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Checklist for Starting a Business

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Our checklist for starting a business helps you take the first steps towards starting up your business and ensuring you have everything you need to get started.

Starting your own business is a journey into the unknown. Identifying a gap in the market that you have the skills to fill with your product or service is just the first step. As an entrepreneur, you’ll need to learn all the additional skills required to make your business successful: marketing, admin, accounting, human resources, legal, and much more. With your own business, there’s no boss above you to help you solve the significant challenges; it all comes down to you.

To make this challenge just slightly more manageable, we’ve put together a checklist that will help you take the first steps on your entrepreneurial journey and set a solid foundation for growing your business and being your boss.

This checklist for starting a business serves as your guide through the essential steps of laying down that foundation, from deciding on your business's structure to selecting the right tools to simplify your entrepreneurial journey. Dive in and ensure you're hitting all the pivotal milestones on your path to success.

Validate your business idea.

The first is to ensure you have a valid business idea. This can come in the form of a business plan which helps guide you through all the steps of confirming what you want to build is viable, including:

  • Market research - who is the target market, what do they want from your product or service, and where/how will they want to buy it
  • Competitor analysis - who are your competitors, and how will you compete against them
  • Pricing vs costs - how much do you need to sell to break even and then turn a profit
  • Crafting a value proposition - what makes your business unique, and why will people choose you over your competitors

Some helpful resources for validating your business idea:

The Business Model Canvas - Often, full business plans can be a little overkill. Before you take on that task, try using the Business Model Canvas first. This makes you think through the critical elements of your business model, including your value proposition, customer segments, activities, cost structures, and everything else you need to consider.

HubSpot Business Plan Templates - If you’re ready to dive into an entire business plan, then HubSpot has some great templates to download to set you on your way.

Deciding on a structure for the business

Choosing the proper legal structure for your business is a pivotal decision. Your choice impacts various aspects, from how much you pay in taxes to your degree of personal liability and how you can raise money. You can always change your structure, but that can be a pain. Try to be sure you know what type of company you are building before deciding on the structure. If you’re a startup planning to raise money, then a C-corporation is the only route you can go. If you are building a small business like a plumber, a sole proprietorship or partnership likely will work for you.

Here's a deeper dive into the main types of business structures, their advantages and disadvantages, and the legal and tax implications associated with each.

Sole Proprietorship

This is the simplest form, where the business is owned and operated by a single individual.

Sole Proprietorship Pros

  • Easy and inexpensive to set up.
  • Complete control over the business.
  • Profits are taxed only once (on the owner's personal tax return).

Sole Proprietorship Cons

  • Unlimited personal liability: Owners are personally responsible for all business debts and liabilities.
  • Difficulty in raising capital.

Sole Proprietorship Legal and Tax Implications

Profits and losses are reported on the individual's personal income tax return. No separate business tax returns are needed.

Sole Proprietorship Examples

  • Freelancers and Consultants: Individuals offering writing, graphic design, marketing, or other professional services on a contractual basis.
  • Home-based Businesses: Such as crafters selling on Etsy or someone offering tutoring services.
  • Personal Trainers: Those who may operate independently, renting space from a gym or visiting clients' homes.
  • Independent Contractors: Plumbers, electricians, or other tradespeople working for themselves.


A business owned by two or more people.

Partnership Pros

  • Easy to establish.
  • Broader resources due to multiple owners.
  • Shared financial commitment.

Partnership Cons

  • Each partner is liable for the actions of the others.
  • Potential for disputes among partners.

Partnership Legal and Tax Implications

Requires an annual partnership return, which reports income and deductions. Individual partners report their share of profits and losses on their personal tax returns.

Partnership Examples

  • Law Firms: Often, a group of lawyers band together under a partnership, sharing profits, losses, and liabilities.
  • Medical Practices: Similar to law firms, doctors might come together to share resources, office space, and clientele.
  • Accounting Firms: Accountants combining their practices to offer a range of services under one brand.
  • Joint Ventures: Two companies or entrepreneurs collaborating on a specific project or business idea.

Limited Liability Company (LLC)

Combines the flexibility of a partnership with the liability protection of a corporation.

Limited Liability Company (LLC) Pros

  • Limited liability for owners.
  • More flexibility in management and distribution of profits.
  • Avoids double taxation seen in corporations.

Limited Liability Company (LLC) Cons

  • More paperwork and formalities than a sole proprietorship or partnership.
  • Varies by state: Some states charge additional fees.

Limited Liability Company (LLC) Legal and Tax Implications

Can be taxed as a sole proprietorship, partnership, or corporation. Provides personal asset protection against business debts and claims.

Limited Liability Company (LLC) Examples

  • Real Estate Investment: Individuals or groups buying property to rent or sell can benefit from the liability protection an LLC provides.
  • Small to Medium Retail Businesses: Such as a local coffee shop or boutique store.
  • Tech Startups: Especially those that don't yet need significant capital from venture capitalists or don't want to go public.
  • Consulting Agencies: Where a group of professionals offers specialized advice, like in IT or business strategy.


