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How to start a business: the steps and what each costs
Starting a business takes seven steps: pick a structure, choose a name, file with the state, name a registered agent, get an EIN, add licenses and permits, and keep it in good standing. Only some of them cost money, and the state filing is the main one-time cost.
1. Pick a structure
The main options are a sole proprietorship, a general partnership, a limited liability company (LLC), a corporation and a nonprofit. A sole proprietorship or general partnership needs no state filing to exist, though it may need a business name registration. An LLC, corporation or nonprofit is created by a filing with the state. The structure sets which filings and yearly costs apply, so it comes first.
2. Choose a name
Search your state's business name database to see whether the name is available. If you will operate under a name other than your own legal name, many states ask you to register it as an assumed or fictitious name. Cost is a small fee in most states and is listed on each state page where the state charges it.
3. File with the state
An LLC files articles of organization and a corporation files articles of incorporation, usually with the Secretary of State. This is the main one-time state cost. State filing fees for an LLC run from about $35 to about $500 depending on the state. See every state ranked by cost or open your state's page for the line-by-line fees, each linked to the state's own page.
4. Name a registered agent
An LLC or corporation must list a registered agent: a person or company with a physical address in the state who receives legal and tax mail for the business. You can serve as your own agent in most states. Paid agents charge a yearly fee. Business tools lists registered agent services.
5. Get an EIN
The IRS issues an Employer Identification Number, used to open a business bank account, hire employees and file federal taxes. Applying on the IRS website is free.
6. Add licenses and permits
Cities, counties and some industries require their own licenses and permits. They are set locally, so they are not included in the state totals on this site. Check with your city or county clerk and your state licensing office.
7. Keep it in good standing
Most states require an annual or biennial report, and many add a yearly fee or a minimum tax. A few states charge both. Missing a deadline can add penalties or end the business's legal standing. The yearly figure on each state page covers these recurring state costs; the calculator adds them up over one, three or five years.
What it costs altogether
The total depends on the state and the structure: the one-time state filing, the yearly state fees and taxes, and any registered agent or local licenses on top. Pick your state in the calculator for the full number, or compare all states on the rank page.