How to Start a Business From A-Z

Here are 11 steps that are required to start a business successfully. Starting a business involves brainstorming a business idea, planning, funding, completing legal activities, setting up a site, and marketing. Scroll down to learn about each step.

Becoming an entrepreneur is like eating glass and staring into the abyss of death.

Elon Musk

Starting a business is not easy, there is a risk of failure, and you will have to come out of your comfort zone!

However, those are the costs that you have to pay to become a successful business owner. So, don’t let the complexity of starting a business put you off.

Here are the steps to starting a business

  1. Conduct market research to validate your business idea
  2. Create a proper business plan
  3. Select the right funding option
  4. Pick the best location to start the business
  5. Choose the business name
  6. Register your business
  7. Get the tax IDs, licences, and permits
  8. Open a business bank account
  9. Setup the business website and social media channels
  10. Hire the right team
  11. Start the marketing process

Let’s go into details for each step and find out how to start a successful business.

Step 1. Conduct market research and validate your business idea

How to come up with a business idea to start a business

If you don’t have a business idea yet, here are some pointers to come up with a great business idea.

  • Look into the future – Can you think of any new technology or advancement that is going to change the people’s lives?
  • Find a solution to a customer pain point – Can you think of a business idea that is going to fix a problem for your customers?
  • Improve an existing solution – Can you think of a better, faster, and a cheaper alternative to an existing solution?

Observe what is happening around you, talk to the people, and you will find plenty of ideas to start a business. However, not all these ideas are “good” business ideas. That’s why we need to validate them with market research.

Additional reading: The best business ideas for you

Use market research to validate your business idea

Many small business owners usually skip this step, and later struggle to make any sales. Doing market research to start a business may seem unnecessary and time-consuming. However, it stops you from running into a dead end.

You can use market research to evaluate potential customer behaviours, market trends, and competition level to confirm (or improve) your business idea. Therefore, market research lets you reduce the risks of starting a business.

Here is how you can do simple market research for your business idea:

  • Pick the right target market and audience – Decide who is going to buy your product or service, and select your target market accordingly.
  • Select the demographics of your ideal customer – Decide the demographics like age, wealth, interests, gender, or anything relevant for your business.
  • Evaluate the market conditions – Collect information about the demand levels, market saturation, price levels, etc. for your business. (Below we have included a list of resources, where you can find market statistics for your business)
  • Use face-to-face interviews and surveys – Do not only rely on online information, and talk with your potential customers to collect primary information. Ask questions like “What are the things that you consider before buying this kind of product”. Remember, don’t only talk to the people you know!

Common resources to find market data

Data typeResources
Statista, Statistics, U.S. Census Bureau
Consumer Credit Data, Consumer Product Safety
Sales and market
Balance of Payments, USA Trade Online
Demographics American FactFinder, Bureau of Labor Statistics

Bonus tip! Porter’s five forces for analyzing the competition

In 1979, Michael E. Porter from Harvard Business School developed the five forces model as an easy way to analyze the market for a new business idea. This model helps to determine whether or not starting a new business can be profitable.

  1. Competitive rivalry – Higher competitive rivalry for a new business can hurt profitability. Usually, the rivalry is intense when there are just a few businesses equally selling a product or service, when the industry is growing, and when consumers can easily switch to a competitor’s offering for little cost.
  2. Bargaining power of suppliers – The bargaining power of the suppliers is high when they have greater control over the price. Which, in turn, would lower a business’s profitability.
  3. Bargaining power of customers – The bargaining power of the customers is higher when there are excessive supply and less demand. This can force businesses to reduce prices.
  4. The threat of new entrants – The easier it is for a competitor to join, the greater the risk of a business’s market share being depleted. 
  5. The threat of substitute products – This force explains how easy it is for consumers to switch from a one business’s product or service to that of a competitor.

Step 2. Create a proper business plan

Having a well-thought-out business plan is like having a strong foundation for a building. It defines how you structure, run, and grow your business.

