plan.
General Liability insurance
General liability coverage is the most common type of insurance for small businesses and startups. This coverage could help protect you from the costs of many workplace accidents, including damage you cause to other people’s property, physical injury to non-employees and some medical or legal expenses.
Professional Liability insurance
Also known as errors and omissions insurance, or E&O for some professions, professional liability insurance could be a good idea for people who sell their advice, such as consultants, IT or tech workers, accountants or financial advisors, real estate professionals and more. It could help protect you from the costs of accusations of professional mistakes, negligence and misrepresentation that cost a client money. If you accidentally miscalculate in accounting or miss a deadline, this coverage could help protect you.
Workers’ Compensation insurance
While general liability insurance can help cover people outside of your company who get hurt at your place of business, workers’ comp insurance could help cover costs if your employees suffer a work-related illness or injury. This insurance, mandatory for employees in most states, can assist with their medical expenses and lost salary. And it could help protect you, the employer, from some lawsuit costs for negligence.
Commercial Property insurance
Commercial property coverage can help protect the physical assets you need for business operations – including products, inventory, office or store furniture, laptops and other equipment and the building itself – from mishaps such as fire, a broken water pipe, vandalism or theft. This coverage can also help protect you against lost business income and some related expenses if you must temporarily close your business for repairs.
A clear plan for protection can help keep your startup checklist on track and help you stay focused.
4. How to create a business plan
A business plan helps clarify your goals, map out your business model and guide early decision-making as you launch.
What should a business plan include?
Your plan doesn’t need to be long, but it should outline the essentials:
- Executive summary
- Company description
- Products and services
- Market analysis
- Financial projections
- Hiring employees
- Marketing plan
For instance, a mobile car detailing business might outline its service packages, targeted neighborhoods, an equipment list and forecasted weekly bookings in a brief plan.
Since a business plan explains how you will reach your goals, you can share it with potential investors to help secure your business financing. It can also help you attract partners who can help grow your business.
TIP: Seek out existing resources. Creating a business plan may sound intimidating, but there are plenty of resources to guide you. The SBA offers templates and guidance that can get you started.
5. Taxes, choosing a business structure, licenses and permits
Before you operate, you’ll need to handle a few small business compliance steps to make sure your company is set up correctly.
What business structure should you choose?
Your business registration determines how you pay taxes and how much personal liability protection you have. Common business structures include sole proprietorships, partnerships, limited liability companies (LLCs) and corporations. Each has different requirements and tax obligations.
What licenses and permits do you need to start a business?
Most businesses need a business license. Depending on your industry, you may also need specific permits or occupational licenses. You may also need zoning approvals or state-level certifications depending on where you operate and what you offer.
Check with your local SBA branch office on what specific licenses or permits you need to acquire.
What tax steps do new businesses need to take?
Many new businesses need to:
- Get an EIN for federal tax identification.
- Register for state and local taxes, including sales tax where required.
- File estimated quarterly taxes to avoid penalties.
- Set up payroll tax withholding if you plan to hire employees.
TIP: Consult with an expert. A lawyer or accountant can be crucial in helping you form and maintain your business. A lawyer can discuss the type of corporation best for you and how to protect and set up your business. CPAs can assist on tax matters and navigate confusing IRS regulations. They can walk you through state and local tax laws and help with financial planning.
Basic business registrations:
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Requirement
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Who needs it
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EIN (Employer Identification Number)
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Partnerships, LLCs, corporations; some sole proprietors depending on banking needs
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State or local business license
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Most businesses operating within a city, county or state
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Sales tax permit
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Retailers, service providers and any business required to collect sales tax
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Zoning or home occupation permit
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Businesses operating from home or within a regulated commercial zone
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Industry-specific licenses
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Trades (e.g., contractors), food service, childcare, transportation and other regulated fields
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6. How to estimate costs and finances for a new small business
A solid financial plan helps you manage cash flow, stay organized and make informed decisions as your business grows.
