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Starting a business takes research, smarts and self-confidence — and a measure of fearlessness. You may already be asking yourself: How can I start my own business with no money? What's the right equipment? Am I getting the best advice?
Here are the essential steps on how to start a business, from choosing the right business idea, creating a solid business plan and structuring your company to opening a business bank account and choosing the right accounting software.
» MORE: 5 steps to turn your side gig into a full-fledged business
What business should you start? It depends on your expertise, plus how much time and money you’re able to invest. Some small-business ideas can be launched from home with little overhead, and e-commerce and remote businesses have become increasingly common in the wake of the COVID-19 pandemic.
As you narrow your scope, you also want to be sure that your idea can actually make money . If you’re not sure what kind of business you want to run, use these lists to get the wheels turning:
The 23 most profitable business ideas .
40 home business ideas to explore .
44 online business ideas you can start now .
Looking for tools to help grow your business?
Tell us where you're at in your business journey, and we'll direct you to the experience that fits.
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A strong business plan can help you prepare for every aspect of your business. Plus, you’ll need one to present to potential investors and lenders. This document should include details of the products or services you plan to offer, how you plan to make money, who you need on your team and more.
You’ll also want to include detailed financial projections, budgets and thorough explanations of how you plan to spend investor dollars or loans. Since cash flow projections will fluctuate as you adjust projected income and expenses, it helps to think of the plan’s financials as a living, changing document.
Ultimately, your business plan will help you chart a course for your business, anticipate potential roadblocks and work out how to overcome them — and will likely go through multiple iterations before your idea comes to fruition. Industry colleagues and accountants may be able to provide valuable feedback on how realistic your projections look and point out any overlooked costs.
How to write a business plan, step by step .
How to create a business budget .
Best business budgeting software tools .
5 tips to write a successful business plan .
How to write a successful business plan for a loan .
The legal structure of your business can affect everything from your taxes to what you're liable for. For example, there’s no legal distinction between a sole proprietorship and its owner. Limited liability companies (LLCs) and their owners, however, are considered separate entities by law, which can provide more personal asset protection.
Talking with a tax professional can help you choose the right business structure for you. And you can change your structure as your business grows.
How to choose the right business structure .
Pros and cons of a limited liability company .
LLC vs. sole proprietorship: How to choose .
Partnership vs. corporation: How to choose .
Getting an employer identification number (EIN) is necessary for most businesses to file taxes, open bank accounts and perform other essential tasks. Even if you don’t have employees, there are benefits to getting an EIN. It’s free to apply and the online application only takes a few minutes.
How to apply for an employer identification number .
Benefits of getting an EIN (even if you don’t have to) .
In general, restaurants need health inspections and liquor licenses. Hair stylists need cosmetology licenses. Your city may require you to apply for a business license regardless of what field you’re in. And if you’re renovating a space to sell products or perform services, you may need to ask local officials for a zoning change.
Set aside time early on to find out what licenses and permits you need before you can open your doors. While you don’t typically need a lawyer to apply for a business license, they can help you navigate the process and review other documents, like lease agreements or loans, before you sign them. Industry associations, city officials who work on economic development issues and local business associations, like your Chamber of Commerce, may be able to offer advice, too.
How to get a business license .
Do you need a business license to sell online?
How to find a startup lawyer .
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Keeping your business and personal finances separate is key to managing your business finances. It’s standard bookkeeping hygiene and makes it easier to deduct business expenses come tax time. A business bank account can help, and they’re simple to set up.
Best business bank accounts for freelancers .
Best free business checking accounts .
Best business bank accounts for LLCs .
Most businesses need a little capital to get started. However, the majority of business loans are not available to businesses that have been operating for less than six months, and most online lenders prefer at least a year in business. Startups should consider alternative financing options, or try to leverage other strengths of their business, such as strong credit or collateral. If your business does qualify for a loan, be sure to pay attention to interest rates, potential prepayment fees and personal liability terms.
