How to Start a Small Business: Your No-Fluff, Step-by-Step Playbook

Thinking about starting your own business? First of all—congrats. 🎉 

That first spark of an idea is the beginning of something big, but figuring out how to turn that idea into an actual, real-life business? It can feel pretty overwhelming. 

There’s paperwork, planning, probably a spreadsheet (or five), and all those nagging questions: “Am I doing this right?”, “Is there something I’m missing?”, and even, “Is it normal to have a business idea and a panic attack at the exact same time?”. 

Here’s the good news: you’re not supposed to have it all figured out right away! Starting a business is a wild mix of Googling things at midnight, learning as you go, and realizing there’s a whole bunch of stuff you didn’t even know you needed to know.

We’re here to make the journey a bit easier. In this guide, we’re breaking down how to start a small business in eight manageable steps, with practical advice, real-talk expectations, and a little encouragement along the way.

Let’s get into it.

Before we dive into the details of how to start a small business, let’s quickly define what it actually is. A small business is an independently owned company with fewer employees and less sales and revenue than the big-name corporations. 

In the U.S., the Small Business Administration (SBA) defines a small business as one with 500 or fewer employees—but in practice, most people think of small businesses as having 50 or fewer. Between 50 and 100 employees, things start to blur a bit, and once you’re past 100, you’re generally moving into medium-sized business territory.

That being said, when you’re just getting started, it’s usually just you, maybe with a co-founder, or a couple of contractors or part-time help. 

Now we’re really getting into the nitty-gritty—it’s time to talk money. If you’ve Googled this question before, you’ve probably gotten some version of “it depends.” 

And honestly? That’s true. But let’s unpack what “it depends” really means (and what it depends on 😏). 

The cost of starting your small business will largely depend on three things:

• What kind of business you’re starting: Will you be selling products, services, or both? Will you need a physical space, or can you operate online?

• Where you’re located: What are the licensing, zoning, and tax requirements in your city/state? How much will rent or utilities cost in your area? 
• How you plan to operate: Will you be running this solo or hiring help? What tools, software, or subscriptions do you need to operate efficiently? 

Regardless of your setup, creating a budget is essential. You don’t need to create any complex spreadsheets to start—just answer the questions above to get a ballpark idea of your startup and monthly costs.

• Rent: Whether you’re leasing a storefront, co-working space, or working from your kitchen table, there are always some costs tied to where you run your business. A brick-and-mortar spot will come with obvious expenses like security deposits, monthly rent, renovations, and utilities. But even working from home has its price, though the upside is you may be able to deduct a portion of your rent, internet, and utilities from your taxes!
• Equipment and supplies: Think of this as all the physical items your small business can’t run without—laptops, phones, machinery, tools, printers, or even a solid desk chair. Factor in both the one-time purchases and the things you’ll need to replace or restock regularly.
• Inventory: If you’re selling physical products, inventory is often your biggest upfront cost. This could be raw materials (if you're making things yourself), finished products, or wholesale items you’re planning to resell. And don’t forget packaging materials and shipping supplies—especially if you’re selling online.
• Business licenses and permits: Nearly every business needs some kind of license, permit, or registration. These requirements depend on your location and your industry, and fees can range from a small filing fee to several hundred dollars. Common examples include a business license, sales tax permit, health permit, or home occupation permit. It’s best to research these early to avoid any pesky fines.
• Insurance: Business insurance protects you from financial risk and, in some cases, is legally required. At a minimum, most business owners consider general liability insurance, which covers things like accidents or property damage. Depending on your business, you might also need professional liability, product liability, property insurance, or workers’ comp (if you have employees). It might feel like an extra expense now, but it can save you from much bigger costs down the road.
• Marketing and advertising: If no one knows you exist, they can’t buy from you! Small business marketing costs can vary widely, but you don’t need a huge budget to get started—you just need to invest some time and effort. You can DIY your logo, post on social media, and start building buzz without spending much. And then, as you grow, you can invest more money.
• Website and domain: Nowadays, having a website is basically a non-negotiable, no matter what kind of business you plan to start. Costs here include purchasing your domain name (usually $10–$20/year), paying for web hosting, and possibly hiring a designer or developer. If you’re using a website builder like Squarespace or Shopify, there may be monthly fees depending on which plan you choose.
• Software and subscriptions: You’ll likely rely on a mix of tools to keep things running smoothly! Think accounting software (like QuickBooks), project management tools (like Trello or Asana), and small business scheduling software (like YouCanBookMe). Luckily, if you’re wondering how to start a business without money, there are a ton of free startup tools you can use to get your business up and running. 

Easy bookings = happy clients

Impress potential clients with easy scheduling. Let clients book time with you in seconds via any device.

