How to Start A Business

Starting a new business can be daunting. Breaking it down into smaller steps can make the process feel more manageable and help you build momentum until your first sale. If you have a great idea, but you’re not sure how to get it off the ground, start with this checklist.

The process of starting a business does vary based on your industry and your resources. Things like permitting, hiring, and getting the right insurance change from venture to venture. Consider these steps as you think through the things that need to take your idea from concept to reality.

1. Perform market research

Whether you have an idea already or you’re ready to build something from scratch, the first step is to do some research. Perform a competitive analysis to make sure your product or service doesn’t already exist. Investigate how much demand there is for your product or service, as well as the existing competition. The information you learn can help you narrow down your business concept.

Market research relies on both primary and secondary sources. In practice, it entails conducting focus groups, surveys, and interviews with potential customers (primary research) and reading government statistics and market reports (secondary research). You can find information from sources like Mintel, Forrester, Gartner, Pinterest, and Google.

2. Test your concept

Before you dive in, test your business idea to make sure it’s based on a valid market need. You may want to create a minimum viable product or a prototype, or conduct beta testing to get user feedback on the product or service you plan to launch. At the very least, talk to family, friends, or potential customers to get their feedback. If you get a positive response, consider launching a Kickstarter to get objective input from a wider audience.

3. Work on your pricing model

There are a few ways to price your product or service, such as a subscription model, flat-rate pricing, or premium pricing. Figuring out how to price your product or service can take some trial and error. Start with a pricing model that balances value and revenue; again, competitor analysis and industry research can give you a good indication of your customers’ willingness to pay. Over time, you can fine-tune your price per item.

4. Build a business plan

Many entrepreneurs start writing their business plan as soon as they have their product or service idea. At the very least, a business plan is necessary when you apply for funding. It also helps guide your operations. The goal of your business plan, according to the U.S. Small Business Administration (SBA), is to:

Help find financing.
Show you’ve vetted the market.
Fully detail your execution strategy.

A business plan generally consists of a combination of market analyses, financial projections, and details about your business operations. It’s also where you outline your mission and vision statements, which are important yet underrated parts of creating a new business. These statements play a role in getting investors and potential new hires excited about your idea.

Your business plan should be iterative and revisited as your business grows to reflect your expansion and future goals.

5. Work on your sales pitch

A great sales pitch answers one simple question: Why is this solution to a problem better than every other one? Hone in on what makes your business different to create a sales pitch you can take to investors, lenders, potential suppliers, or vendors, and turn into marketing materials when the time is right.

When you’re just starting out, you will also need an elevator pitch that articulates what sets you apart and why investors and customers should care. A great elevator pitch will explain what you do or sell to whom and why in two to three sentences. Use your mission statement and vision statement to inform your elevator pitch, but note that these assets are not synonymous.

What’s the difference between a sales pitch and an elevator pitch? The sales pitch is a polished, market-ready version of your business plan that literally sells your product or service with in-depth research and detail. An elevator pitch is a high-level, concise, and compelling overview of the information in the sales pitch.

6. Find funding

There are many sources of funding for new businesses. Some business financing options include:

Many entrepreneurs also bootstrap their ventures using their personal finances or by asking their friends and family for initial capital. Use your business plan and financial projections to decide what option is right for you.

7. Decide on a business structure

Sole proprietorships, partnerships, and limited liability companies are among the most popular ways to legally structure your new venture. Keep in mind that the type of business entity you choose will have tax and liability implications.

The entity you form isn’t set in stone forever. There are many reasons why businesses convert from one entity to another later in their business cycle. No matter which business structure you choose, if it’s more complicated than a sole proprietorship, you will need a lawyer to help set it up correctly. Consult an expert from the start to avoid any tax complications.

8. Get the right licenses and permits

Some businesses, like restaurants and cafes, need specific licenses to operate. Depending on where you operate and your industry, you may need several permits and licenses. Permits and licenses are granted at the federal, state, and local levels. It can be time consuming to get your permits in order, so make sure you budget enough time for the right authorities to review your application before you open your doors.

9. Open a business bank account

Even when you start a sole proprietorship, it’s critical to keep your business and personal finances separate. Open a separate bank account for your new entity to keep your cash flow organized and trackable when it comes time to do your taxes.

A separate business bank account also allows you to start building a business credit score. Use your account to create a track record of healthy spending habits tied to your business. This score can give you access to lower interest rates, lower health insurance costs, and better vendor payment terms. It also impacts the funding options available when you decide it's time to expand, merge with or acquire another business, or valuate your business for a sale.

10. Organize your accounting

Anticipate tax time and set up your accounting system to make April much less stressful. Organize your expenses and income into three categories: business income, inventory costs, and other expenses (like payroll, rent, and other overhead). Hire an outside accountant or find an accounting tool to help you stay organized as you grow your business. There are many free accounting tools that are suitable for small business owners on a budget, although many entrepreneurs also just use a spreadsheet to keep track of their expenses and invoices.

