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Small Business Startup Checklist
This checklist covers every step needed to go from a business idea to your first sale, in the order you should complete them. The entire process takes two to six weeks for most small businesses and costs $200 to $1,500 depending on your state, business type, and how much you do yourself versus hiring help.
Phase 1: Validation and Planning
Research your market and competitors.
Before spending money on registration and setup, confirm there is a real market for what you want to sell. Search Amazon, Google Shopping, and major competitors' websites to see who already sells similar products or services and at what prices. Check Google Trends to see whether demand for your product category is growing, stable, or declining. Read customer reviews on competitor products to identify gaps and complaints you can address. Look at the competitive landscape honestly: if there are hundreds of sellers offering the identical product with established reviews and strong brands, you need a differentiation strategy before entering. If there are a few competitors with mediocre offerings and clear customer complaints, you have a genuine opportunity.
Before spending money on registration and setup, confirm there is a real market for what you want to sell. Search Amazon, Google Shopping, and major competitors' websites to see who already sells similar products or services and at what prices. Check Google Trends to see whether demand for your product category is growing, stable, or declining. Read customer reviews on competitor products to identify gaps and complaints you can address. Look at the competitive landscape honestly: if there are hundreds of sellers offering the identical product with established reviews and strong brands, you need a differentiation strategy before entering. If there are a few competitors with mediocre offerings and clear customer complaints, you have a genuine opportunity.
Estimate your startup costs.
Write down every expense you will incur before your first sale. Common startup costs include: LLC formation fee ($50 to $500), registered agent service ($49 to $150/year), domain name ($10 to $15/year), ecommerce platform subscription ($29 to $79/month for Shopify, free for WooCommerce plus hosting), initial inventory ($500 to $10,000+ depending on product), product photography ($0 if DIY, $200 to $1,000 if professional), packaging and shipping supplies ($50 to $300), business insurance ($300 to $1,000/year), accounting software ($0 to $30/month), and a financial cushion for the first three months of operating expenses. Add 25% to your total estimate for expenses you did not anticipate. If the total exceeds your available cash, trim the plan or explore funding options before committing.
Write down every expense you will incur before your first sale. Common startup costs include: LLC formation fee ($50 to $500), registered agent service ($49 to $150/year), domain name ($10 to $15/year), ecommerce platform subscription ($29 to $79/month for Shopify, free for WooCommerce plus hosting), initial inventory ($500 to $10,000+ depending on product), product photography ($0 if DIY, $200 to $1,000 if professional), packaging and shipping supplies ($50 to $300), business insurance ($300 to $1,000/year), accounting software ($0 to $30/month), and a financial cushion for the first three months of operating expenses. Add 25% to your total estimate for expenses you did not anticipate. If the total exceeds your available cash, trim the plan or explore funding options before committing.
Write a basic business plan.
You do not need a 40-page formal business plan to launch a small ecommerce business. A lean one-page plan is sufficient for most startups. Cover these essentials: what you are selling, who you are selling to, how customers will find you (marketing channels), your pricing and margin targets, your startup costs and funding source, and your revenue goal for the first 12 months. This document forces you to think through the critical questions and gives you a reference point to check your progress against. If you are seeking a loan or grant, a more detailed formal business plan may be required.
You do not need a 40-page formal business plan to launch a small ecommerce business. A lean one-page plan is sufficient for most startups. Cover these essentials: what you are selling, who you are selling to, how customers will find you (marketing channels), your pricing and margin targets, your startup costs and funding source, and your revenue goal for the first 12 months. This document forces you to think through the critical questions and gives you a reference point to check your progress against. If you are seeking a loan or grant, a more detailed formal business plan may be required.
Phase 2: Legal Formation
Choose your business structure.
For most small businesses, form an LLC. It provides personal liability protection, pass-through taxation, and minimal compliance requirements. If you are testing an idea with very low financial risk and want to avoid the formation cost, you can start as a sole proprietor and convert to an LLC later. If you are launching with a partner, form a multi-member LLC with a detailed operating agreement.
For most small businesses, form an LLC. It provides personal liability protection, pass-through taxation, and minimal compliance requirements. If you are testing an idea with very low financial risk and want to avoid the formation cost, you can start as a sole proprietor and convert to an LLC later. If you are launching with a partner, form a multi-member LLC with a detailed operating agreement.
Choose and verify your business name.
Check availability in your state's business name database, on domain name registrars (the .com is the priority), and in the USPTO trademark database. Secure the domain name immediately if available. Register matching social media handles on major platforms. If you want to operate under a different name than your LLC's legal name, you will also need a DBA filing.
Check availability in your state's business name database, on domain name registrars (the .com is the priority), and in the USPTO trademark database. Secure the domain name immediately if available. Register matching social media handles on major platforms. If you want to operate under a different name than your LLC's legal name, you will also need a DBA filing.
File your formation documents.
File Articles of Organization with your state's Secretary of State. Include your LLC name, registered agent information, and business address. Pay the filing fee ($50 to $500 depending on state). Wait for processing (3 to 10 business days for online filing, up to 4 weeks for mail) or pay for expedited processing.
File Articles of Organization with your state's Secretary of State. Include your LLC name, registered agent information, and business address. Pay the filing fee ($50 to $500 depending on state). Wait for processing (3 to 10 business days for online filing, up to 4 weeks for mail) or pay for expedited processing.
Get your EIN from the IRS.