There are two basic types of business plans

  1. Traditional business plans – If you are thinking of getting a business loan or support from an investor to start a business, you will need a traditional business plan for your business. It can be a detailed and comprehensive framework for your business.
  2. Lean business plans – Otherwise, a business plan can be simply a written roadmap to run your business. It can be just a one-page document, which defines your goals, and how you are going to achieve them.

Remember, there is no right or wrong way to create a business plan. What is important is, you should have a business plan that can fit into your requirements.

Traditional business plan format

Here are the most common sections of a traditional business plan. However, you don’t have to fill in all the sections. Create a business plan that makes sense.

  • Title page – Include the name of your business and the owner’s details on the first page. (We will discuss how to pick a business name in step 6)
  • Executive summary – Use this section to provide a high-level summary of your products, customers, and goals. Also, make sure to tell your reader, why this business will be successful.
  • Company description – Here you can go into detail and give information about your mission statement, location, employees, legal structures, etc. (We will discuss how to pick the business type and location in step 4)
  • Market research – Do you have all the market information we found in the previous step? Here you can include the details of the target customers of your business, how your new business is getting a competitive advantage, industry statistics, and applicable standards/regulations.
  • Design and development plan – Here you can include how you are planning to design and develop your products. For example, you can talk about the different models, price structures, and production facility.
  • Marketing and Sales – Here you can tell about your growth strategy, which advertising channels that you will use, and how you are going to sell your products. (We will talk about the marketing process in step 11)
  • Financial factors – The whole purpose of this section is to convenience your reader that you are going to start a stable and successful business. So, you can calculate and include your financial projections, capital expenditure budgets, and forecasts in this section. (We will talk about how to fund your business in step 3)

Lean business plan format

If your business is relatively simple, and if you don’t think of getting a business loan or anything, you can create a lean business plan just to framework your business’s roadmap.

There is plenty of startup business plan templates available online. However, here we will include an example of a lean business plan.

Business Plan
Company Name:
The vision of the businessWhat are the hopes and dreams of your business?
Business overviewHow are you going to achieve your vision?
Which products are you going to sell?
What is the target market?
How are you going to sell your products?
What is the pricing strategy?
Marketing overviewWhich marketing channels you will be using?
What are the promotional methods that you are planning to use?
Which specific marketing tools and services that you will be using?
KPIsSet specific, timely, and practical KPIs for your business. For example:
– Reply to all social media inquiries within 30minutes.
– Maintain a 30% customer retention rate for the first three months.
Action planInclude the major milestones that you are going to complete. For example:
– By “date” launch a business website with product listings.

Additional reading: The How to make a perfect business plan

Step 3. Select the right funding option

There are a ton of different ways to find money to start a business. However, every business is unique and have different funding needs. So, you have to evaluate your resources, circumstances, and business plan to decide what is the right funding option for your new business.

How much money do you need to start a business?

It doesn’t matter if you are going to start a brick and mortar store, an online store, or even a service business, you will have bills to pay even before you launch.

So, start by listing down the costs that you are likely to have. Below, we have listed some of the most common costs of starting a business.

  • Purchasing an inventory
  • Equipment and supplies
  • Office space
  • License and permits
  • Website development
  • Branding (logo design, stationery, etc.)
  • Legal fees
  • Salaries (for employees and you)
  • Advertising
  • Marketing
  • Insurance

Depending on your business, this list can be even longer. However, take your time and make a comprehensive list of costs that you will anticipate in your business.

Save money on taxes

One-time costs are the initial costs of starting a business. For example, buying a piece of equipment, branding costs, and permit costs fall into this category. Usually, you can deduct the one-time costs when you file for taxes. So, keep track of your one-time costs.

How to find funds to start a business?

