515 N Flagler Dr Ste P300, West Palm Beach FL 33401-4326
For personal assistance, call
Get Started

Stripe vs. Square: A Comparison of Online Payment Processors


Stripe vs. Square: An Overview 

Looking for a good payment processing solution for your business that caters to both retail and online sales?

When it comes down to it, there really isn’t a whole lot to choose from that cover both types of transactions. At least, the best options are leagues better than the rest. 

Which is ironic, since every ecommerce– and many other– businesses online needs one to operate.

That’s why most businesses that need a digital payment processor look to one of two big hitters: Stripe and Square.

Which is better? Where do they each excel, and which is best suited for your business? 

Below, we’ll dive into the details and cover everything from pricing to features and deliver the final verdict on which is likely a better fit for your business. 

But first, check out the 10,000-foot overview below if you want to get a quick comparison summary: 


Stripe Overview

Stripe is known as being a super developer-friendly payment processor.

It isn’t the easiest to set up if you’re new to ecommerce or digital sales in general. 

However, Stripe does offer a comprehensive set of features that allow you to do just about anything you’d want with a digital payment processor. 

Best for: Those who are a bit more tech-savvy and want more robust developer features.


Square Overview

Square is an easy-to-use digital payment processor and point-of-sale (POS) system. Meaning you can take payments at a physical store and also accept payments online using the square platform. 

If you’re not tech-savvy and need a solution that’s easy to use right out of the box, Square makes it about as easy as can be to get set up and start taking payments. 

They offer a free website with Square payment processing already built-in, simple and straightforward POS terminals as well as their Square Reader for accepting in-person payments, and other ready-made solutions. 

Best for: New or solo business owners who aren’t tech-savvy and want something simple and easy + brick and mortar businesses needing an easy to use point-of-sale system. 

Before we dive into the details, it’s worth mentioning that both Stripe and Square:

  • Offer competitive transaction fees
  • A comprehensive service that does the job it’s supposed to
  • And great customer support

No matter which you go with, both will be able to do the job if all you’re looking for is a dependable digital payment processor. 

However, each has a niche that allows them to expand beyond that central service to offer more.

With that quick summary out of the way, let’s dive into the details.

First, let’s start with pricing. 

Stripe vs. Square: Pricing

In terms of pricing, Square and Stripe couldn’t be more similar, though there are some notable areas where they differentiate that are worth noting.

Here’s the breakdown:


Stripe pricing

Both Stripe and Square are equal in terms of online credit card transaction fees at 2.9% + 30 cents per transaction.

Similarly, in-person transactions are virtually equal at 2.7% + 5 cents for Stripe and 2.6% + 10 cents for Square.

However, where Stripe differs is in ACH and recurring transactions.

Stripe charges 0.8% per ACH debit transaction, at a $5 cap, while charging just 2.9% + 30 cents per recurring transaction.

Square pricing

While similar in online credit card and in-person transactions, Square differs from Stripe in recurring and most notably ACH transactions.

Square has a higher percentage on recurring transactions, though a lower flat fee on top of it at 3.5% + 15 cents per transaction.

However, where Square stands out most is in ACH transactions, as they don’t charge a fee, unlike Stripe. 

Pricing: the verdict

All-in-all, the pricing grid for both Stripe and Square is incredibly similar.

However, if you have a large number of recurring transactions, Stripe is the marginal winner. 

Similarly, if you process a large number or size of ACH transactions, Square is the obvious choice. 

Stripe vs. Square: Features

Next, let’s dive into both Stripe and Square’s features and see where each excels (and which has the features most relevant to you).

Here’s where each stands out: 


Stripe features

While both Stripe and Square offer comparable digital payment services, when you look a little more closely, they diverge in a few key areas. 

Unmatched developer tools

When it comes to Stripe, their stand-out characteristic is their unmatched developer features.

Stripe gives developers and business owners who want (or need) to customize their payment gateway the tools to do exactly that, with things like custom checkout options and UI tools. 

This first point is the most notable differentiator for Stripe, and it’s a big one, but Square has a few other notable features aside from this. 

Such as…

24/7 Phone support

One surprising feature Stripe offers that Square doesn’t is full 24/7 phone support for all customers. 

In an age where most modern digital-focused startups seek to nudge customers with sophisticated AI chatbots to their knowledge base of common questions and answers, Stripe goes the opposite direction and offers unrivaled support to its customers in the form of (gasp) real live people. 

A diverse range of payment methods

Another place where Stripe is the clear winner is in payment methods.

