7 Steps to Starting a Business

Copyright (c) 2006 Elias Stassinos

Here’s a really simple way… to start your business.

If you are starting a business, you will need one or more business licenses and tax ids. After reading this article you will know what business licenses you need to start a business.

First, regardless of the business you are starting, you will need a business license.

There are some businesses that don’t need one but that’s only 1% or less compared to the percentage of businesses that need a business license. So, regardless of whether you business is a home-based business, an online internet business, a contractor’s business, or a professional’s business, such as a doctor’s medical office, you need a business license. The business license requirement is a requirement in addition to a required license you might need from the state if you are a professional such as an attorney or hairdresser. Depending on the location of your business, or the type of business, the business is filed at the state, county or municipal level of government.

Second, if you using a business name that does not include your last name, you need to file a DBA (Doing Business As).

If your business name includes you last name but also includes a suffix such as “& CO” or “& Associates” or anything that denotes additional business owners, you need to file a DBA. You can also file a corporation or LLC instead of filing a DBA, but that may be a little more expensive. However, even if you file a Corporation or LLC, and the corporation name or LLC name is different from the business name you will use to conduct business, you need to file a DBA.

Third, if your business sells or leases taxable items or services, you will need to obtain a state sales tax id number (also called a seller’s permit, wholesale license, retail license or resale permit).

You will need a sales tax id number to buy wholesale, or if you are a wholesaler, you will need it to sell wholesale. For example, if you have a toy store, you will be able to buy wholesale without paying any taxes for the toys to the wholesaler and, subsequently, charging taxes to your customers when you sell the toys.

Fourth, if you will hire employees, you will need to obtain a federal employer tax identification number as well as a state employer tax identification number.

These numbers are required if you are an employer. Employment taxes are paid both to the federal and to the state government.

Fifth, if you are planning to run a serious company, you need to perform a nationwide business name search.

If you become a nationwide company, you may need to insure that no one else is using the business name you are going to use for you company. The way to acquire rights to the use of a business name is by selling specific products or providing specific services and using a specific business name in a certain small region or large one, such as a nationwide area. For example, if you sell Scandinavian furniture in Minnesota under the business name “Fine Scandinavian Furniture,” you acquire some rights to the business name in Minnesota. If another company in Minnesota decides to sell the same type of furniture with your business name, you can sue them to enjoin them from using your business name.

Sixth, get the cheapest business insurance available: incorporate your business or form a Limited Liability Company (LLC).

You are not required to incorporate or form an LLC but it is a very good idea to do so because a corporation or LLC is a separate “person” or legal entity. Filing a DBA, does not protect your personal assets. However, if you incorporate or form an LLC, and someone sues your corporation and obtains an unfavorable judgment against your corporation, he or she can only execute the judgment against the corporate assets — not your personal assets such as your home. Incorporating or forming an LLC is the best way to protect your own personal assets.

The last step is to take your DBA or corporate certificate to a bank and use it to open a business checking account and a merchant account.

You will need these accounts to cash business checks written out to your company name as well as use the merchant account to run credit card transactions.


You can hire an attorney to file your business documents, a less expensive legal service or you can do it alone. After obtaining the required business licenses discussed above, and opening your business accounts, you are legally able to start business operations. As an attorney, I have set-up quite a few small businesses and, invariably, they needed at least two or three of the above business licenses or tax id numbers. Having filed all the required business licenses will give you peace of mind to pursue other business activities such as promoting your business and providing customer support.

File all required business licenses for your business and start making money!