How To Start A Business

Learn the step-by-step process to start a business, plus what to expect based on the type of business you want to launch.

WRITTEN & RESEARCHED BY
Erica Seppala
Editor & Senior Staff Writer

Apr 30, 2026

UPDATED

Our content reflects the editorial opinions of our experts. While our site makes money through , we only partner with companies that meet our standards for quality, as outlined in our independent .

Key Takeaways

Starting a business isn’t always complicated, but it does require the right setup from the start.
Costs and complexity vary widely depending on how your business operates.
Focus on the essentials first, then refine your systems as you grow.

Starting a business seems simple in theory… until you actually sit down to do it. Whether you’re launching a coffee shop, starting a lawn care business, or opening an online shop, there’s a lot to figure out.

The good news is that most businesses follow the same core steps — but the details matter. A food truck has very different startup needs than a photography business, and a laundromat requires a completely different investment than a side hustle you can start from home.

In this guide, we’ll break down everything you need to know about starting your own business.

Table of Contents

How To Start A Business In 10 Steps
Which Type Of Business Should You Start?
How Much Does It Cost To Start A Business?
Common Mistakes To Avoid When Starting A Business
Next Steps To Launching Your Business

How To Start A Business In 10 Steps

Every business is different, but most follow the same basic path from idea to launch. Here are the 10 steps that apply to nearly any business.

Step 1: Brainstorm Business Ideas

Start brainstorming what kind of business you want to start. This could be things you’re good at, or a new idea that solves a real problem or fills a clear need. It doesn’t have to be perfect, but you should be able to explain what you do and who it’s for in one sentence.

Don’t be afraid to think outside of the box or consider multiple types of businesses. Ideas could range from a service like lawn care or consulting to a product-based business like candles or subscription boxes.

Step 2: Do Your Research

Before you invest time or money, make sure there’s a demand for your business. Research potential competitors, keep an eye on current trends, and talk to potential customers if you can.

Step 3: Create A Business Plan

At this stage, a one-page business plan is sufficient. At a minimum, include:

What you’re selling
Who your target customer is
How you’ll make money
Your estimated costs

This is especially important for businesses like restaurants, laundromats, or house flipping, where margins and expenses matter more upfront.

Step 4: Choose Your Legal Structure

Next, decide what business structure works best for you. Common options include:

Sole proprietorship: Easiest to set up, but no legal protections
LLC: Offers legal protections but restricts raising capital
Corporation: More complex and usually reserved for larger operations

Your choice affects taxes, liability, and how you run your business, so make sure to do your research.

Step 5: Register Your Business

Once you’ve chosen your business structure, you’ll need to name your business and register your business name and entity with your state.

This may include:

Filing formation documents
Registering a DBA (doing business as) name
Getting a federal Employer Identification Number (EIN)

Step 6: Get Licenses & Permits

To legally operate your business, you may need to obtain licenses and permits. Requirements vary depending on your business type and location. For example:

A food truck or catering business needs health permits and inspections
An auto body shop may require special certifications
Even some home-based businesses need local permits

Skipping this step can delay your launch — or shut your business down entirely.

You’ll also want to think about business insurance at this stage. Most businesses benefit from general liability insurance, which protects you if a customer is injured or property is damaged. Some business types may be legally required to carry it.

Other common policies include professional liability insurance (for consultants or service providers) and commercial auto insurance if you’re using a vehicle for work.

Step 7: Set Up Your Business Finances

One of the most important rules of starting a business is to keep your personal and business expenses separate from the start. This makes accounting easier, protects your liability status, and just looks more professional.

The easiest way to do this is by opening a business bank account.

At this stage, you may also want to consider getting a business credit card for expenses and basic accounting software to keep track of your finances.

This is also a good time to get a handle on your tax obligations. As a business owner, you’re generally responsible for paying self-employment tax and making quarterly estimated tax payments to the IRS. If you’re selling physical products, you may also need to collect and remit sales tax depending on your state.

It’s worth talking to an accountant early, even just for a one-time setup conversation, so you don’t get caught off guard at tax time.

