- Get a Employer Identification Number (EIN) from irs.gov. It’s free and it’ll be used to identify your new business entity. You’ll need your EIN for all business transactions. Once you get this number, then you can start doing business immediately.
- Form a Corporation or LLC via LegalZoom.com, Bizfilings.com, or CorpNet.com. I used BizFilings.com. Depending on which State you’re in, it’ll cost you anywhere from $45 to $440 for all of the paperwork. In DC, it was around $300. Don’t know which type of business to form? An LLC is the easiest for businesses with only one owner or for businesses with multiple owners who plan on having an equal stake in the company. If you want the owners to have different stakes in the company, then form a corporation instead.
- Open a business checking account at Etrade. You can do this all online. You’re going to need the Articles of Organization from your business, which will be created in step 2. Other banking options are to go to one of your local branches, like TD Bank or Wells Fargo/Wachovia. I find that Etrade offers the best online banking tools though and you can move money via Etrade pretty easily too. I opted for the standard Money Market business checking account. $100 minimum deposit and $1,000 average monthly minimum to avoid fees.
- Get a business credit card. American Express is the obvious choice, but you can also go through your bank to get a credit card. I opted for the American Express Business Cash Rebate Card. I get roughly $300-$500 back each year in “rebates”. No clue what they’re from. Of course, there’s Discover Business Card, which is pretty good, but discover is not widely accepted around the world. Chase.com also offers a nice business credit card. And if you’re a baller, then you can go for the Black Card Visa; only $495/year with 24-hour concierge service.
- Get health insurance and dental insurance. I got both of mine from eHealthInsurance.com. You just enter all of your information, then select the best plan that fits you. I opted for the Carefirst Blue Cross Blueshield PPO plan. I have a $25 copay on all visits, $750 yearly deductible, 20% copay on all in-network services. My plan started at $127/month 6 years ago and now, it’s increased to about $198/month. My dental insurance is also PPO and my provider is Ameritas Group. I pay about $45/month for that.
That’s really about it. The only other thing that you have to do now is to make money, the easy part. 
Oh yeah, don’t forget to get a good accountant as well. It’ll make your life a lot easier come April 15th. Also, it may be wise to consult a business attorney before setting up your business. It could be a real pain in the butt if you set it up incorrectly…although, there’s really no wrong way to set up a business, if you’re just starting up. You can always dissolve a business and form a new one. If you have partners, definitely consult someone first.
great post. i always wanted to know how to start a business. stupid question since i have no clue about this stuff…what’s the reason for step #2? you need that info for taxes and stuff?
Well, once you create a separate business entity, most, if not all, liability goes towards the company instead of you, so if you get sued, or if you go bankrupt, it won’t affect your personal assets. If you don’t get incorporated, then what you own is also what your business owns, and vice versa. That’s how I understand it, at least.