Quick Answer: Start a small business in 8 steps — choose structure (LLC for most), register with your state ($50–$500), get an EIN (free), open a business bank account, get insurance, set up accounting, create a service agreement, and get your first client.
How to Start a Small Business in 2026
| Step | Task | Cost | Time |
|---|---|---|---|
| 1 | Choose business structure (LLC) | Free (decision) | 1 hour |
| 2 | Register LLC with state | $50–$500 | 30 min + wait |
| 3 | Get EIN from IRS | Free | 5 min |
| 4 | Open business bank account | $0–$15/mo | 1 hour |
| 5 | Get general liability insurance | $500–$1,500/yr | 2 hours |
| 6 | Set up accounting software | $0–$30/mo | 1 hour |
| 7 | Create service agreement | $0–$17 | 1 hour |
| 8 | Get first client | $0 | Ongoing |
Step 1: Choose Your Business Structure
LLC (Limited Liability Company) is the right choice for most small businesses. It separates your personal assets from business liabilities, passes taxes through to your personal return, and costs $50–$500 to form. Sole proprietorship is free but offers zero liability protection.
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Get 80% Off Hosting →Step 2: Register With Your State
File Articles of Organization online through your state's Secretary of State website. Cost varies by state: Wyoming ($100), Delaware ($90), California ($70 + $800/yr franchise tax), Texas ($300). Processing takes 1–3 business days online. Check: full LLC cost by state guide →
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Do I need an LLC or just a sole proprietorship?
An LLC is worth the cost if you're doing any client work, have a vehicle used for business, or have any assets to protect. A solo contractor gets sued and has their personal bank account drained — an LLC would have stopped that.
When do I need to collect sales tax?
For physical products shipped to customers in states where you have "nexus" (a physical presence or significant sales). Services are generally not taxed in most states. Check with a local accountant once revenue starts.
What business bank account should I use?
Relay (free, $0 minimum), Mercury (free, great for online businesses), Chase Business Complete ($15/mo, waived with balance), or your local credit union. Avoid personal accounts for business — it's a bookkeeping and legal nightmare.