Application Process
How do I start a small business?
Starting a small business generally means: choose and validate a business idea, write a business plan, pick a legal structure (sole proprietorship, LLC, or corporation), register the business with your state, get an EIN from the IRS, open a business bank account, and obtain any required licenses or permits before operating.
The full picture
There's no single national checklist for starting a business — requirements vary by state, industry, and structure — but the sequence is consistent. The [SBA's 10-step business guide](https://www.sba.gov/business-guide) is the federal government's canonical starting point, and most of the real work compresses into seven core steps.
The seven core steps, in order
- **Validate the idea.** Confirm there's a paying market before spending on formation — talk to prospective customers, check competitor pricing, and estimate realistic first-year revenue.
- **Write a business plan.** Lenders, and your own decision-making, run on this document. See [how to write a business plan](/answers/how-to-write-a-business-plan) for the nine-section structure.
- **Choose a legal structure.** Sole proprietorship, LLC, or corporation — each trades off liability protection, tax treatment, and setup complexity differently. See [sole proprietorship vs. LLC vs. S-corp](/answers/sole-proprietorship-vs-llc-vs-scorp) and [what is an LLC](/answers/what-is-an-llc).
- **Register the business with your state.** File formation documents (for an LLC or corporation) with your Secretary of State, or a DBA if operating a sole proprietorship under a trade name. See [how to register a business](/answers/how-to-register-a-business) and [what is a DBA](/answers/what-is-a-dba).
- **Get an EIN from the IRS.** Free, takes minutes online, and is required to open a business bank account or hire employees. See [how to get an EIN](/answers/how-to-get-an-ein).
- **Open a business bank account and get any required licenses.** Keep business and personal finances separate from day one. See [business license requirements](/answers/business-license-requirements).
- **Line up startup capital.** Bootstrapping, credit cards, friends and family, or outside financing — see [how to fund a startup](/answers/how-to-fund-a-startup).
What order actually matters
The business plan and structure decision should come before registration — you need to know what you're registering. The EIN generally comes after state formation (an LLC needs its state-approved legal name before applying for an EIN), and the business bank account needs the EIN in hand. Licensing can run in parallel with the earlier steps once you know your industry and location, since it's often the longest lead-time item.
Key facts on starting a business
- The SBA's official 10-step guide to starting a business covers market research, business planning, funding, structure, registration, licenses/permits, and opening business accounts. — U.S. Small Business Administration — Business Guide
- Business formation requirements — filing location, fee, and required documents — are set at the state level, not federally, and vary by entity type and state. — SBA — Register Your Business
Key takeaways
- The core sequence: validate the idea, write a plan, choose a structure, register with the state, get an EIN, open a business account, secure licenses and startup capital.
- Structure and plan come before registration — you need both decided before you file.
- Licensing requirements vary by industry and location and often have the longest lead time — start that research early.
- The SBA's free 10-step guide at sba.gov/business-guide is the authoritative federal starting point.
Published 2026-08-14 · Updated 2026-08-14 · https://clearvaluelending.com/answers/how-to-start-a-small-business