  • Self-financing – Self-financing (or, bootstrapping) is the easiest way to find money to start a business. You can get money from your savings accounts, friends, family, or even from your 401(k) account. However, make sure to invest an amount that you can afford. Because, when self-financing, you have to take on all the risk yourself.
  • Getting a small business loan – If you don’t have enough fund to start a business, you can try to get a small business loan. Since we have already created an iron-fist business plan, you are ready to go. Sometimes, you will have to provide 3 to 5 years of financial projections for your business. Once you get these documents ready, start contacting financial institutions.
  • Small business grants – Yes, in some cases it is possible to get a federal grant (free-money?) to start a business. However, this depends on the niche of your business. You can visit to see if you have a matching grants program.
  • Working with angel investors – Angel investors are usually the high net-worth individuals, who would like to invest in startups – often in exchange for equity. It is like asking money from a rich non-relative. You can find angel investors through your personal contacts, from startup incubator programs, and from the platforms like MicroventuresTechCoastAngels, etc.
  • Crowdfunding – Crowdfunding platforms like Kickstarter and Indiegogo let you have crowdfunding campaigns to get money for your startup idea. However, most of the crowdfunding platforms work in all-or-nothing basis. For example, if you ask for $5000, and if you couldn’t raise $5000 within the campaign period, you will not be partially funded.

An important thing to consider before working with investors

Investors can help you to find money to start a business. However, make sure that you clearly discuss and agree on a term sheet that you are comfortable to work with. Otherwise, you will end up in a dispute, which will be bad for you and your business.

Don’t leave any room for uncertainties, and frankly discuss and solve all the unclear areas before getting investor’s money to start a business.

Step 4. Pick the best location to start the business

Setting up a location to run your business is important for the operation and growth of your business. Whether you are going to start a business in a home office, a private office, a shared office, or even a retail location, there is a list of things that you need to consider before making a decision.

The location you select to start a business depends mainly on your target market, supplier locations, and your personal preferences. Also, in some areas, you have to consider the legal restrictions for running certain types of businesses.

Finding a location to start a business

Here is a list of the things that you need to consider before selecting a place to start a business:

  • How close is it to your customers – In the first step, we found the demographics of our target audience. Now, it is time to start your business closer to where they live.
  • Region-specific business costs – Business costs can vary significantly from one place to another. For example, property values, rentals, minimum wage laws, utility costs, and taxes can cost more or less depending on your location.
  • Local ordinances – Before you select a location for your business, make sure it conforms to local ordinances. Even if you run a home-based business, sometimes local ordinances can affect your business.
  • Accessibility and parking – Depending on the type of your business, accessibility and parking facilities can make or break your business.
  • Government incentives – Some local governments offer special incentives and tax deductions for the small businesses operating in their regions. If you can find such a place to start a business, you can enjoy the deductions of your operating costs.

Step 5. Choose the business name

Selecting the perfect business name for your business is NOT going to be an easy task. The business name plays a key role in almost all aspects of your business. Also, once selected there is no turning back!

How to name a business?

  1. NO for wordplay business names – It can be tempting to have a funny wordplay name for your business. It can backfire! Even though it helps to stir the pot, people often forget the exact name to search.
  2. ABC company won’t work – Using abbreviations is one of the popular ways to name businesses. However, as a small business owner, it will be hard for you to even rank for your own site name on Google.
  3. Don’t use knockoffs – Copying, borrowing, imitating a popular brand name will end up in a lawsuit for trademark infringement.
  4. Pick a proper range of focus – Being a specialist in a small niche is the easiest way to make your first sale as a small business. Having a highly focused business name will help you to do this. However, one day your business will grow into a diverse market. So, make sure your business name can anticipate these changes.
  5. MyName company – It is a usual practice to name businesses after the founder’s name. However, one day if you are going to sell your business, it will be less attractive for the buyers.
  6. Make it internet friendly – Nowadays, having a website and social media channels are necessities of running a successful business. So, before naming your business, do quick internet research to see if you can get a good domain name to match business name.
  7. Check the availability for registration – If the name has already been registered as a local business, or as a trademark, you won’t be able to register your business name.
  8. Make it easy to spell – By selecting hard to spell and tell names for your business, you will lose a whole lot of potential traffic through the search engines.

How to register the business name?

Once you have selected a perfect business name, now it is the time to register your business name. So, you can claim the ownership of it.