11. Develop your supply chain

Does your business idea revolve around a new product? If so, you’ll need to find a scalable way to get it made. You may be able to make items yourself in the beginning, but as your business grows, that won’t be sustainable. It’s worth investigating your supplier options so when you’re ready to expand, the vetting is already complete.

"Getting referrals from fellow business owners via social media and forums can be a great starting point and a way to get feedback on suppliers you've been evaluating," said Liz Bertorelli, Owner of online lifestyle brand Shop Passionfruit, in Martha Stewart.

Or use a directory like ThomasNet, Maker's Row, MFG, Kompass, Alibaba, or Oberlo to find available manufacturers.

The supply chain is opaque for many new small business owners. There are a few different parties to know about, from wholesalers to drop-shippers. Check out our guide on How to Find a Factory to Manufacture Your Product to get the ins and outs of building relationships within the supply chain.

12. Protect your intellectual property

Once you have a solid plan for your product or service, file to protect the rights to your company’s name, logo, content, creative ideas, product design, or service offering. There are a few different options when it comes to protecting your intellectual property:

Trademarks protect brand identifiers like names, logos, slogans, or symbols that distinguish goods or services. Trademarks are governed by the United States Patent and Trademark Office (USPTO) and last as long as the trademark is in use and properly maintained.
Patents protect inventions, new and useful processes, machines, products, or compositions of matter. They require a formal application with the USPTO.
Copyrights protect original works of authorship, such as books, music, software, films, and art. Protection is automatic upon creation in a tangible form, but registration with the U.S. Copyright Office provides added legal benefits.
Trade secrets protect any confidential business information (like formulas, processes, or methods) that provides a competitive edge. There’s no formal registration for trade secrets, but you can use things like non-disclosure agreements to secure your information.

Advertise your grand opening on your social media channels and in local media outlets, like your town newspaper.

13. Decide where to sell

Will you look for physical real estate, or open an e-commerce site? There’s no right answer when it comes to retail: There are many companies that launch online before moving into a physical retail space. Warby Parker, Glossier, Casper, and Everlane are all companies that were founded as online-first retailers.

For restaurants, the question gets even thornier. Will you start with a food truck or pop-up, operate a ghost kitchen, start a QSR, or go for the fine dining experience?

Launching online or in a temporary space can be a good way to keep costs down, but there are some serious benefits to having a brick-and-mortar location. E-commerce sales have increased steadily over recent years but still only account for around one-fifth of all sales in the United States.

14. Develop a brand

Create a strong brand identity, including a memorable name, logo, and branding materials. Your brand identity communicates to consumers your business’s mission, values, and personality. It helps your company stand out from competitors and attract customers. You may want to work with a designer who can translate your brand identity into visual cues.

15. Design product packaging

Once you have your brand identity, it’s time to create the packaging, shipping materials, and any in-store physical assets that you will need to bring that identity to life. Even service businesses should consider using branded invoices or adding a logo to vehicles to help encourage brand recognition.

16. Negotiate a lease

Should you decide to open a storefront, you will need to find real estate property. That usually means negotiating a business lease. Make sure you know how much space you need, carefully vet the neighborhood, and read the contract thoroughly before signing.

As you consider different spaces, think about how your retail or restaurant layout can drive sales. Make sure there’s enough space for customers and staff to move freely, create the right ambiance, and still make sure foot traffic flows in and out of your location.

17. Get the right insurance policies

The insurance policies you need will depend on the size of your company (i.e., how many employees you hire), in addition to your assets and liabilities. Here are a few policies you might need:

Work with an insurance advisor who can also help you navigate state and local regulations regarding insurance. Several industries in the U.S., such as construction and general contracting, healthcare, and other professional services, are either legally required or strongly advised to carry insurance due to the risks associated with their operations.

18. Set up a website

Your website is crucial to help customers learn more about your brand. Build a business website that tells your story to build excitement before your grand opening and help people learn about your product or service. Even entrepreneurs who don’t intend to sell online need a website with their store hours, location, and phone number, at a minimum.

In addition, claim your Google My Business profile and fill out the complete information to help new customers find your company. This free tool helps you improve your local SEO efforts and share updates about your business. Go to google.com/business and click “Start now.”

19. Register your business

New businesses may need to register with their state government or the federal government, or they may not need to register at all. Generally speaking, if you want to file for trademark protection or if you need a federal tax ID, you need to register with the federal government.

20. Get the right tools

When you’re just getting started, you don’t need a lot of fancy technology to start selling. But you do need some basics, like a point-of-sale system, wireless internet, and telephone service. You may also need office equipment, like desks and chairs, or software to enable remote work.

