The Small Business Launch Guide: the paperwork, in the order it actually works

Starting a business generates forms from three levels of government plus your bank, your insurer and your first clients. Done in the wrong order, you will do several of them twice — the bank wants documents the state has not issued yet; the EIN application asks questions your formation decision answers. This guide sequences the launch for a US sole proprietor or single-member LLC. It is the free core of our Small Business Launch Packet, and it is general information, not legal or tax advice — your state, city and trade each add their own layer, and a one-hour consult with a local CPA or small-business attorney before you file is money well spent.

Step 1: Decide the shape before you file anything

Two decisions drive everything downstream. First, the entity: a sole proprietorship is automatic (you are the business, with full personal liability), while an LLC is a state filing that separates the business's legal identity from yours and has ongoing obligations — annual reports, fees, formal records. Second, the name: check it against your state's business registry, federal trademarks, and the domain and social handles you will want, before it goes on a filing you have to pay to change. Write both decisions down with the reasons; your future self, a bank, or a partner will ask.

Step 2: Register with the state

For an LLC, file the articles of organization with your state and pay the filing fee; many states also require an operating agreement (keep a signed copy even if the state does not ask to see it) and an initial or annual report — calendar that deadline the day you file, because LLCs get administratively dissolved over missed reports. Sole proprietors who operate under a name other than their own usually register a DBA ("doing business as") at the state or county level. When the state confirms, you have the founding document your bank is about to demand.

Step 3: Get the EIN — free, from the IRS, in that order of words

An Employer Identification Number is the business's federal tax ID. Apply on the IRS website; it is free and takes minutes. Any service charging you for an EIN is selling you a form you can file yourself. You will need the EIN for the business bank account, for payment processors, for hiring, and on the W-9 forms your clients will send you. Keep the IRS confirmation letter (CP 575) somewhere permanent — replacing it is slow, and banks and payroll services ask for it for years.

Step 4: Licenses, permits and tax accounts

Now the layer everyone forgets: your city or county business license, any state professional or trade license for your industry, health or fire permits if your work touches food, premises or the public, and a sales-tax permit if you sell taxable goods or services. Register for state tax accounts in the same pass. Build a simple tracker — license, issuing office, number, issue date, renewal date, fee — and review it quarterly. A lapsed license discovered by a client or an inspector is a credibility wound a $40 renewal would have prevented.

Step 5: Separate the money from day one

Open a business bank account with the formation documents and EIN letter in hand, and run every dollar of the business through it. Commingled money is the fastest way to untangle-able books and, for an LLC, an argument that the entity is not real. Set up a basic chart of accounts, pick an invoicing habit (numbered invoices, consistent terms — "due on receipt" or net-15 — recorded the day work is delivered), and capture expenses with receipts as they happen. Choose a simple bookkeeping tool or spreadsheet; the tool matters far less than the weekly habit of reconciling it.

Step 6: Paper between you and your clients

Before the first job, you need three working documents: a service agreement stating scope, price, payment terms, cancellation and who owns the finished work; a scope-of-work or estimate form the client signs; and a change-order form, because work expands and memory differs. Put your payment terms and late policy on every invoice. These are templates, not lawyering — for anything large, unusual or high-liability, have an attorney review your versions once; that review is cheaper than one disputed job.

The first-year calendar

  • Quarterly estimated tax payments (federal, and state where applicable) — four dates, calendared with reminders a week ahead.
  • Sales-tax filings on your state's schedule for your volume.
  • Annual report and registered-agent renewals for the entity.
  • License renewals from your tracker.
  • Year-end: 1099s to contractors you paid $600 or more, records retained, and a clean handoff to whoever prepares your return.

The Small Business Launch Packet turns this sequence into working documents: the formation and EIN worksheets, license tracker, first-year tax calendar, banking and bookkeeping starters, invoice template, and the client agreement, scope and change-order forms — each with a briefing on what people most often get wrong. See pricing, or continue with the free guides: Moving Home, Family Emergency, and Rental Property.