The Idiot’s Guide to Opening This Business

Everything a lender, an accountant and a state registry assume you already know — in the order it actually happens, with the paperwork called by its real name.

Read this first. Nothing here is legal or tax advice, and no two states are identical. Where something varies, this says so rather than guessing. The one rule that matters: do not spend money or sign a lease until steps 1–3 are done, because the structure you choose decides what you personally owe if it fails.

0. Before you spend a dollar

Write down the number that has to be true. How many sales a day, at what price, before you cover your costs. If you cannot name it, you are not ready to spend — you are ready to model it. That is what a plan is for.
Know what you are risking. Money you can lose, or money you cannot? That answer decides your legal structure in step 2, and it is the only question on this page that is genuinely irreversible.
Check the name is free before you print anything on it — your state's business registry, then USPTO for a trademark. A free name and an available name are different things.

1. Decide what the business legally IS

This is a choice about liability and tax, not about ambition. In rough order of how often they are right for a small business:

structure	what it means	usually right when
Sole proprietor	You and the business are the same legal person. Cheapest to start. Your personal assets are exposed to business debts.	Testing something small, low risk, no employees.
LLC	A separate legal person. Separates personal assets from business debts. More paperwork, an annual fee in most states.	Almost any real business that takes on customers, a lease, or staff.
S-corp / C-corp	How the business is taxed, not how it is protected. Usually a later decision made with an accountant.	Profits are steady enough that self-employment tax matters, or you are raising money.

Most first businesses are an LLC. Confirm it with an accountant for your state before you file — this page will not guess for you.

2. Register the business

Where: your Secretary of State (or equivalent — the name differs by state). Search the registry first, then file. You get a certificate back; keep it.
Registered agent: an address that can receive legal papers. Often you. It must be a physical address in the state, not a PO box.
Fictitious / DBA name: if you trade under a name that is not your registered one, most states require a separate filing.

3. Get the tax numbers

EIN — the federal tax ID. Free, direct from the IRS, and you do not need to pay anyone to get it. You need one if you have employees, file certain taxes, or want a business bank account.
State tax registration — sales tax, withholding, or neither, depending on what you sell and where.
If you sell across state lines: nexus rules decide where you collect. This is the one that catches online businesses, and it has changed repeatedly. Get it checked, not guessed.

If your business has no premises

Skip steps 4 and 9 below entirely — but this list replaces them, and it is not shorter. An online business has different obligations, not fewer.

Which state do you register in? Where you live, where you work, or where your customers are are three different answers, and they can disagree. This is the single most common mistake in an online business, and it is expensive to undo.
Tax NEXUS is the whole game. You collect sales tax where you have nexus — a physical presence, an employee, or in most states now, enough sales or enough separate transactions. The thresholds differ by state and have changed repeatedly. This is the one to get checked rather than guessed, and “I sell online so I don't pay state tax” has cost a lot of people a lot of money.
The marketplace is your landlord. If you sell through Etsy, Amazon, Shopify, the App Store or similar, their terms are the rules you actually operate under: take rate, what they can remove, how they hold your money, how they suspend you. Read the suspension section first, not the pricing page.
Digital goods are taxed differently from physical ones, state by state. Some tax them, some do not, and the definition of “digital” differs.
Payment processing and holds. Know what percentage you lose, how long payouts take, and what a chargeback costs you. A processor can hold your revenue without warning and that is a cash-flow plan, not a footnote.
Your home address may become public. It will appear in the state registry, and in WHOIS if you register a domain without privacy protection. If that matters to you, use a registered agent and domain privacy, and decide before you file.
Insurance still applies — professional liability if you give advice or deliver a service. Less of it, and rarely workers’ compensation, but it is not zero.

What does NOT apply to you, so you can stop looking: zoning, signage, foot traffic, premises licences, health inspections, a commercial lease, and a landlord’s insurance minimum. If a checklist you find online starts with those, it was written for a shop.

4. Licences and permits

This is where states differ most, and where a generic guide is dangerous. The reliable method:

Search your state licensing board for your industry.
Search your county and city separately — a local permit is often the one people miss, and a health, zoning or sign permit can hold up an opening by weeks.
If you serve food, work with children, do hair, build, drive, or touch health care: assume you need one, and assume there is an inspection.
If you operate from home: check zoning before you sign anything.
If you have no premises at all, see the online section above — this step mostly does not apply to you.

5. Banking

A business bank account, separate from personal. This is not optional bookkeeping, it is what makes the business a separate thing in practice.
You generally need your formation document and your EIN to open one.
Never mix the two accounts. Mixing them is the single fastest way to lose the liability protection you formed a company to get.

6. Insurance

General liability is the baseline most landlords and clients ask for.
If you have employees, workers’ compensation is usually required.
Professional liability (errors and omissions) if you give advice or deliver a service.
Get quotes with the coverage limits written down before you sign a lease — the lease usually states the minimum.

7. Bookkeeping, from day one

Pick the system before your first transaction, not in April. A spreadsheet is fine; consistency matters more than the tool.
Keep receipts as you go. Reconstructing a year is the most common expensive mistake.
Set aside the tax as money comes in. A separate savings account works.

8. The money — loan paths

If you need outside money, the document is the product. Every lender wants the same core package, and preparing it is the difference between a maybe and a no:

what	what it says
Business plan	What the business is, who buys, why you, and what happens if it does not work.
Financial projections	Startup costs, monthly costs, break-even, and year one month by month. A lender will test these numbers — every one should trace to a source or to your own stated assumption.
Use of funds	Where each borrowed dollar goes, line by line. Vague here reads as dangerous.
Repayment schedule	What you pay, when, and from what revenue.
Personal financial statement	Most small-business loans are personally guaranteed. Expect to provide it.

The honesty premium. Lenders have seen a decade of generated business plans that read beautifully and contain numbers nobody can trace. A plan that says “this figure is an assumption, here is what would change it” is more persuasive than one that is confident everywhere — because they can tell the difference, and the confident one is what the last fifty looked like.

9. Do the boring things BEFORE opening day

Test the actual price with one real customer. A friend paying is not a test.
Have the price, the hours, and what you do when something goes wrong written down.
Know your first week of cash, not your first year of hope.

Where we fit

Steps 1–3 and step 8 are the ones that need documents, and documents are what this site makes. The research is free, the plan is written from your own numbers, and if you want the loan package prepared with it, that is the next rung down.

Make your plan → See the full ladder →

Nothing on this page is legal, tax or financial advice. It is the sequence, with the paperwork named, so the professionals you hire are answering a specific question instead of explaining the whole thing.