Stripe has gone out of its way to offer an extensive list of payment options, from various credit cards to countless digital payment methods, ACH, and digital wallets such as Apple and Google Pay.

Square features

So, where does Square stand out from Stripe? 

Where Stripe is perfect for developers and power players who want more and diverse features to let them create things like custom checkout experiences, Square is the king of ease of use (among other things). 

Super user friendly

Where Square makes a name for itself is in how easy it is to use. 

While Stripe gives users numerous toys to play with to customize and build out, Square’s service is clearly built for the opposite: to offer the best out-of-the-box and user-friendly experience possible.

Everything from their payment gateway templates to their free and ready-made online store makes getting started a breeze for any business owner who is new to accepting digital or in-person payments, all while doing so safely and professionally.

Free POS software

To bounce off the first point, Square also makes getting started with in-person payments simple and easy.

How? By offering free point-of-sale (POS) software that is plug-and-play ready. 

This pairs nicely with the ease of setting up digital payments with Square, making for an all-in-one digital + physical payment system that can be set up within a single day. 

Did we mention their USB and full terminal devices are stylish? Definitely not your typical retail checkout terminals. 

Verdict: Stripe vs. Square– Which should you choose? 

So, which should you choose: Stripe or Square?

The question mostly comes down to two things:

  1. How tech-savvy you are, and
  2. Whether you need a point-of-sale (POS) system

If you need a digital payment processor with a POS system, Square makes getting set up to take in-person payments incredibly easy and efficient. 

If you’re in need of a dependable digital payment processor with lots of potential, especially if you are or have a developer, Stripe has the most robust features. 

Stripe is also ideal if you need to set up a way to collect recurring payments from your customers. 

However, if you’re not tech-savvy and aren’t looking to do anything custom– in other words, you just need a reliable way of accepting payments online and/or in person, and to do it easily right out-of-the-box– Square is a perfect fit.

Minority Business Loans: A Guide to Minority-Owned Business Financing Programs


Minority business loans and other unique programs exist for minority-owned businesses throughout the U.S. While many of these programs are state or community-specific, there are some large-scale programs as well. Read on to find out more. 

What are minority business loans?

According to the U.S. Census Bureau, more than 1 million businesses in the U.S. are now owned by minorities, roughly 17% of all U.S. businesses. 

In total, minority-owned businesses account for about $1.8 trillion in annual revenue and employ over 6 million workers throughout the country. 

However, despite the considerable growth in minority-owned businesses, it remains unfairly difficult for minorities to obtain traditional loans, even when comparing equal credit and other financial determinations.

Fortunately, several organizations and programs have stepped up to help bridge that gap and make it easier for minority-owned businesses to get the funding they need to build and grow. 

Minority business loans are one such umbrella of programs, which refers to any loan program specifically designed for minority-owned businesses.

In addition, later we’ll also break down some additional resources that minority-owned businesses can take advantage of to obtain funding and grow their business.

Minority business loan options

Several minority business loan options are available, from SBA loan programs to other major loan programs as well as state and local programs. 

Here are just some of the programs available to minority-owned businesses: 

minority business loans - SBA

1. SBA 8(a) Business Development Program

One of the most notable minority-based business funding programs, the SBA’s 8(a) Business Development Program was created for minority and disadvantaged businesses.

Technically not a loan program, 8(a) participants enjoy several benefits related to easier access to business funding.

Most notably, members of the 8(a) program have access to an annual pool of federal contract funds reserved for 8(a) participants. That means not only fairer qualification given the program guidelines but less competition as a whole. 

And if the idea of applying for federal contracting dollars sounds daunting (as with anything government-related, it can be painfully confusing), you get access to a specialist representative who will help you through the entire process.

So, how do you become a part of the program?

To be approved for the SBA’s 8(a) Business Development Program, you must meet these guidelines:

  • Be 51% or more owned and controlled by U.S. citizens who qualify as economically and socially disadvantaged
  • Must be involved in the day-to-day operations of the business itself
  • Have a personal net worth of less than $250,000
  • And have less than $4 in assets

Keep in mind that there are additional guidelines to qualify as an 8(a) business you’ll need to meet as well.

For all the information you need to get started with the SBA’s 8(a) Business Development Program, see here

Community Advantage Lender - Minority Business Loans

2. SBA Community Advantage loans

The second of three main programs the SBA offers to minority-owned businesses, SBA Community Advantage loans are a part of the SBA’s flagship 7(a) loan program, which is offered in conjunction with local lenders. 