• Professional services: Unless you’re a lawyer or accountant, you’ll probably need one (or both) at some point. Whether it’s setting up your legal structure, reviewing contracts, or getting your books in order for tax season, having the right pros on your team can save you time, money, and stress. You might pay a flat fee, an hourly rate, or even retain someone on a part-time basis as your business grows.
• Payroll and hiring costs: Planning to hire employees or contractors? Budget not just for salaries or hourly wages, but also benefits, payroll taxes, training, and onboarding. If you’re working with freelancers, they may charge by the hour, project, or retainer. Either way, make sure to include labor in your operating budget—even if it’s just occasional help at first.
• Taxes: Ah, taxes—the thing no one wants to think about, but absolutely has to. These will be specific to where you live. In the U.S., for example, small business owners are usually responsible for self-employment tax, federal income tax, and possibly state and local taxes, too. A good rule of thumb is to set aside 25–30% of your income for taxes. Better yet, talk to an accountant to make sure you’re on track and not unpleasantly surprised at tax time. 😬
• Contingency/emergency fund: Things don’t always go as planned—equipment breaks, orders fall through, or unexpected fees pop up. Having a cushion of 10–20% of your startup budget set aside for surprises can help you stay calm and in control when life throws you a curveball.

Starting a business can feel like climbing Mount Everest, but when you break it down step-by-step, it becomes much more manageable (and way less intimidating). 

Here’s your roadmap—complete with practical advice and a few friendly nudges in the right direction. 👇

“Market research” may sound like a fancy buzzword, but it’s actually pretty simple—it just means figuring out who you’re selling to, what they need, and who else is out there doing something similar.

You’ll need to answer the following questions:

• What kind of business are you starting? Service-based? Product-based? Online? Local?
• Who are your competitors? What are they doing well? What are they charging? How do they structure their services?
• Who are your customers? Picture your ideal person. What do they need? What do they struggle with? Where do they hang out?
• What makes you different? This is your secret sauce. Maybe it’s your pricing, your personal story, or your product design—whatever it is, lean into it.

Fortunately, you don’t need any special tools to gather these insights. Google, Reddit threads, Facebook groups, customer interviews, or just casual chats with your potential audience are all it takes.

Once again, the term “business plan” sounds way more daunting than it actually is. 

You don’t need a 30-page document, complete with graphs, projections, and a 5-year plan when you’re just rolling out your new business. A solid one-pager can work just fine at the start, as long as it answers the big questions:  

• What do you do?
• Who do you serve?
• How will you make money?
• What will it cost to run the business?
• How do you plan to grow?

No matter how lean you try to start, most businesses need some money to get off the ground. Here are a few options to consider:

• Self-funding: This means using your own savings or reinvesting money from your day job to get started. It’s the most straightforward option—and you stay in full control—but it can also be stressful if money is tight.
• Friends and family: Borrowing from people you trust can be a great way to get started without interest-heavy loans or outside pressure. Just make sure everyone’s on the same page—write down terms, set clear expectations, and treat it like a business deal (because it is!).
• Small business loans: If you want to keep 100% ownership but need more capital, a loan could be the way to go. Check out options from banks or credit unions. Quick PSA—you'll likely need a solid business plan and good credit to qualify.
• Investors: Angel investors or venture capitalists can provide significant funding, but they usually want equity (aka, a piece of your business). This is great if you’re planning to scale fast, but not always ideal if you want to stay small or retain full control.
• Crowdfunding: Platforms like Kickstarter or GoFundMe are awesome for product-based businesses or mission-driven ideas. You pitch your idea to the public, set a funding goal, and offer rewards or perks for backers. It’s not guaranteed, but if you have a great story and some marketing skills, it can generate both funds and fans.

This is another big kahuna moment—the structure you choose will decide how your business is legally set up and how you’ll be taxed. Here are a few common options:

• Sole Proprietorship—Easiest to set up, but you're personally liable for, well, everything.
• LLC (Limited Liability Company)—Offers some legal protection and flexible tax options, which makes it a popular choice for small business owners.
• Corporation—More complex, but great if you’re planning to scale big or bring in investors.

Overall, we recommend you chat with a lawyer or professional accountant when making this decision, as they’ll be able to clearly walk you through the best options for your business. 

Now we’re talking! This is where your business officially becomes real. 🤩

Here’s your to-do list:

• Pick your business name. Pro tip 💡 Make sure the domain and social handles are available, too!
• Register your business with your state or country.
• Apply for an EIN (Employer Identification Number) or your local equivalent if you need one for taxes or hiring.
• Get any licenses or permits required in your area or industry.

Your business “location” could be anything from a cozy home office to a retail space downtown. But, if you’re aiming for a brick-and-mortar business, remember the number one real estate rule: location, location, location!

Consider these factors before choosing your business spot:

• Legal and tax implications—Some states or countries are more small business-friendly than others.
• Customer access—Do they need to walk in, or will they find you online?
• Costs—Think rent, utilities, zoning regulations, etc.

Even fully remote businesses still need a legal business address, so decide what makes sense for your setup.

Now’s the time to really hone in on this million-dollar question: how will you get clients?

Luckily, you don’t need a marketing degree or a huge budget to get started, you just need a strategy and a good chunk of your time and effort.