Apply online at IRS.gov. It is free and takes five minutes. You receive the EIN immediately. Do this as soon as your LLC is filed because you need the EIN for the next several steps.
Apply online at IRS.gov. It is free and takes five minutes. You receive the EIN immediately. Do this as soon as your LLC is filed because you need the EIN for the next several steps.
Apply for business licenses and permits.
Check your city, county, and state for required licenses. At minimum, most businesses need a general business license and a sales tax permit. If operating from home, check whether you need a home occupation permit.
Check your city, county, and state for required licenses. At minimum, most businesses need a general business license and a sales tax permit. If operating from home, check whether you need a home occupation permit.
Phase 3: Financial Setup
Open a business bank account.
Bring your Articles of Organization, EIN confirmation letter, operating agreement, and photo ID to the bank. Open a business checking account and get a business debit card. Use this account exclusively for business transactions from day one. Never commingle personal and business funds.
Bring your Articles of Organization, EIN confirmation letter, operating agreement, and photo ID to the bank. Open a business checking account and get a business debit card. Use this account exclusively for business transactions from day one. Never commingle personal and business funds.
Set up accounting software.
Connect your business bank account to QuickBooks, Xero, or Wave (free). Configure your chart of accounts for your business type. Set up expense categories that match your product lines and cost centers. Accurate bookkeeping from day one saves enormous time and money at tax time and gives you real-time visibility into your profitability. Our accounting guide covers the setup process.
Connect your business bank account to QuickBooks, Xero, or Wave (free). Configure your chart of accounts for your business type. Set up expense categories that match your product lines and cost centers. Accurate bookkeeping from day one saves enormous time and money at tax time and gives you real-time visibility into your profitability. Our accounting guide covers the setup process.
Register for sales tax in your home state.
If your state has a sales tax and you sell taxable products, register for a sales tax permit before your first sale. You will collect tax from customers in states where you have nexus and remit it to the state on a monthly, quarterly, or annual filing schedule. As your sales grow, you will likely need to register in additional states based on economic nexus thresholds.
If your state has a sales tax and you sell taxable products, register for a sales tax permit before your first sale. You will collect tax from customers in states where you have nexus and remit it to the state on a monthly, quarterly, or annual filing schedule. As your sales grow, you will likely need to register in additional states based on economic nexus thresholds.
Phase 4: Operations Setup
Get business insurance.
At minimum, get general liability insurance ($500,000 to $1,000,000 in coverage). If you sell physical products, add product liability coverage. Get quotes from multiple providers. Online insurance platforms like Next Insurance, Hiscox, and Simply Business can provide quotes and bind policies within minutes.
At minimum, get general liability insurance ($500,000 to $1,000,000 in coverage). If you sell physical products, add product liability coverage. Get quotes from multiple providers. Online insurance platforms like Next Insurance, Hiscox, and Simply Business can provide quotes and bind policies within minutes.
Build your website or set up your sales channel.
Choose your ecommerce platform (Shopify, WooCommerce, or Amazon FBA/Seller Central) and set up your store. Add product listings with quality photos and detailed descriptions. Configure your checkout, shipping settings, and payment processing. Test the entire purchase flow by placing a test order before going live.
Choose your ecommerce platform (Shopify, WooCommerce, or Amazon FBA/Seller Central) and set up your store. Add product listings with quality photos and detailed descriptions. Configure your checkout, shipping settings, and payment processing. Test the entire purchase flow by placing a test order before going live.
Set up shipping and fulfillment.
Choose your carriers, set up a shipping account with USPS, UPS, or FedEx, and configure shipping rates in your store. Purchase a shipping scale and label printer if fulfilling orders yourself. For larger operations, set up a 3PL fulfillment service before launch so you are ready to ship when orders start coming in.
Choose your carriers, set up a shipping account with USPS, UPS, or FedEx, and configure shipping rates in your store. Purchase a shipping scale and label printer if fulfilling orders yourself. For larger operations, set up a 3PL fulfillment service before launch so you are ready to ship when orders start coming in.
Set up a business phone number.
Get a dedicated business phone number through Google Voice (free), Grasshopper, or OpenPhone so you can keep your personal number private and present a professional contact option to customers.
Get a dedicated business phone number through Google Voice (free), Grasshopper, or OpenPhone so you can keep your personal number private and present a professional contact option to customers.
Phase 5: Launch Preparation
Create your marketing foundation.
Set up business profiles on Google Business (if applicable), social media platforms relevant to your audience, and any marketplaces where you plan to sell. Plan your launch marketing: will you use paid ads, social media content, email marketing, or SEO? Even a basic launch plan is better than going live and hoping customers find you.
Set up business profiles on Google Business (if applicable), social media platforms relevant to your audience, and any marketplaces where you plan to sell. Plan your launch marketing: will you use paid ads, social media content, email marketing, or SEO? Even a basic launch plan is better than going live and hoping customers find you.
Make your first sale.
Launch your store and actively drive traffic to it through the channels you identified. Your first sale validates that your business works end to end: someone found your product, decided to buy, completed checkout, you received the order, picked and packed the product, shipped it, and the customer received it. Everything after the first sale is optimization. Celebrate it, then focus on how to get the next 100.
Launch your store and actively drive traffic to it through the channels you identified. Your first sale validates that your business works end to end: someone found your product, decided to buy, completed checkout, you received the order, picked and packed the product, shipped it, and the customer received it. Everything after the first sale is optimization. Celebrate it, then focus on how to get the next 100.