The SBA Community Advantage loan program offers funding in the form of term loans to business owners in underserved markets, between $50,000 and $250,000 in funding. Interest rates typically range from 7-10%. 

To learn more about the SBA’s Community Advantage loan program, click here.

3. SBA Microloans

The third and final SBA program minority-owned businesses can take advantage of is the SBA Microloan program.

SBA Microloans are exactly what they sound like: small loans between $500 and $50,000 (with the average Microloan being $13,000).

The Microloan program is designed for new businesses that are minority, women, or veteran-owned or low-income, with roughly half of all Microloans going to minority-owned businesses each year.

Microloans have a relatively short-term repayment plan at within six years and have an average interest rate of 8-13%. 

To learn more about the SBA’s Microloan program, click here

Business Consortium Fund

4. Business Consortium Fund 

The Business Consortium Fund, or BCF, is a U.S. Department of the Treasury certified Community Development Financial Institution designed to help minority business owners in various ways.

The BCF has several programs, including its Direct Lending Program, which offers minority business owners $75,00 to $500,000 either in the form of a term loan or as a business line of credit. 

To be approved for the program, you’ll first need to get your business certified as a minority-owned business with the National Minority Supplier Development Council. 

Click here to find out more about certifying with the NMSDC or here to learn more about the BCF’s Direct Lending Program

State and local minority loan options

While several national programs exist to help minority-based businesses, programs also exist on the state and local level.

Below is a list of example state and local programs for minority-owned businesses, but take the time to research what programs might exist in your area as this list is definitely not exhaustive.

CDFI Fund - Minority Business Loan Programs

1. Community Development Financial Institution Fund

The Community Development Financial Institution Fund was established by the U.S. Department of Treasury. Through the fund, CDFI’s or Community Development Financial Institutions offer both financial and technical assistance to minority-owned businesses.

These institutions come in two forms: 

  1. The Bank Enterprise Award Program, and 
  2. Native Initiatives

The BEA Program’s mission is to facilitate investment in economically distressed communities around the country to revitalize those areas.

Native Initiatives offers monetary awards and technical training opportunities to help create jobs, build businesses, and create economic growth in Native Communities. 

As a whole, the CDFI provides affordable credit, capital, and other business and financial growth opportunities to minority and economically distressed communities nationwide.

Click here to view the CDFI’s Award Database to search for these and other CDFI organizations in your state to see what awards are available. 

Minority and Women Revolving Loan Trust Fund program

2. Minority and Women Revolving Loan Trust Fund program

The Minority and Women Revolving Loan Trust Fund program offers working capital and fixed asset loans to women and minorities in New York.

The loans range up to $35,000 for their trust fund program and $50,000 for fixed asset loans and require businesses have less than $100,000 in annual gross revenue. 

3. National African American Small Business Loan fund

The National African American Small Business Loan fund offers business loans to African American-owned businesses in several major cities throughout the U.S., including New York and Los Angeles. 

The fund also offers comprehensive business services, including marketing, business plan development, and tech assistance.

Loan amounts range from $35,000 to $250,000 and can be provided in the form of short-term loans or business lines of credit.

Do you qualify for minority business loans?

Now that we’ve covered some unique options for minority-owned businesses to obtain funding, you might be wondering: will I qualify?

The main prerequisite for most minority business loan programs is that the majority owner (51%+) must be part of a minority group.

It is possible in some rare cases that a program might require all owners to be part of a minority group, but most programs only require a single majority owner. 

Beyond that, every loan program is different, so you’ll need to check with each individual program’s qualification factors to figure out what you’ll need to qualify. 

Grants and additional resources for minority-owned businesses

In addition to the above minority business loan programs, there are several grants and additional resources for minority-owned businesses to take advantage of.

While obtaining a business loan is generally easier (both to find and obtain), grants and other similar programs are a chance at debt-free capital for your business, so they’re worth looking into.

Here are a few: 

U.S. Minority Chamber of Commerce - Minority Business Loan Programs

1. U.S. Minority Chamber of Commerce

The Minority Chamber of Commerce is a national organization supporting minority-owned businesses throughout the U. S. 

While not offering any direct grant or funding programs, the MCC is great for connecting you to existing resources, including both grants and new and existing funding programs. 

MBDA - Minority Financing Programs

2. Minority Business Development Agency (MBDA) Business Centers

MBDA business centers connect minority-owned businesses in 34 states with countless small business services.