Registering as an entity name

If you are going to register the business, the business name will also be registered as the entity name. In most cases, your entity name registration protects your business and prevents anyone else from using the same name for other businesses within the state.  However, this depends on the business structure and state laws.

Registering as a trademark

Registering a business name as a trademark is the best way to protect your business name, brand, and services at the national level.

Registering as a DBA (Doing Business As) name

Registering as a DBA won’t legally protect your business name against reusing. However, by registering a DBA, you can open a business bank account under that DBA, and get a separate EIN (Federal tax ID number) for your business.

Registering a domain name

Once you register (purchase) a domain name, no one else can use the exact same domain name until you renew and maintain the ownership. In some cases, you won’t be able to find the exact domain name for your business name. In such cases, you can decide to go for a related domain name for your website.

Step 6. Register your business

It is time to make your new business official by getting a business registration. How you need to register the business depends on your business structure and where you operate. Let’s find out.

Depending on where your business is located, you will have to comply with different regulations from local authorities.

Therefore, make sure to check with your local government authorities before starting a business! The information provided in this section is only an overview of the regular business registration processes in the USA.

Do you need to register a business?

In some cases, you don’t need a registration to start a business. For example, if you are doing the business as you, using your legal identity, you might not need to register your business.

However, getting a business registration helps in many different ways. For example, if you don’t register your business, you won’t get any tax benefits, legal protection, or liability protection. Also, some suppliers (if you are working with them) will ask for valid business registration to enter into agreements.

Selecting the right business structure to start a business

The business structure you choose defines almost everything about your business. It affects how you operate, pays taxes, and personal liabilities.

If you are unsure about which business structure to choose, get support from a business counsellor, attorney, or an accountant.

Also, these business structures can vary from a country to country, the below list of business structures are given for the USA based businesses.

Sole proprietorship

It is easy to start a business as a sole proprietorship and gives you the full control of your business. However, with SP, you and your personal assets can be held against the liabilities of your business. You can still register a separate business name under sole proprietorship.
SP is more suitable for small, low-risk business owners, who just want to test their business without getting formal.


Limited partnerships (LP) and Limited liability partnerships (LLP) are the simplest structure for two or more people to own a business. LPs have one partner with unlimited liabilities and others with limited liabilities. In an LLP, it gives limited liabilities for every partner.
Partnerships are more suitable for businesses with multiple owners, and especially for professional groups.

Limited liability company (LLC)

LLC is a mix between a partnership and a corporation. Therefore, you can enjoy some of the benefits of both business structures. In an LLC, you and your personal assets cannot be held against the liabilities of the business.
LLCs are good for medium and high-risk businesses. You can keep your personal assets safe while enjoying lower tax rates than a corporation.


Corporations offer the strongest liability protection to their owners. It can operate as a separate legal entity and can be taxed, make profits by its own. However, the costs of forming a corporation are higher than the other business structures. Also, corporations require extensive bookkeeping and reporting processes.
Corporations are good for high-risk businesses and businesses that are planning to go public (or to be sold).

C corp, S corp, B corp, Close corporation, and non-profit corporations

You can choose different types of corporation structures depending on the requirements of your business. These structures have different tax rates, permission for public trading of shares, etc.

For more details and document requirements, visit the Secretary of State’s office, a Business Bureau, or a Business Agency of your state.

Registering your business with local agencies

Usually, you don’t need to register a business with the local agencies. However, you will need to get business licenses and permits from them. Also, if you are running a small business, in some areas, you will need to register your DBA name with the local authorities.

Apparently, the local authorities determine all the requirements. So, it can change from a place to place. Therefore, visit your local government office and check for all these requirements.

Registering your business with federal agencies

If you want to trademark your business name, brand, or products, you can register with the USPTO (US Patent and Trademark Office). Other than that, there is no other special requirement for registering your business with the federal agencies. Visit their website for more details.

Step 7. Get the tax IDs, licences, and permits

Before you start the operations of your new business, you need to get the tax IDs and applicable licenses/permits. In this section, we will discuss the common procedures to get these done.