Many business owners rely on their own savings to get started. You can also look into crowdfunding, personal loans, business grants and more. High-growth-potential startups may also be eligible for equity financing, which gives partial ownership, or equity, to investors in exchange for capital.
How do business loans work?
Is equity financing right for your business?
Funding your business with a personal loan .
Business credit cards can also be used as a short-term financing solution to help you purchase necessary supplies and pay bills while cash flow is still shaky. Just be sure to spend within your limit and pay off your balance in full each month so you don’t get into a cycle of debt. Startup financing aside, business credit cards also make it easier to keep business and personal finances separate. As an added bonus, you can also earn rewards, such as cash back, on the money you spend.
Usually, you can qualify for a business credit card based on your personal credit score.
What is a business credit card?
How to get a business credit card .
Best business credit cards for new businesses .
Best 0% APR business credit cards.
It’s essential that you keep records that show how much revenue you’re bringing in and how much you’re spending. Accounting software helps you track and analyze these numbers by generating reports and recording sales trends — and there are even some free options.
As your business grows, you may want to start working with a bookkeeper . This person can help ensure your records are complete and accurate, which makes it easier to file your taxes, apply for financing and more.
Best accounting software for small businesses .
Bookkeeping basics for small businesses.
Know these 4 business financial metrics to track performance .
You'll have some new tax responsibilities as a business owner — including, potentially, the need to pay taxes throughout the year, not just during tax season. But you'll probably discover some new tax breaks , too.
Filing taxes can be complex, especially as a small-business owner. Developing a relationship with a tax professional early on can help set you up for success, and they can be a trusted adviser to your business later on.
A tax guide for small-business owners.
Best tax software for small businesses .
How estimated quarterly taxes work .
How to find the right tax advisor for your business .
It's important to protect your business and your personal assets, and business insurance exists to do just that. NerdWallet recommends that every business carry general liability insurance in case of legal claims.
You may also need insurance to comply with a contract, like to set up a booth at an event or work as a subcontractor on a larger project.
How much does business insurance cost?
What is general liability insurance?
What is a business owner’s policy (BOP)?
An online presence is critical for almost every business — especially if you want to sell products online. Setting up a website and social media profiles early on, even if they’re simple, can help you start developing relationships with potential customers right away.
Here’s what you need to know to start your business website:
How to build an e-commerce website .
The ultimate guide to small-business marketing .
The best ways to promote your business on social media .
6 Instagram tips for small-business owners .
8 best e-commerce website builders for small businesses .
The do’s and don’ts of using Facebook to drive business sales .
5 best places to advertise your business online .
If your business takes credit and debit cards, you'll likely need a payment processor and point-of-sale (POS) system. Lots of POS system providers double as processing companies, which can make the decision-making process simple. Remember to consider upfront hardware costs for card readers or POS registers, monthly POS software fees and processing fees. Online payments typically have higher processing fees than in-person payments, so be sure to consider the full range of fees when choosing your provider.
How to accept credit card payments.
What is credit card processing and how does it work?
Cheapest credit card processing companies.
Best credit card processing companies .
Best credit card readers for small businesses .
You may not need to hire employees right away — and some small-business owners prefer to remain solopreneurs throughout the life of their business. But if you do choose to hire, you’ll probably need workers’ compensation insurance, payroll software and more. Here’s what goes into hiring your first employees.
Ready to hire your first employee? Prep with these steps .
Strategies to attract good employees.
Tips for hiring remote workers.
Strategies to help retain employees.
How to choose the right payroll software for your business .
Best payroll software for small businesses.
What is workers’ compensation insurance?
Once you’ve been in business for six to 12 months, you may start qualifying for business loans. Financing can help your business grow and expand — by buying equipment, renovating an office or expanding your inventory, for instance — or float you through a slow season while you prepare for increased future revenue.
Here’s what you need to know about business loans, lines of credit and other financing options.
How to get a business loan .
SBA loans: What they are and how to qualify .
Equipment financing: What it is and top lenders.
Should you grow your business? 6 questions to help you decide .
Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.
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