5 Steps to start a small business in 2025
Starting a small business in 2025 is a smart thing to do. At this point you should have a good understanding of the industry you are targeting. The steps in this guide are outlined for some one who has researched their market and is ready to start taking payments. It is important to note how you will set your business up. Sole proprietor, Limited Liability Company, Partnership, etc.. This structure is crucial to how much liability you are personally held liable for. It also affects your taxes come tax season so it is important to review and be sure you proceed with what works best for you. The next 5 steps to start a small business are as follows:
Step 1: File your Articles of Incorporation? This will cost you roughly $300. After you know what your business name will be, it is very important to file these documents. You are not considered legal in the eyes on the law until you do. If there are any licenses, or certifications that your business will need to operate, you will want them listed on your Articles of Incorporation. Check with your state to confirm you register your entity and its name to all required offices. This will save you a headache down the line. If you are in the state of Texas you can file these electronically and save time. Visit the SOS website and setup your account to proceed this route.
These 5 steps to start a small business are the bare minimum.
Step 2: Once you receive your approved Articles of Incorporation back, file for your EIN Number, which is a number that the IRS assigns to your newly formed entity. Consider this number to be the social security number of your business giving it an identity. This is a very important number and you want to keep up with this original filed document. It is best to save it some where you can easily access it. This number is how the IRS tracks your company's payments.
Step 3: Open a bank account in your new Business name. It does not matter the bank. Try to pick a bank that suits your needs for short-term and long term. It does not necessarily have to be a big bank. It can be a small local bank just be sure the account is Business checking and savings that provide you what you want. You will need your Articles of Incorporation, EIN, along with a Valid ID. Once you have obtained the bank account you now can accept payments. There are various methods for receiving payments. It is recommended to set your business up for all forms of payment.
More paperwork if you filed Limited Liability Company
Step 4: This step is optional and only for those who file an LLC. If you file sole proprietor or partnership you can skip this step. For those that filed LLC at this point you will want to file your S-Corp Filing Form 2553 and Form 8832. Both of these forms have to be filed and sent. There is not a filing fee with the state for these but they have to be filed together. Filing these forms helps limit your liability and tax even more. There are some pros and cons to filing this way but when you are new and starting out it is the recommended way.
Step 5: Then after you have completed those steps you want to submit your BOI report within 90 Days of filing your Articles of Incorporation this is important and a new procedure. This report helps identify Beneficial Ownership Information about individuals who own or control the company. There is a deadline to when you should file this so it is important to get it done.
Completing these 5 Steps to start a small business after you have researched your market sets you up for protection. You now are able to operate and not have to worry about losing personal assets because something within your business caused significant monetary damage.
Do you have business insurance?
Another note is to get business insurance as well depending on your business needs. All businesses can use some form of insurance. Knowing which insurance you need can be confusing. Seek out the help of a professional anytime you come across something you are not familiar with. That is the best advice I can give someone that is starting a new business. Know when to ask the questions, know when to ask for help.
Follow these 5 steps and your business will be good to go for the long hall.