A legal entity separate from its owners.

Corporation Pros

  • Limited liability: Owners aren't personally responsible for business debts.
  • More straightforward to raise capital through the sale of stock.
  • Continuity: The business continues even if an owner departs.

Corporation Cons

  • More expensive and complex to set up.
  • Possible double taxation: The corporation pays taxes on profits, and shareholders pay taxes on dividends.

Corporation Legal and Tax Implications

Required to pay both federal and state corporate income taxes. Detailed record-keeping and reporting necessary.

Corporation Examples

  • Large Manufacturing Companies: Like those producing electronics, cars, or consumer goods on a large scale.
  • Technology Companies: Big names like Apple, Google, and Microsoft.
  • Pharmaceutical Companies: Developing and selling medicine and medical technologies, often with significant R&D departments.
  • Multinational Retail Chains: Such as Starbucks, McDonald's, or Walmart, operating in multiple regions or countries.

Get Registered

Once you have your business model and company structure figured out, it’s time to make things official! Every company will need to register with the IRS, and then, depending on your business and the state you’re operating in, you might need additional permits and registrations. Here, we’ll run through what you need and how to get it.

Legal Entity and Employee Identification Number (EIN)

This number is critical for setting up payroll and getting a bank account. Think of getting this as your company formation.

In the old days, you might pay a lawyer to do this. But now, there are inexpensive ways to do this using an online service. Here are our favorites:

Stripe Atlas: If you are planning to take payments online, you’ll likely use Stripe for that. Stripe also offers Atla, a safe and easy tool to form a company. Atlas will create your legal entity, issue stock to founders, and file your 83(b) tax election, all with a few clicks.

ZenBusiness: If you aren’t taking payments online, then ZenBusiness is an excellent option. They make it quick and easy to register your business, get your EIN, and even build a website and register a domain name.

State/Business specific registration

Beyond your federal EIN, other permits and registration will vary by state and type of business. For example, a bakery might require registering with the health department, while a contractor will need a license from the state.

There is no one-size-fits-all tool to help you figure this all out. However, the Small Business Administration has a great primer to help you do the research.

Setting up your Finances

With your EIN in hand, you can now set up the financial side of your business. Below is a checklist of all the different business tools you’ll need, along with resources to help you manage them.

Business bank account

The first thing you’ll need to set up is a business bank account. There are lots of banks out there, but below are a few of the ones we recommend because of fees, ease of use, and support:

Mercury*: A startup itself, Mercury is online only and super easy to set up. We use Mercury at Peak as an LLC, and I used it for my prior startup, Taskable, which is a C-corp. Use this link, and we’ll each get $250 when you deposit $10k within 90 days.

Nerdwallet: If Mercury isn’t for you, check out Nerdwallet’s ranking of best business bank accounts.

Funding your business

You’ll likely have a startup period where costs outweigh revenue, and you’ll need to invest in your business. Generally, the seed funding is done by the business owners. You can also look for investors, but generally, this is for high-growth companies like tech startups. There are also loans available, primarily through the Small Business Administration.

Here are some resources to check out:

SBA Loans: Government-backed loans to help you start or expand your business. The SBA has a Lender Match tool to help you find the right lender for your business.

Y Combinator Guide to Seed Fundraising: If you are planning to build a high-growth startup that would be attractive to angel investors and venture capitalists, then YC has a great resource. It covers why you should raise money, the various forms of capital, and how to find investors.


If you have employees or even pay yourself, you’ll need a service to manage payroll. There are a few things to consider when deciding on the right one, including whether you’ll have full-time employees or primarily contractors and whether all your employees will be based in the same state or country or all over the world.

Deel*: If you are a global company from day one, particularly hiring contractors, then Deel is a great tool. It manages compliance and payroll processing across jurisdictions. It even has contract templates. Setting up a new employee or contractor is just a few clicks, and you can pay with a button (or set up autopay). We use Deel at Peak and highly recommend it.

Gusto: Gusto is an online payroll processor that allows you to hire, pay, and manage your team all in one place.

ADP: Payroll process that has been around for a long time.

Equity management

If you are setting up a corporation and have multiple founders and potential investors, you’ll need an equity management tool. There are a couple to choose from:

Carta: Manage your capitalization table (list of equity investors), raise money, and stay compliant all in one place.

Pulley: Pulley helps thousands of startups issue and track their equity. Get 409A valuations, cap table management, and equity advice all in one system.

Bookkeeping and taxes

The least fun part of running a business, bookkeeping and filing your taxes is critical to not running afoul of the IRS.

Managing your business's finances is essential not just for operational efficiency but also for legal compliance. Proper bookkeeping ensures a clear picture of your business's financial health, which is crucial for making informed decisions. Tax compliance, on the other hand, provides you with the ability to meet all regulatory requirements, avoiding penalties and potential legal issues.


Bookkeeping involves the consistent recording, storing, and retrieving of financial transactions for your business. This can include transactions related to sales, purchases, income, and payments.

