How to Start a Business: The A–Z Guide for 2026

There are more than 36 million small businesses in the United States, according to the SBA Office of Advocacy. Every one of them started with the same steps you are about to take. This guide walks through them in order, from choosing an idea to serving your first customer.

It is written for US founders. Rules differ by state and city, so treat each step as a checklist to confirm locally. This guide is general information, not legal or tax advice.

Stage 1: Explore

Before you pick an idea, look at the market it lives in. Our industry profiles show market size, growth, startup costs and risks for each sector:

• Pet care: $158 billion and steady
• Home services and remodeling: over $500 billion, with repair work holding up as remodeling slows
• Restaurants and food service: $1.55 trillion, with thin real growth

Then match an idea to your budget, skills and the hours you can give it. Use the business idea finder to filter by startup budget and business model.

Ask yourself: Do I have the skills, or can I learn them before I spend money? How long can I go without income from this business?

Stage 2: Validate

Most failed businesses had a product nobody wanted at the price they needed to charge. Test demand before you invest.

• Talk to 20 potential customers. Ask how they solve the problem today and what they pay. Don’t pitch. Listen.
• Check the competition. Search your service plus your city. Read competitors’ reviews, because complaints show you what customers wish someone did better.
• Sell before you build. Take preorders, book a few paid jobs or run a weekend market stall. Real money from real customers is the only proof that counts.

Stage 3: Plan

You don’t need a 40-page document. You need clear answers to five questions:

1. Who is the customer? Be specific: "dog owners in apartment buildings within 3 miles", not "pet owners".
2. What do you sell, and at what price?
3. How will customers find you?
4. What does it cost to start and to run each month?
5. How many sales do you need to break even? Divide your monthly fixed costs by the profit you make on each sale.

If you will apply for a loan, lenders will want a written business plan. The SBA Business Guide has free templates.

Stage 4: Fund

Most small businesses start with the founder’s own savings. Other options, roughly from least to most formal:

• Personal savings and revenue. Start small and grow with what you earn. You keep full control.
• Friends and family. Put any loan or investment in writing, with clear repayment terms.
• SBA microloans. Loans of up to $50,000, made through nonprofit lenders that often also offer coaching.
• SBA 7(a) loans. Larger, longer-term loans through banks, partly guaranteed by the SBA.
• Grants. Rare for general startups, and usually tied to specific groups, places or research. Be wary of anyone charging a fee to "find" grants.

Keep enough cash to cover at least three to six months of running costs. Running out of cash, not running out of customers, ends many young businesses.

Stage 5: Register

Choose a structure. The most common options:

Structure	Personal liability protection	Paperwork	Often a good fit for
Sole proprietorship	No	Least	Testing an idea with low risk
LLC	Yes, generally	Moderate	Most small service and product businesses
Corporation (S or C)	Yes	Most	Raising investment, or tax planning with an accountant

An LLC can also choose to be taxed as an S corporation later. Ask an accountant whether that saves you money once you have steady profits.

Register with your state. For an LLC or corporation, file formation documents with your secretary of state. If you trade under a name that isn’t your legal name, you may need a "doing business as" (DBA) filing.

Get an EIN. An Employer Identification Number is your business’s federal tax ID. It is free from the IRS online, and you usually get it in minutes. Never pay a third party for an EIN unless you want their help.

Beneficial ownership reporting. In August 2026, FinCEN finalized a rule exempting US-formed companies and US owners from beneficial ownership (BOI) reporting under the Corporate Transparency Act. Rules can change, so confirm on FinCEN’s site when you form your company.

Get licenses and permits. Most businesses need a local business license. Many trades, food businesses and personal services need state or industry licenses. If you sell taxable goods, register for a sales tax permit with your state. Your city hall, county office and the SBA Business Guide list what applies where you live.

Stage 6: Set up

• Open a business bank account. Keep business and personal money separate from day one. It protects an LLC’s liability shield and makes taxes far easier.
• Set up bookkeeping. Use accounting software, save every receipt, and set aside money for taxes each month.
• Buy insurance. General liability at a minimum. Add professional liability, commercial auto, or workers’ compensation if they apply.
• Get online. Claim your free Google Business Profile, set up a simple website with your services, prices and contact details, and create a booking or ordering method.
• Write simple contracts. A clear agreement covering scope, price, payment terms and cancellations prevents most disputes.

Stage 7: Launch

Start with the people closest to you, then widen the circle. Tell friends, family, former coworkers and neighbors. Ask your first customers for honest feedback and online reviews. Reviews are the cheapest and most persuasive marketing a local business has.

Track three numbers every week: sales, cash in the bank and where each customer came from.

Stage 8: Grow

When demand is steady and you are turning work away:

• Raise prices before you hire. It is the fastest way to improve profit.
• Add recurring revenue, such as maintenance plans, memberships or subscriptions.
• Hire your first employee. You will need payroll, tax withholding and workers’ compensation insurance in most states.
• Get free help. SCORE matches you with a volunteer business mentor at no cost, and Small Business Development Centers offer free one-to-one advising in every state.

Keep going

Starting a business is a series of small, manageable steps. Pick one this week. Explore an industry, talk to five potential customers, or check your city’s license requirements. Progress beats perfection.

Sources

1. SBA Office of Advocacy, 2025 Small Business Profiles
2. US Small Business Administration, Business Guide
3. IRS, Apply for an Employer Identification Number (EIN)
4. Adams and Reese, FinCEN final rule exempting US companies from BOI reporting (August 2026)
5. SCORE, free small business mentoring
6. America's SBDC, Small Business Development Centers

Last reviewed October 17, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.