Services include:

  • How to secure funding
  • Other financial counseling
  • And contract acquisition

Financial counseling is 1-on-1 and offers minority-owned businesses an invaluable financial overview from one of the MBDA’s own financial experts.

3. Grants.gov

A final and the best general source for finding qualifying grants is Grants.gov.

The site offers up-to-date information on more than 1,000+ grant programs throughout the U.S.

It has an easy search function with access to information on countless minority-based grant programs, such as the Minority Research Grant Program.

Make your dream business a reality

Much still must be done to bridge the divide that minority-owned businesses face in today’s business world.

However, progress has been made and there are programs and resources available to business owners who are willing to look.

Get the funding your business needs to make your dreams a reality, with the loan programs and additional resources we covered in this guide. 

Frequently asked questions

How do I get a minority business grant?

To apply for and potentially obtain most minority business grants, you must:

– Get certified as a minority-owned business
– Create your business plan
– Visit a grant directory such as Grants.gov to find a grant that matches your business
– Gather your business documents
– Apply for the grant (double-check whether there is a deadline, as most grants work on an annual limited-time application schedule)

How do I certify as a minority-owned business?

To certify as a minority-owned business, apply with the National Minority Supplier Development Council (or simply NMSDC).

The NMSDC has regional offices throughout the country where you can apply to become a recognized minority-owned business. 

The 14 Best Banks for Small Business


It might not be the first thing that comes to mind when you think about starting up your business, but choosing which bank to work with is a vital part of your daily business dealings. 

For that reason, it’s important to invest the time and energy in finding a bank that works for you and your business. 

You should consider:

  • How many monthly deposits do you make?
  • Do you need funding in the form of a business or real estate loan?
  • Are the number of available physical branches important to your business?
  • How often do you use mobile banking?

The only problem is, there are a lot of banks out there, and with all of them vying for your business, so it’s hard figuring out which one is best for you. 

That’s the purpose of this guide. 

Below, we’ll take you through each of the best banks based on a variety of factors including:

  • Number of branches
  • Fees
  • Online-only checking option
  • Monthly transactions
  • And the best credit unions

So, let’s get to it:

best banks for small business

Best for low fee checking: Bank of America

A mainstay in top small business banking lists, Bank of America is known for having high customer satisfaction ratings compared to most other major banks (with only Chase consistently beating it out).

However, one of its most notable features is its low-cost small business checking account.

Bofa business checking accounts have an $18 fee, but they offer numerous ways to avoid said fee, including:

  • $5,000 average monthly balance
  • $3,000 minimum daily balance
  • $15,000 combined average of all linked BofA accounts
  • Or, most notably: if you charge just $250 monthly to a business debit or credit card

That last one, in particular, makes it incredibly easy to avoid the monthly fee. 

Combine that with the fact that all BofA business checking accounts offer free cash deposits and free online and mobile banking, and BofA is the stand-out winner for the lowest fees for any small business checking account. 

Best for number of ATMs and branches: Wells Fargo

If a vast network of ATMs at your fingertips is important to you, Wells Fargo is a choice to consider. 

It’s worth noting that they have the lowest approval rating on average compared to any other major bank.

However, with more branches than any bank in the nation, you can’t argue with their convenience. 

Wells Fargo also offers no-fee withdrawals from its network of branches, which serves as a nice compliment. 

It’s also worth noting that their Simple Business Checking Account offers the option to avoid fees by maintaining a low minimum balance of just $500, which is far better than BofA’s $5,000 (though their $250 monthly debits is still king above that).

Like BofA, Wells Fargo also offers a wide variety of small business lending products. 

In fact, it’s the largest Small Business Administration (SBA) lender in the country, offering more SBA loans than any other major bank. 

However, it’s important to mention that you won’t get competitive rates compared to most local credit unions, which is usually the first place you should start if you’re looking for funding from a local bank. 

Best credit union: Navy Federal Credit Union

Often reported as one of the highest-rated credit unions in the country, the Navy Federal Credit Union (NFCU) was originally founded to serve the U.S. Armed Forces.

However, it now serves civilian individuals and business owners throughout the country with a variety of services.


  • Business checking
  • Savings
  • Business loans
  • Credit cards 
  • And employee benefits such as insurance and retirement 

The NFCU is known for its stellar customer service record, above and beyond even the average credit union, but that’s only a part of why they’re on this list. 

What makes credit unions in general so notable is that, partly because they’re not-for-profit entities, interest rates and fees tend to be lower. 

And that’s the case for the NFCU, who offer everything from term loans to business lines of credit at affordable rates.

