The DIY Guide to Starting Your Own Business

Starting a business on your own is doable — but there are more moving parts than most people expect. You'll need to pick a business structure, register your name, get an Employer Identification Number (EIN), and sort out licenses before you open your doors. This guide walks you through each step in plain language so nothing catches you off guard.

Before you file anything, figure out whether your idea can actually support a business. That means checking whether people will pay for what you're offering, estimating your startup costs, and mapping out how you'll cover expenses until revenue comes in. A business plan doesn't have to be long — it just has to be honest.

The SBA outlines 9 core components of a business plan: an executive summary, company description, market analysis, organization and management structure, product or service line, marketing and sales approach, funding request (if needed), financial projections, and an appendix. You don't need all 9 on day one, but working through them forces you to answer the questions that matter before you spend money.

A break-even analysis is worth doing early. It tells you how much revenue you need to cover your fixed and variable costs — and when you can expect to stop losing money. Most people skip this step and then wonder why the numbers don't add up six months in.

Your business structure determines how you're taxed, how much personal liability you carry, and what paperwork you'll need to file. The 4 most common structures are sole proprietorship, partnership, LLC, and corporation. Most first-time business owners land on either a sole proprietorship or an LLC — the right choice depends on your situation.

Sole proprietorship

A sole proprietorship is the simplest structure. There's no formal registration required at the federal level beyond any local licenses your industry needs. The trade-off: your personal finances are not separate from your business finances. If the business owes money or gets sued, you're on the hook personally.

LLC

An LLC — Limited Liability Company — puts a legal wall between your personal assets and your business debts. It's more paperwork than a sole proprietorship, but the liability protection is worth it for most business owners. You register an LLC with your state's Secretary of State office and pay a state filing fee.

Corporation (C Corp or S Corp)

A C Corporation or S Corporation makes sense if you plan to raise outside investment or bring on multiple shareholders. Both offer liability protection, but they come with more compliance requirements than an LLC. If you're not sure which structure fits your goals, a tax professional can help you figure it out before you file.

Your business name needs to be available in your state before you can register it. Check your state's Secretary of State website to search existing business names. If you're operating under a name that's different from your legal name — called a DBA, or "doing business as" — you'll need to register that with your state or local government as well.

Once your name is confirmed available, you register your business structure with the appropriate state agency — for most structures, that's the Secretary of State. For an LLC, you'll file Articles of Organization. For a corporation, you'll file Articles of Incorporation. Requirements and state fees vary by state.

While you're at it, check whether your business name is available as a domain and on the social media platforms you plan to use. Locking those down early saves a headache later.

An Employer Identification Number (EIN) is your business's tax ID — the equivalent of a Social Security number for your business. Most business types need one, and you can apply for an EIN for free through the IRS website. Online applications are processed immediately. The IRS online EIN application is available Monday through Friday, 7 AM – 10 PM ET.

Your tax obligations depend on your business structure. A sole proprietor reports business income on their personal tax return using Schedule C. An LLC taxed as a partnership files Form 1065. An S Corporation files Form 1120-S. A C Corporation files Form 1120. How your business is taxed is one of the biggest practical differences between structures — and it's worth understanding before you file.

If you're not sure how your structure affects your taxes, talk to a tax professional before you finalize your formation documents. Getting the structure wrong is fixable, but it takes time and paperwork to undo.

Most businesses need at least one license or permit to operate legally — and many need several. What you need depends on your industry, your location, and your business activities. There's no single federal license that covers everything. You'll need to check at the federal, state, and local levels.

Common requirements include a general business license from your city or county, a seller's permit if you're selling taxable goods, and industry-specific licenses for things like food service, construction, or healthcare. The SBA's license and permit tool is a good starting point for figuring out what applies to your business.

Operating without the right licenses can mean fines or being forced to shut down temporarily. Check your requirements before you open — not after.

A business bank account keeps your personal and business finances separate — and that separation matters more than most people realize. If your LLC gets sued and a court finds that you've been mixing personal and business money, your personal finances are fair game. A dedicated account is one of the simplest ways to protect yourself.

Plus, a separate account makes tax time much less painful. All your business income and deductible expenses run through one place, so you're not hunting through personal transactions to find what's deductible.

To open a business bank account, you'll typically need your EIN, your formation documents (like your Articles of Organization), and a government-issued ID. Some banks also require an operating agreement for LLCs.