Starting a business is exciting, but it can also feel like navigating a maze of paperwork and decisions. To help you take your business idea from dream to reality, here’s a checklist to guide you through some essential steps. By the end of this list, you’ll have the foundation for a solid, organized business—and maybe even a little less stress!

• Decide on your business structure

Before you do anything else, work with an accountant and attorney to determine what type of business entity best fits your needs. Will you be a sole proprietor, partnership, limited liability company (LLC), or a corporation?

Your entity type affects everything from how you pay taxes to your personal liability, so it’s worth the extra time and effort to get this right from the start.

Pro tip: Don’t just Google it! Talk to your accountant and attorney. They can help you make the best decision based on state law and your unique circumstances. This is where their expertise really shines!

• Create a business plan (yes, really!)

You might already have a rough plan in your head, but a written business plan will serve as your roadmap. It doesn’t have to be a novel—just a clear outline of your goals, target market, financial projections, and marketing strategy. This will help keep you focused as your business grows.

SCORE offers a downloadable business plan template to help you get started.

• Fund your business

How much money will you need to start your business? If you don’t have that amount in savings, you need to either raise it by bringing on a partner or take out a business loan.

• Apply for an employer identification number (EIN)

An EIN is like a Social Security number for your business. You’ll need it to open a company bank account, file taxes, and hire employees (if that’s in your future). The IRS makes it pretty easy to apply online, and it’s free!

Some states require you to get a state tax identification number as well.

• Register your business with the Secretary of State

Next up, you’ll need to register your business with your state’s Secretary of State or similar agency. Registration officially gets your business on the map and ensures no one else can use your business name in the state.

Some states allow you to register online, and some require you to file paperwork in person or by mail.

You can find a link to your state’s Secretary of state or business bureau at SBA.gov.

You may also need business licenses and permits, depending on local rules. Check with your attorney or accountant for advice on making your business legit.

• Register to collect sales taxes (if applicable)

You might need to collect sales tax if you’re selling physical products or certain services.

Each state has its own sales tax authority that establishes tax regulations for when businesses need to collect sales tax. Work with your accountant or visit your state’s department of revenue website to find out whether you need a sales tax permit.

Registering with your state’s department of revenue ensures you’re compliant and helps you avoid sales tax audits—a major headache!—later on.

• Open a business bank account

It might be tempting to simply run all of your business income and expenses through your personal bank account when you’re just starting out, but this is a huge mistake.

Separating your business finances from your personal ones makes bookkeeping easier, but it also helps protect your personal assets if you structure your business as an LLC or corporation. Plus, it makes your business look more professional.

While you’re at it, apply for a business credit card too—this helps you build business credit from day one.

• Set up a separate PayPal/Venmo account for your business

You may already have PayPal, Venmo, and other third-party payment platforms, but don’t use your personal accounts for business for the same reason you shouldn’t use your personal checking account for business.

If you collect payments from customers online, create a PayPal or other merchant account specifically for your business. Separate business accounts help you keep everything organized for bookkeeping and tax purposes.

• Select and implement accounting software

From day one, you’ll want to track income and expenses to keep your business running smoothly.

While you can use a spreadsheet to track this information, accounting software makes it much simpler. Today, most reputable bookkeeping software platforms connect to your company bank account to automatically sync transactions, saving you time on data entry.

Plus, using cloud-based software makes it easy to collaborate with your accountant or tax preparer without sending reports back and forth over email.

There are plenty of options like Xero, QuickBooks, Wave, Zoho or FreshBooks — pick one that fits your needs and budget.

• Create e-commerce/merchant accounts

To sell products or services online, you’ll need an e-commerce platform or payment processor like Shopify, Stripe, or Square. These platforms let you accept credit card payments and streamline the payment process, ensuring your customers have a seamless experience.

• Fill out a W-9 for vendors

Any vendors or contractors you work with will likely need a W-9 form from you for tax purposes. This form provides them with your EIN and other tax-related information they need to send you a 1099 at year’s end.

Pro tip: Save a copy of your completed Form W-9 on your computer or cloud storage drive so it’s handy whenever a vendor asks for it.

• Create a client/customer contract

Having a contract for your clients or customers protects both parties. It outlines the scope of work, payment terms, and any expectations or requirements. Your contract doesn’t need to be overly complicated but should cover the basics. If you’re unsure where to start, work with an attorney or use a reliable service contract template.

Contracts may feel like an extra step, but trust us—they can prevent a world of misunderstandings.

• Develop an invoicing process

Invoicing your clients is the key to getting paid, and cash flow is the lifeblood of your business. So you need a clear process for sending invoices and tracking payments.

Invoices are the lifeblood of your cash flow, so make sure you have a clear process for sending them out and tracking payments.

Decide how often you’ll invoice (weekly, bi-weekly, or monthly), and pick a system that works for you. Your accounting software should include an invoice feature and make it easy to collect customer payments via credit card, a third-party payment platform, or the automated clearing house (ACH) network.

• Get business insurance

The type of business insurance you need will depend on your business operations and whether you hire employees. However, most businesses start out with at least a general liability policy or a “Business Owner’s Policy” (BOP) that includes coverage for general liability and business property.

Don’t count on your homeowner’s insurance providing protection—even if you have a home-based business. Some policies specifically exclude home-based businesses or provide only limited coverage for business property.

Talk to your insurance agent to find out what type of coverage you need.

• Prepare for taxes

It might seem too early to think about business taxes, but it’s never too early to plan ahead. Consider quarterly tax payments if you anticipate making a profit, and keep track of all deductible expenses to maximize your tax savings. Taxes are another area where your accountant can provide crucial guidance.

Starting a successful business can feel like juggling a million tasks at once, but following this checklist will give you a strong foundation.

If you need help, please reach out. No question is too small when you’re working on making your business dreams a reality. Happy launching!