If you’re launching a business that’s meant to scale, whether through multiple locations, employees, funding rounds, or digital platforms, it’s critical to get your foundation right from day one. In the U.S., starting a business is relatively straightforward, but staying compliant, fundable, and operationally efficient requires more than just registering a name. Here’s a checklist of high-impact steps every growth-oriented entrepreneur should take when launching a business and why each one matters.

 

Define your business structure

One of your first decisions will be determining your business’s structure, which affects ownership, tax status, and liability. The most common structures are:

• Sole proprietorship, which is a business owned by one person, typical for self-employed professionals or freelancers. There’s generally no formal registration required at the federal level but check for any licensing requirements. You report income on your personal tax return, and profits are taxed at your individual tax rate.
• LLC (Limited Liability Company) which offers personal liability protection and flexible tax treatment. Great for service businesses, consultants, and companies planning to add partners or staff.
• S Corporation avoids double taxation (profits pass through to shareholders) and may reduce self-employment tax liability. Often used by established small businesses with stable profits and payrolls.
• C Corporations are best suited for startups planning to raise venture capital, offer stock options, or scale nationally. Profits are taxed at the corporate level and again if distributed as dividends.
• Partnerships for firms with multiple owners

Talk to an attorney or CPA about where your business is going, not just where it’s starting. Many businesses start as LLCs and later convert to C-Corps as they grow.

The SBA website provides details on different business structures.

 

Register for an Employer Identification Number (EIN)

Regardless of your structure, you’ll need an EIN if you have employees or operate as a corporation or partnership. Sole proprietors can use their Social Security Number (SSN) unless an EIN is required for other purposes, like opening a business bank account. You can apply for an EIN on the IRS website. There is a list of all Colorado state specific requirements on the IRS site here.

 

File a tax return

Every business must pay income tax on its net profit, which is calculated as total income, minus expenses. Different tax rates apply based on your business structure. Sole proprietors and partnerships report income on their personal tax returns, while corporations and some LLCs file separately. Working with an accountant is recommended to ensure accurate filing and to understand which business expenses are deductible.

 

Keep business records for at least 7 years

Accurate records help track your income and expenses, providing essential documentation in case of an IRS audit. This includes invoices, receipts, payroll records, and bank statements. Using accounting software like QuickBooks, FreshBooks, or Xero can simplify recordkeeping.

 

Register for sales tax if required

In the US, each state sets its own sales tax requirements. If your business sells goods or certain services, you may need to collect sales tax and remit it to the state.Registration requirements vary by state, so check with the Colorado State business pages for specific guidelines.

 

Register as an employer if you have employees

If you plan to hire employees or pay yourself as a salaried worker, you’ll need to register with federal and state agencies as an employer. This involves setting up payroll to manage employee income tax, Social Security, and Medicare withholdings, and paying federal and state unemployment taxes.

 

Withhold employee taxes and submit to IRS

Employers are required to withhold federal and, in some cases, state taxes from employees’ paychecks, including Social Security and Medicare taxes. As an employer, you’re responsible for depositing these withholdings with the IRS and filing quarterly payroll tax reports. For more information, consult the IRS Employer’s Tax Guide (Publication 15).

 

Obtain necessary permits and licenses

Licensing varies by industry and locality. You may need a city or county business license, zoning or home occupation permits, health department approvals (for food or wellness businesses) and professional certifications (for trades, legal, financial, or medical services)

Check with the Colorado State Department of Regulatory Agencies or the SBA’s online guide to determine the permits your business may need.

 

Open a business bank account

Separate business and personal finances by setting up a business account. Talk to us about the business packages we offer.

 

Consider business insurance

Depending on your business type, you may need insurance, such as general liability, professional liability, property insurance, or workers’ compensation. Some types of coverage are essential for certain industries, while others, like cyber insurance, may be beneficial depending on your business operations. We can help you determine what your business will need.

 

Select a business name

Choose a name that reflects your business and check for availability to make sure it’s not in use by another business in your state. Use the US Patent and Trademark Office’s online search tool to check for trademark conflicts. Use the Colorado State name availability search tool to determine if your proposed name is available.

 

Next steps

• Make a checklist of tasks specific to your business and consult a professional to make sure you’re fully compliant with federal, state, and local requirements.
• Talk to us about opening dedicated business account. Keeping personal and business finances separate will make accounting easier and help with tax compliance. We can also advise you on credit options, business insurance, and tools to streamline your finances.
• Consider setting up accounting software, such as Xero or MYOB, to manage invoicing, expenses, and taxes more efficiently. These tools can simplify your bookkeeping, save time, and reduce errors, giving you a clearer picture of your business’s financial health.
• Think ahead about your goals for business expansion, staffing, or potential funding needs. Understanding your growth roadmap early on will help you prepare for the next steps, like hiring employees, obtaining insurance, and managing additional compliance requirements.
• Use the Colorado State e-learning tool to get started.

It's important to keep these Must's in mind. Going into business for yourself can be very rewarding, but you must make sure all your boxes are ticked.