Step 8: Get Funding (If Needed)

Some businesses have minimal startup costs, while others require a significant upfront investment.

For example, service businesses like consulting or tutoring usually don’t require a large investment, while retail, food, or laundromat businesses may require tens of thousands of dollars (or even more!)

Funding options at this stage include using your personal savings, taking out a business loan or line of credit, or getting investors.

Step 9: Set Up Operations

This is where you build the systems that keep your business running.

Depending on your business, that might include:

A website or online store
Scheduling or booking software
Payment processing
Inventory management
Equipment and supplies

Step 10: Launch & Market Your Business

Once everything is in place, it’s time to go live and market your business. Keep it simple at first — the goal is getting real customers and refining from there.

Local and service businesses: Your biggest priority is showing up in local search. Set up a Google Business Profile, ask early customers for reviews, and make sure your name, address, and phone number are consistent everywhere online.
Online businesses: Focus on SEO and social media early. Figure out where your target customers spend time — whether that’s Instagram, TikTok, Pinterest, or LinkedIn — and show up there consistently before investing in paid ads.
Product-based businesses: Start on a platform where buyers already exist, like Etsy, Amazon, or eBay, before building your own standalone store. It’s easier to get early sales and validate your product before investing in your own site.
All businesses: A simple website or landing page is non-negotiable. It doesn’t need to be fancy, but it needs to exist so customers can find you and understand what you offer.

Which Type Of Business Should You Start?

The steps to start a business are mostly the same across the board, but there are some key differences based on the type of business you’re starting.

Before you go further, it helps to understand what type of business you’re building and what that means for your time, money, and day-to-day operations.

Business Type	Examples	Startup Cost	Difficulty	Best For
Online & Low-Overhead	Tutoring, consulting, subscription boxes, photography	Low ($ – $$)	Medium	Beginners, flexible schedules
Food & Beverage	Coffee shops, food trucks, catering, ice cream shops	High ($$$ – $$$$)	High	Hands-on owners, hospitality
Retail & Product-Based	Retail shops, online stores, subscription boxes	Medium ($$ – $$$)	Medium	Creative entrepreneurs
Service-Based & Local	Lawn care, delivery, body shops	Low – Medium ($ – $$$)	Low – Medium	Quick income, local markets
High-Investment	Laundromats, house flipping	High ($$$$)	High	Investors, long-term ROI
Side Hustles	Tutoring, consulting, photography	Low ($)	Low	Testing ideas, extra income

If you already have a specific business in mind, the sections below will help you understand what to expect and where to focus your time early on.

Online & Low Overhead Businesses

Examples: Online tutoring, subscription boxes, consulting, photography, call centers

Online and low-overhead businesses are usually the fastest and cheapest to launch, but these come with their own sets of challenges.

Instead of spending money on equipment or a physical location, you’re investing your time into building an audience, attracting clients, and standing out in a crowded market.

For example, an online tutoring business or consulting service can be started with little more than your expertise and a way to connect with clients. But you’ll need to attract and retain clients by carving out a niche and marketing your business so people can find you.

Other businesses — like subscription boxes — come with additional challenges. In addition to marketing, you’ll need to manage recurring billing, inventory, and shipping on a consistent schedule. While you can generate steady revenue from a business like this, you’ll need strong systems from day one.

Even something like a photography business depends heavily on building your portfolio and referrals from clients.

These businesses are:

Easier to start
Harder to differentiate
Highly dependent on marketing and customer acquisition

Food & Beverage Businesses

Examples: Coffee shops, food trucks, catering businesses, ice cream shops

Food and beverage businesses can be incredibly rewarding, but they’re also some of the most hands-on and complex to run.

Unlike online or service-based businesses, you’re dealing with physical space, equipment, inventory, and strict health and safety regulations. Before you serve a single customer, you may need permits, inspections, and approvals that can take weeks (or longer), depending on your location.

The structure of your business also makes a big difference:

A food truck gives you flexibility to move locations and test different markets, but you’ll still need reliable equipment, proper licensing, and a plan for where and when you’ll operate.
A coffee shop or ice cream shop depends heavily on foot traffic. Choosing the right location can make or break your business, and rent, utilities, and staffing costs add up quickly.