Some tools for bookkeeping:

QuickBooks*: One of the most popular tools for small to medium businesses. It offers features like expense tracking, invoice creation, and financial reporting. We use Quickbooks at Peak.

Xero: Known for its user-friendly interface and cloud-based access, Xero is an excellent tool for businesses that need flexibility. It offers features such as bank reconciliation, invoice management, and multi-currency support.

FreshBooks: Tailored for freelancers and small businesses, FreshBooks offers time tracking, expense management, and invoicing features. Its intuitive design is especially beneficial for those new to bookkeeping.


Every business is subject to taxation, and understanding your tax obligations is crucial. This involves knowing what taxes your business owes, how to calculate them, and when they should be paid.

Some tools to help you manage taxes:

TurboTax Business: Designed for corporations, partnerships, and LLCs, TurboTax offers guided tax preparation, ensuring you don't miss any potential deductions and stay compliant with tax laws.

Wave: While primarily known for its free bookkeeping software, Wave also offers tax services tailored for freelancers, entrepreneurs, and small business owners.

TaxJar: Specifically designed for sales tax, TaxJar automates the calculations, reporting, and filings of sales tax, making it a valuable tool for businesses that sell products.

Other helpful tools

With the boring basics such as financials and registering your business out of the way, now it's time to set up your marketing and operations.

Here are other tools and resources to help you run your business.

Website platforms

Your home on the internet, a website is a critical way of introducing your products and services to the world. Having a website is table stakes nowadays, and not having one will ultimately cost you customers.

There are several things to consider when deciding on how to approach building a website:

  • Build in-house or hire an agency/freelancer: If you need something simple that showcases your services and how to get a hold of you, and you’re somewhat tech savvy, then you can probably build something yourself on one of the drag-and-drop platforms like Squarespace. However, if you need something more complex, consider hiring a freelancer or agency like Peak.
  • Selling online: If you’re selling online, then Shopify or Webflow are the best tools for the job. They have built-in eCommerce capabilities that make selling online easy.
  • Search engine optimization (SEO): If the platform you’re using, or the freelancer/agency you hired, focused on SEO and ensuring your business shows up in search results when someone searches for products or services you offer.

We’ve done a deep dive into which website platform is right for your small business. If you’re looking for a world-class website on a pay-as-you-go pricing model, consider Peak Digital Studio.


A professional email address with your company domain name gives you more credibility. Google Workspace is the gold standard. It’s easy to set up and affordable, and it also gives you access to a suite of tools like Google Docs, Sheets, Slides, and much more.

Customer Relationship Management

A Customer Relationship Management (CRM) system is pivotal in managing your company’s interactions with current and potential customers. It’s designed to streamline processes, build customer relationships, improve customer service, and increase profitability. With many options in the market, selecting the right CRM can be overwhelming. Here's how you can make an informed decision:

Assess Your Needs

Before diving into the features of various CRM systems, clearly define what you want to achieve with your CRM. Are you looking to improve lead tracking, enhance customer service, automate marketing, or all of the above?

Ease of Use

The CRM you choose should be intuitive and easy to use for your team. A system that requires extensive training can lead to low adoption rates and reduced productivity. Tools that feature a clean, user-friendly interface should be a priority.

Customization and Scalability

As your business grows, your CRM should grow with you. It’s crucial to choose a CRM that is customizable to your business processes and can scale up to accommodate new users, more extensive customer databases, and additional functionality.


Integrating with other tools and systems you use (e.g., email, calendar, marketing automation, customer service software) is essential. A CRM that fits well into your existing tech ecosystem will increase efficiency and provide a more unified view of customer interactions.


Understand the total cost of ownership, not just the subscription fee. Consider implementation costs, customization, training, and support. Determine your budget and evaluate the ROI that different CRM solutions can deliver.

CRMs to Consider

Salesforce: Known for its customizability and extensive ecosystem of third-party applications. Ideal for businesses of all sizes.

HubSpot CRM: A free tool that’s great for small to medium-sized businesses, with an easy-to-use interface and basic features that cover a wide range of needs.

Zoho CRM: Offers a good balance between features and simplicity, suitable for businesses that need an affordable yet powerful CRM.

Pipedrive: This CRM is built around a sales pipeline framework, making it intuitive for sales teams to navigate and manage their sales processes. It's particularly favored for its easy setup and user-friendly interface. Pipedrive is excellent for small to medium-sized businesses that want a sales-focused CRM to help them track and manage their sales activities effectively.


While starting a business is daunting, we hope this checklist for starting a business gives you the resources you need to take the first natural step on your entrepreneurial journey.

While this guide serves as a roadmap, don’t hesitate to reach out to seasoned professionals or mentors who can offer wisdom beyond what’s on paper. With each box you tick off, you’re not just completing a task – you're stepping closer to turning your entrepreneurial dreams into reality. Use this checklist not just as a series of steps but as a compass to guide your journey from inception to success, adapting as you learn and grow. The road ahead is exciting, and with the right preparation, you're well on your way to creating something remarkable.

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Matthew Johnson

Published on

November 3, 2023