Getting the Employer Identification Number (EIN) for your business

Getting the EIN for your business helps you to go into the next steps of starting a business. For example, you will need the EIN to start a bank account or to pay taxes for the business.

EIN is also known as the federal tax ID number of your business. You need an EIN to open a bank account, hire employees, pay taxes, and get the permits.

It is free to apply for an EIN, and you can do it after registering the business. Visit the Internal Revenue Service (IRS) website and follow the guided process to get the EIN to start your business.

Getting the state tax ID number for your business

In some states, they issue their own tax ID for businesses for the state tax purposes. The process of getting the state tax ID vary from a state to state. So, check with your state government for the specific steps and the laws regarding the state taxes.

Apply for the business license and permits

By getting the required license and permits, you can start and run your business without any legal disturbances. The requirements, types, process of getting the permits can vary by industry, location, and many other factors.

Federal license and permits

Businesses that are regulated by federal agencies have to apply and get the federal license and permits to start a business. If you are starting a business in the USA, you can visit SBA to find a list of industries that require a federal licence and permits to operate.

State license and permits

In some states, all businesses are required to get the state license and permits. In most cases, a state tax permit is required if your business is subject to state sales tax.

Also, if you are starting a business to offer professional service, like doctors, dentists, vets, etc., you will need to get a state permit to start the business. Check with your local authorities to find out which permits and licenses you need to start a business.

Step 8. Open a business bank account

By having a separate bank account for your business, you can easily keep track of your business taxes, accounts, and other expenses. Also, for some business structures, it can be legal compliance to have one.

Why do you need to open a business bank account?

  • Convenience – If you open a merchant account, you can directly accept credit and debit card payments. Also, with a merchant account, you will be able to authorize an employee to handle the banking tasks on behalf of you.
  • Higher credit amounts – Business credit card accounts offer higher credit limits, so you can make large startup purchases, like buying new equipment to start the business.
  • Credit options – Typically, the business accounts come with many credit options, which you can use for major upgrades, emergencies, and material purchases of your business.

How to find a good business bank account?

Shop for better benefits and lower fees

You don’t have to start a business bank account at the same bank you maintain your personal accounts. Shop around and find a bank that offers better benefits when starting a business bank account.

Here are a few things to consider before selecting a bank to start checking, savings, or merchant account for your business:

  • Interest rates for savings and checking
  • Transaction fees for credit card transactions
  • Minimum balance and monthly fees (some banks charges a penalty if your bank account doesn’t have a minimum balance or doesn’t meet the minimum required transactions)
  • Discount rates for merchant accounts
  • Interest rates for credit accounts

Using the online payment gateways for your business

Online payment gateways like Paypal, Amazon Pay, or Apple Pay are getting popular than the bank merchant accounts.

It is easier to integrate the online payment gateways with your eCommerce stores. Also, many customers are comfortable paying with PayPal rather than entering their credit card details directly on your website.

Also, they offer convenient in-store payment options for your customers (for example, paying from their mobile phones, by scanning a QR code). Therefore, having an online payment gateway can be a great option for your business too.

Step 9. Setup the business website and social media channels

Today we live in an age of the internet. It is hard for any business to survive without having a business website and social media channels. However, having them can help your business to accelerate its growth. Therefore, it makes sense to start a website and social media channels for your business.

Starting a business website is not as hard as you may think

If you have basic internet skills, you can create a basic website all by yourself. However, if you need to have a website with a lot of functions, it is better to hire a freelancing web developer to make a business website for you.

Starting a simple website for business

If you just want to have a website to showcase your services, location, and contact details, you can simply do it by using CMS. It will cost around $8 per month. It has great ready-made templates for you to choose, and a step-by-step guided process to create a website.

However, if you need more flexibility in your design, you can build your website on, which is totally free. When you use, you have to pay around ($7 per month) for a third party domain name and hosting.

Starting an eCommerce store

If you are thinking of selling your products or services online, you will need to start an eCommerce store. So, you can sell your products by accepting online payments.

The easiest way to start an eCommerce store is by using a dedicated eCommerce shop building platform. Below we have listed some popular choices.