If you’re starting a catering business, you may not need a storefront, but you’ll still need a commercial kitchen setup, event planning skills, and a way to consistently book clients.

These businesses typically require a higher upfront investment, and it’s rarely passive — especially early on. You’ll likely be involved in day-to-day operations, managing staff, handling inventory, and ensuring everything runs smoothly.

In terms of revenue, many food businesses fall somewhere in the middle. They can generate income relatively quickly once you’re up and running, but profitability depends heavily on pricing, cost control, and consistent customer volume.

To summarize, food and beverage businesses are:

More expensive to start
More hands-on (especially in the early stages)
Highly dependent on location, systems, and consistency

Retail & Product-Based Businesses

Examples: Online stores, subscription boxes, small retail shops, boutiques

If you’re selling physical products — whether that’s handmade candles, curated subscription boxes, or retail goods — your biggest focus is going to be inventory, branding, and logistics.

Product-based businesses require you to invest in materials or inventory upfront. That means there’s more financial risk early on, especially if products don’t sell as expected.

For example, a candle business might seem simple to start, but success often comes down to branding, packaging, and differentiation. You’re competing in a crowded space, so things like scent profiles, visual identity, and product quality matter just as much as the product itself.

A subscription box business also falls into this category, but fulfillment adds other challenges. You’ll need to consistently source products, manage inventory, package orders, and ship them on a recurring schedule. Even small inefficiencies can add up quickly when you’re sending out boxes every month.

If you’re running a more traditional retail shop or online store, you’ll need to decide where you’re selling, such as platforms like Shopify or Etsy, a brick-and-mortar store, or a mix of both. Each option comes with its own costs, margins, and challenges.

In terms of revenue, you may make sales early, but consistent profitability depends on managing costs, pricing correctly, and keeping inventory moving.

In short, retail and product-based businesses are:

Moderate in startup cost
Inventory-driven
Highly dependent on branding, pricing, and fulfillment

Service-Based & Local Businesses

Examples: Lawn care, delivery services, auto body shops

Service-based and local businesses are often the fastest way to start making money.

Instead of building inventory or waiting to open a physical location, you’re offering a service people already need. That makes it easier to attract customers in your local area.

For example, a lawn care business can be up and running quickly with basic equipment, but you’ll still need a plan to find and retain local customers. That could mean things like setting up a Google Business Profile, collecting reviews, and building relationships in your community.

If you’re starting a delivery service, you’ll need to think about logistics. Route efficiency, reliability, and clear communication usually matter just as much as marketing when it comes to keeping customers.

A more specialized business, such as an auto body shop, requires higher startup costs. You may need certifications, insurance, and expensive equipment before you can even begin operating. But once established, these businesses can generate consistent, repeat business.

Once you land a client, you can start generating income almost immediately. Scaling, however, usually requires hiring, expanding your service area, or improving operational systems.

To summarize, service-based and local businesses are:

Faster to launch and monetize
Dependent on local demand and visibility
Easy to start solo, but harder to scale without help

High-Investment Businesses

Examples: House flipping, laundromats

Some businesses require a larger upfront investment, but offer the potential for long-term, more stable revenue.

Instead of focusing on speed or low cost, high-investment businesses are about making the right financial decisions early. Location, property selection, and equipment quality usually have a bigger impact on your success than marketing in the beginning.

For example, a laundromat can become a steady, semi-passive source of income once it’s established. But getting there requires a large upfront investment in machines, a solid lease or property purchase, and ongoing maintenance. If the location isn’t right or the equipment isn’t reliable, it’s hard to make a profit.

With house flipping, your returns depend on how well you buy, renovate, and sell. It’s not just about finding a property. It’s about managing renovation costs, timelines, and market conditions.

These businesses typically take longer to get off the ground, but they scale differently from service-based or online businesses. Instead of adding more clients, you’re increasing the value of assets or improving operational efficiency over time.

You may go months before seeing returns, especially in real estate-based models. But if executed the right way, the long-term payoff can be significant.