The banking and financial accounts you’ll need
- Business checking account. Your primary account for deposits, bill payments and daily transactions.
- Business savings account. Helpful for taxes, emergency funds or future investments.
- Merchant services account. Allows you to accept credit and debit card payments.
- Payment processor account. Tools like Stripe, Square or PayPal to manage digital payments.
- Business credit card. Helps separate expenses and begin building business credit.
Start building business credit
You should start establishing business credit. Just like a personal credit score you’ve built over time, you’ll have to build a business credit score if you’re a first-time entrepreneur.
Your business credit score determines future loan interest rates, repayment terms and how much money you’ll receive.
While each lender has different qualifications, typically, you’ll need to provide your past revenue, expenses, bills and payroll when you apply for a loan or business credit card.
TIP: Ask for a net 30-day account. First-time business owners can build their credit score through their vendors and suppliers by asking for net terms such as 30 days.
How will you track expenses and cash flow?
You’ll need to know how your money is moving to do business effectively. Accounting software can help you with your bookkeeping needs, including collecting payments, paying bills, managing payroll, tracking expenses and more. Startups typically use:
- Quickbooks
- Freshbooks
- Xero
- Wave
A solid accounting system makes filing business taxes much easier; it’s better to plan than set things up ad hoc.
7. How to develop a marketing and advertising plan
Creating a strategic marketing plan before you launch could have customers knocking on your door as soon as you open rather than chasing them.
How do you market a new small business?
Start with the fundamentals: clarify what you offer, who you serve and why customers should choose you. A simple brand message and consistent digital marketing habits can help new customers find and trust your business, even before you launch.
New businesses will want to:
- Define your value proposition. A simple statement explaining what you do and who you help.
- Choose a visual style. This includes colors, logo and basic branding.
- Select marketing channels. For example, a fitness trainer might focus on Instagram and local partnerships, while a bookkeeping service may get better results from LinkedIn and referrals.
- Prepare launch-day content. This could be a social post, email or announcement.
Even if your work happens offline, most customers will search for you online first.
Build your online presence
- Set up a simple website. Creating a business website can be simple. If you register your business name as a domain name, you can help your target audience find your business and get in contact. Platforms like GoDaddy, WordPress or Shopify make it easy by providing tools and templates to get your business up and running.
- Create a Google Business Profile. Make sure customers can find your business and it’s searchable.
- Claim and complete key directories. This includes Yelp, Annie’s List or Thumbtack to engage with customers and attract new ones.
- Pick one or two social platforms. Determine which social platforms best connect you to your customers. For instance, if you offer financial services or are in real estate, LinkedIn is where you can grow your network. On the other hand, if you work in food services, maybe Instagram or Facebook is where your audience is.
- Email marketing. Create a company email to send newsletters and allow customers to engage with you directly.
TIP: Consistency matters. Marketing works best when you show up regularly, even during busy or slow seasons. Pick a cadence you can maintain — like a weekly post — and stick with it.
8. Celebrate and evaluate your first year of business
Starting your own business is incredibly rewarding. After all of your hard work, it’s time to take a step back to celebrate your accomplishments.
How do you measure your first year of success?
Your first year is about learning what works and where to adjust. Reviewing your business performance metrics can help you understand your momentum and set smarter goals for year two. Look at:
- Revenue and profit trends. Are sales growing month over month?
- Customer growth and retention. How many new customers came back?
- Online reviews and feedback. What do people appreciate or want improved?
- Margins and cash flow. Is your pricing correct? Are you managing expenses well?
These insights can help you refine your operations and identify the next set of opportunities for your business.
Ways to celebrate your milestone
Many business owners choose to do the following to commemorate their special anniversary:
- Create an event such as a giveaway or contest
- Reward loyal customers with a gift or discount
- Volunteer within the community
- Thank your partners and customers
- Treat your staff to something special
- Sponsor an event
- Launch a new product or service.
TIP: Look to the future. Evaluate areas where you can improve and the next steps for growth. You know so much more now than when you started, so set some new goals for what you want to achieve.