  1. WordPress + WooCommerce – The most agile online store building platform that you can use to build a fully customizable eCommerce website. It will cost you around $7 per month (for a domain name, hosting, and SSL certificate).
  2. Shopify – Shopify is a popular and user-friendly online store building platform. Shopify basic package will cost you $29 per month + transaction fees.
  3. BigCommerce – Bigcommerce is a futuristic store building platform, and it offers a versatile enterprise solution. The standard Bigcommerce plan starts from $29.95 + zero transaction fees.
  4. Wix – Wix has an amazingly beginner-friendly drag-and-drop website builder. Wix costs $20 per month + Additional charges for the SSL certificate for the basic business package.
  5. Squarespace – Squarespace is popular for the fantastic collection of store templates and analytics tools. It will cost you $18 per month to start an online store with Squarespace.

Start a Google My Business account

Google My Business let you start a business profile on Google for free. So, you can list your business on all Google services like Google search and Google maps.

By starting a Google My Business account, you can bring in customers by sharing helpful information like opening hours, reviews, and photos. Also, it offers basic analytical tools to see how people are interacting with your business. For example, you can see how people find you. So, you can use this information to build a strong marketing strategy for your business.

Start social media channels for your business

Having social media channels help you to attract and engage customers with your business.

In the beginning, create a maximum of up to three social media accounts for your business. For example, you can start Facebook, Instagram, and Twitter accounts for your business. Or, if you are selling B2B, you can also start a LinkedIn account.

Then, frequently update your social media feeds with the latest news, products, social aspects of your business. By posting such content, you can slowly start building an audience for your business.

Also, you can start accepting customer reviews on social media. Having social proof is one of the best ways to sell your products to new customers.

Step 10. Hire the right team

Before you start hiring your first employee, make sure that you adhering to the applicable federal and state labour laws!

5 traits of an excellent team member for your business

“The people you need are rare, but they are not hard to spot.”

– Richard Branson, Business Stripped Bare
  1. They can grow into their work, and respond with excitement when we give them greater responsibility.
  2. They try new things, methods, tools, voluntarily to improve their work, without following a given recipe.
  3. They enjoy working with others.
  4. They get their hands dirty when needed.
  5. They do not limit their scope of work to a specific field of expertise

It is vital to be on the lookout for talent and qualifications. However, by finding the people who have an ability to run an extra mile, taking more responsibility, where the conventional talent fails will help you better.

Next, we’ll find out the legal aspects of working with employees.

Employees and independent contractors

Depending on your business, you will need to hire employees and independent contractors for different lines of work. This determines how you pay the employer taxes and other legal obligations of your business.

However, sometimes even the independent contractors can be treated as employees on legal grounds. If so, you need to pay taxes and provide benefits to the independent contractors too. Check this guideline provided by EEOC (Equal Employment Opportunity Commission) to identify the states of your independent contractors.

Providing employee benefits

Businesses can offer (and sometimes obliged by the law) to provide certain benefits to the employees to help attract and retain them.

  • Paying social security taxes
  • Disability insurances and worker compensations
  • Leave benefits
  • Unemployment insurance
  • Health insurance
  • Employee incentive programs
  • Employee sponsored retirement plans

Step 11. Start the marketing process

Congratulations! Now you have learned almost everything about how to start a business. Now all you have to do is handle marketing for your business and start selling.

30 essential marketing skills to attract customers to your business

Marketing can be the most overwhelming task you have to do when starting a new business. It takes and time, effort, and knowledge to build a strong marketing strategy.

Therefore, we strongly recommend you to go through this list of 30 essential marketing skills that every small business owner should learn.

Starting a new business is easy, but running a successful business is the hard part

We strongly recommend you to never overlook the marketing process for your business. Lack of knowledge in marketing is one of the major reasons for new businesses to fail.

At EcommerceBuff, we research and write about the most practical and effective marketing strategies, tips, and tricks that can help you to build a strong marketing strategy parallel to the growth of your business.

Please go through the articles published under the “Digital Marketing” tag to learn more about the marketing strategies related to small business.