In summary, high-investment businesses:

Require more upfront capital
Are slower to generate returns
Are focused on long-term profitability

Side Hustles

Examples: Tutoring, consulting, photography, online services

If you’re not ready to go all-in on a business yet, starting with a side hustle is one of the smartest ways to test an idea.

Side hustles let you build something alongside your existing income. Instead of investing a lot of time or money upfront, you can start small, get real customers, and refine your business as you go.

For example, a tutoring business can start with just a few clients and expand through referrals or online platforms. A consulting business might begin with a few freelance projects before turning into ongoing contracts.

A photography business is another common starting point. You can start by booking weekend sessions, then build a portfolio, raise your rates, and take on more consistent work.

The biggest advantage here is flexibility, but that can also be the biggest challenge. Since you’re balancing this with other responsibilities, progress can be slower, and it’s easy to lose momentum without a clear plan.

In terms of revenue, side hustles vary widely. Some generate income quickly, while others take more time. The goal early on isn’t to scale fast, but to prove that your idea works before you make a full-time commitment.

Side hustles and scalable businesses are:

Low-risk and flexible
Easy to start, but require consistency
Best for testing ideas before going all-in

How Much Does It Cost To Start A Business?

Startup costs can vary widely, and one of the biggest mistakes new business owners make is underestimating how much they’ll need — especially when you factor in costs beyond the initial launch.

Here’s a realistic breakdown of what to expect:

Cost Level	Typical Range	Common Business Types	What You’re Paying For
Low-Cost	$0-$1,000	Consulting, tutoring, freelance services, some side hustles	Basic tools, website, marketing
Mid-Range	$1,000-$10,000	Online stores, subscription boxes, lawn care, delivery services, small product businesses	Inventory, equipment, branding, setup
High-Cost	$10,000+	Coffee shops, food trucks, laundromats, house flipping	Lease/property, equipment, buildout, staffing

These ranges can vary depending on your location and how you choose to launch, but they give you a realistic starting point for planning.

Costs Most New Business Owners Forget

No matter what type of business you’re starting, there are a few costs that are easy to overlook:

Marketing and customer acquisition
Ongoing software or tools
Repairs, maintenance, or replacements
Unexpected delays, slow initial sales, or seasonal slowdowns

Having a small financial cushion to cover these and unexpected costs can make a big difference in those early months.

Common Mistakes To Avoid When Starting A Business

Most new business owners don’t fail because they picked a bad idea. They fail because they make avoidable mistakes early on.

Skipping market validation: Jumping straight into a business without confirming demand is one of the fastest ways to waste time and money. Make sure people actually want what you’re offering before you invest your time or money.
Underpricing your product/service: Low pricing might help attract customers early, but it can quickly make your business unsustainable. If your pricing doesn’t cover your costs or your time, you’ll struggle to grow.
Underestimating costs: It’s not just the upfront expenses. Marketing, software, maintenance, and slow early sales can add up fast. This is especially true for food, retail, and equipment-heavy businesses.
Ignoring licenses, permits, and regulations: Launching your business the right way may take time. Skipping over licenses, permits, and regulations can delay your launch or shut down operations entirely.
Doing everything yourself: Doing everything on your own can slow growth and lead to burnout. Systems, tools, and support matter in every type of business.
Delaying your launch: Being prepared is important, but perfection isn’t required. Getting in front of real customers early helps you learn faster and improve what actually matters.

Next Steps To Launching Your Business

Starting a business is one thing. Running it is where the real work begins. In the beginning, focus on the basics: open your bank account, get your legal structure in place, and take one concrete step toward your first customer — whether that’s reaching out to someone in your network, setting up your profile on a platform, or just telling people what you’re doing.

Merchant Maverick has already done the research for you. Our in-depth guides break down the best business bank accounts, payment processors, and funding options, so you can get your business set up the right way.

Bio
LinkedIn
Latest Posts

Erica Seppala

Editor & Senior Staff Writer at Merchant Maverick

Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.

View Erica Seppala's professional experience on LinkedIn.