21. Prepare for order fulfillment

Retailers and some restaurants need to consider how they will get the product to the customer. If you offer online ordering, what logistics partner will you work with to ensure the item is delivered? Do you offer curbside pickup? For retailers, this means determining what shipping partner, such as DHL, UPS, FedEx, or USPS, has the best rates and reliability. For restaurants, this could mean working with a third party like Uber Eats or GrubHub.

22. Set up your social media channels

Social media is how many customers discover new brands. These platforms allow you to share news about your upcoming grand opening, launch your products, and generate buzz. At minimum, create Facebook, Instagram, and X profiles for your business. Don’t ignore platforms like Yelp, LinkedIn, or Pinterest, either. Claim profiles on all the channels where you anticipate your target customers congregate. For instance, a B2B company should invest time setting up LinkedIn properly, while a buzzy wellness brand should consider TikTok.

23. Hire an employee

If you have the budget, it’s time to bring an employee on board. Find someone you can trust to delegate part of the day-to-day operations so you can continue to focus on the big picture. This might be a manager, a partner, or your first hourly worker who can oversee the store.

24. Advertise your grand opening

Ready to meet your first customers? Make sure they know you’re about to open for business. Advertise your grand opening on your social media channels and in local media outlets, like your town newspaper. You might run an opening day discount or promotion to improve foot traffic or work with an influencer who can quickly spread the word about your brand.

25. Prepare to launch

Before you open your proverbial or literal doors to new customers, make sure everything is ready to go. Are you prepared to accept payment? Do you have staff scheduled for opening day? Are your contact forms working as intended?

Some businesses opt for a soft launch to iron out any kinks before the official opening. A soft launch or friends and family opening is a low-pressure way to collect feedback from those who support you. Keep in mind, however, that the longer it takes to launch the more expensive this process can be.

How long does it typically take to launch a business?

There are many factors that influence how long it takes to launch a business in the United States. Most experts recommend budgeting between six months and one year from the initial idea to your first paying customer.

“Service businesses can be launched in three months, online businesses in 30 days, and retail stores, restaurants, and clothing lines commonly take one year from conception to launch,” wrote ZenBusiness.

The complexity of your business will determine how long it takes to launch. A sole proprietor providing online services will have a comparatively shorter pre-launch to-do list than a clothing retailer or new restaurant owner. Likewise, an online retailer will have a shorter time-to-market than a brick-and-mortar retailer.

There are also elements outside your control that impact your timeline. Licenses, permits, and intellectual property rights can take a long time to come through. It’s essential to have your paperwork in order before you open, even if it delays your launch.

Many experts also caution that it can take more than a year after you start your business to reach profitability. “Walmart was started in 1945 by Sam Walton, but it took seven whole years for him to open a second store. Rapid growth took 25 years, until 1970 in fact. It’s now the world’s biggest retailer,” wrote FreshBooks.

Budget two to four years of hard work, strategic planning, and trial and error before you start to see the kind of success that indicates longevity.

Mistakes to avoid during your startup journey

Startups fail for a variety of reasons, some of which are avoidable. Nearly 35% of startup failures are due to a poor product-market fit, meaning the founding team didn’t do the right or enough market research. Not understanding your target market or competition can doom a startup. Validate your idea, research customer needs, and analyze competitors before launching.

Financial mismanagement is another common mistake; more than 80% of unsuccessful startups fail to properly manage their cash flow. Be conservative in your spending when you first start out. Working with contractors, starting out online, and utilizing free software can help keep costs low and ensure you don’t burn through your cash too soon.

This is where your business plan is crucial. Diving in without a structured plan can lead to poor decisions and missed opportunities. Outline your vision, goals, and strategies from the start to make sure you’re spending on the right priorities and making calculated business decisions.

What to do in your first 90 days after launch

The first 90 days after launching your business are for building momentum, refining your operations, and attracting customers.

Spend the first month building a solid foundation for the rest of the year. Set up essential workflows and operations, such as your website, social media posting schedule, business banking and AR/AP, inventory tracking, and shift scheduling. Establish clear approval processes and lines of communication with your new team, your suppliers, and your partners.

In the next 30 days, optimize and tie up any loose ends. Create systems for tracking key metrics, collecting reviews, and improving your website. Start asking for feedback and diving into your early sales data to see if there are any red flags where you can refine your product or service.

The final month is for digging into client or customer acquisition. Begin building relationships within your community, hosting events, and ramping up your marketing. Consider hiring more people, refining your sales pitch, and creating your first omnichannel campaign.

It can take a while to see the fruits of your labor, but be persistent and open to mentorship and guidance.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Your hard work deserves to be rewarded! Apply for our premier small business awards program, the CO—100, to earn national media attention, get VIP access to premium networking events, and potentially be awarded $25,000! Apply and learn more, here.

Published May 22, 2025

Ready, Set, Startup Checklist: Steps to Starting a New Business