First, answer the following questions: 

• Who are you trying to reach?
• Where do they spend their time (Instagram, LinkedIn, local events)?
• How can you help them solve a problem or reach a goal?

Once you know who you’re talking to, where they’re located, and what your message is, you can start crafting compelling content. 

Here are five simple places to start:

1. Post helpful content on social media: Share tips, answer FAQs, or tell behind-the-scenes stories that show your personality and expertise.

Not sure what to post? Try using ChatGPT for small business content ideas—it’s a great way to spark new ideas.👇

2. Join online communities or local groups: Get involved in Facebook groups, Slack channels, Reddit threads, or meetups where your ideal clients already hang out.

3. Ask for referrals: Let your friends, family, and early clients know you’re open for business—they might know someone who needs exactly what you offer.

4. Start an email list: Offer a freebie (anything from a free guide to a complimentary cookie) in exchange for email addresses and start building trust through regular, helpful updates.

5. Pitch yourself: Reach out directly to potential clients or collaborators with a short, personalized message that explains who you are, what you offer, and how you can help.

You don’t need every shiny tool on the internet, but you do need the right ones to help you stay organized, look professional, and run your business smoothly.

Start by identifying what you’ll need to sell, communicate, manage, and deliver your product or service. 

Your tech stack will depend on your business type, but here are a few categories to think about:

• POS systems & payment processors: Tools like Square can act as both, but it's helpful to know the difference. POS (Point of Sale) systems help you manage in-person sales—think cash registers, card readers, and sales tracking. Payment processors like Stripe or PayPal handle the behind-the-scenes part of accepting payments online or by invoice.

• Project management tools: Stay organized with apps like Trello, Asana, or ClickUp to track to-dos, deadlines, and client work.

• Email marketing platforms: Build relationships and stay top of mind with platforms like Mailchimp, ConvertKit, or MailerLite. These help you automate emails, send newsletters, and grow your audience.

• E-commerce platforms: Selling online? Shopify, Etsy, WooCommerce, or BigCommerce can help you build a store and manage orders with ease.

• Scheduling tools & CRMs: Software like YouCanBookMe (👋) lets clients book time with you without back-and-forth emails or calls. Combine it with a CRM (Customer Relationship Management tool) like HubSpot to keep track of leads and customers. Psst…YouCanBookMe and HubSpot work super well together.

Make it easy for new clients to schedule with you

Set up your free booking page with YouCanBookMe.

This is it—the moment you've been planning for! Whether you hit “publish” on your site, open your doors, or book your first client, you’ve officially launched your small business.

Here’s one (okay, one and a half) last pro tip: don’t wait for everything to be “perfect.” Launch when it’s good enough—you can (and will) refine as you go. And make it a habit to gather feedback and reviews from clients. They’ll not only help build trust with future customers, but also show you what’s working and what could use a little fine-tuning.

Celebrate the small wins, shout about the big ones, and take a moment to be seriously proud of what you’ve built. You’ve earned it.

Your launch isn’t the finish line—it’s the starting point. Once you’re live, pay attention to what’s working (and what’s not). Ask for feedback, track your progress, and don’t be afraid to pivot. The best businesses evolve over time based on what their customers need.

And hey, if you ever feel overwhelmed, just remember: every successful business you admire started right where you are now.

Need an easier way to manage bookings and stay organized as you grow? Try YouCanBookMe for free to simplify scheduling and save time—so you can stay focused on building your business.

FAQs

How do I start my first business with no money?

If you’re wondering how to start a small business with little to no money, you’re not alone—and yes, it’s totally possible. The key is to start lean by offering a service that requires more time than upfront cash, like freelancing, consulting, virtual assistance, or tutoring. 

Focus on businesses you can run from home, where you don’t need to worry about rent or inventory. Use free tools (think Canva, Google Workspace, or social media) to market yourself, and reinvest your first few sales back into your business. Plenty of entrepreneurs have bootstrapped their way to success, starting with exactly what you have now.

Is $1,000 enough to start a business?

Yes—if you’re strategic about it. $1,000 can absolutely be enough to start a small business, especially if you’re starting online or offering a service. The key is focusing on things that require more of your time and effort than deep pockets. Think freelancing, consulting, digital products, or selling on marketplaces like Etsy. You can use your budget to cover the basics—registering your business, building a simple website, and maybe investing in the one or two tools or subscriptions you really need. Remember to start small, focus on getting your first customer, and reinvest whatever you earn. 

What is the easiest small business to start up?

The easiest small businesses to start are usually service-based, low-cost, and built around a skill or knowledge you already have. Think pet sitting, freelance writing, graphic design, social media management, or tutoring, just to name a few. Use the internet to your advantage—there are plenty of online guides (like this one on how to start a tutoring business) that will help you get set up.

Opt for businesses you can start from home, since they don’t require a physical storefront or a lot of startup money. And if you're in the "I want to start a business but have no ideas" camp, try looking at problems people often ask you for help with. Sometimes, your easiest business idea is hiding in your everyday life!