The only drawback is that you need to be a member first to take advantage of any of their offerings (typical for all credit unions).

Also, to become a business member, you must first become a personal member first then apply to become a business member (along with a $100 opening deposit). 

However, all things considered, the benefits you get far outweigh the drawbacks. 

Best digital (online-only) checking: Azlo

Countless new digital banking options have sprouted up over the years, but few have reached the heights of online bank Azlo

Born from the digital boom that saw freelance and entrepreneurialism explode online, digital or online-only banking offers a convenient option for solo business owners to manage their banking online without ever having to step into a physical branch. 

Best banks for small business

Azlo, in particular, stands apart from other online banking options for one big reason: there are little to no fees.

With Azlo’s small business checking account, there no fees for:

  • ATM use
  • Domestic and international wire transfers
  • ACH transfers

They also offer mobile check depositing and minimum balance or basic checking fee.

Overall, their lack of extensive and confusing fees makes Azlo refreshingly transparent when compared to the average major bank. 

best banks for small business

Best for high monthly transactions: Capital One

If you tend to pull a high number of monthly transactions, Capital One is a great option. 

Some banks will often either put a restriction on your number of transactions or add unnecessary fees that make those frequent transactions more of a challenge (or at the very least, eat into your bottom line).

Capital One’s small business checking account options, on the other hand, have no such cap. 

Their Spark Business Basic Checking account offers:

  • Unlimited monthly transactions
  • No fee on deposits up to $5,000
  • $15 service fee that’s easily avoidable, either by having three or more Capital One products or by maintaining an average balance of $2,000 over either a 30 or 90-day period

With a Spark business account, you also get access to a collection of financial management tools that can help you better manage your business’s cash flow. 

All of that combined makes Capital One’s business checking options a great fit for any small business owner, especially if you make frequent transactions and/or high-value deposits.

best banks for small business

Best overall: Chase Bank

Consistently rated highest in customer satisfaction, Chase Bank stands atop the collective.


Besides customer service, there’s no one thing that sticks out about Chase compared to other major banks such as Wells Fargo and BofA. 

It’s a collection of several different factors that, taken together, that help it securely take its spot at the top. 

According to Consumer Reports:

“Banking surveys, such as one from J.D. Power, also shows that many consumers appreciated Chase’s ATM and branch network, and mobile and online services, as well as the quality, clarity, and relevance on the advice provided about financial products it offers.”

One of the more notable features of Chase’s business checking is that it offers no checking fees if you maintain a balance of just $1,500, low relative to competitors such as BofA’s $5,000. 

Not to mention, Chase’s mobile banking app and mobile check deposit functionality are both highly rated (which says a lot considering most major bank’s mobile apps, including BofA’s, are ridden with issues).

Another notable mention is Chase’s Ink Business credit card, which has a great rewards program and a consistently high rating.

That’s not to mention the transparent presentation of Chase’s credit products themselves, which makes shopping for a business credit card if you bank with Chase an all-around pleasant experience. 

Add on top of that the fact that with 16,000 combined branches and ATMs, Chase has one of the largest networks nationwide, and you’ve got the overall best bank in the country for small business. 

Best banks by state

While the above are the best overall banks for small businesses throughout the country, we couldn’t end this list without giving you a list of the best banks by state.

The reality is, while the list above gives you a general idea of which banks are best to go to for certain features and aspects of small business banking, the best offerings vary wildly by state.

And they’re local credit unions, not big banks.

So, without further ado, here are some of the best banks by state:

Best in Maryland, West Virginia, and Pennsylvania: First Peoples Community Credit Union

Founded in 1959 under the Amcell Corporation, First People’s Community Credit Union currently serves over 30,000 members in and around the Maryland area as well as parts of Pennsylvania and West Virginia.

FPC is best known for its convenient digital and local branch services, a rare combination for a local credit union. 

Best in Minnesota and Illinois: BCU Credit Union

Originally founded to serve Baxter Healthcare more than forty years ago, BCU Credit Union was recently rated as one of the most loved banks in both the Minnesota and Illinois area. 

Best in Massachusetts and New Hampshire: Digital Federal Credit Union

Founded in 1979, Digital Federal Credit Union or DCU started out serving the New England area then branched off to the greater Massachusetts as well as the New Hampshire area. 

Many customers cite their reliable customer service, with the only drawback being slightly lower interest rates on accounts compared to similar credit unions. 

Best in Utah and Idaho: Mountain America Credit Union

Known partly for their mortgage program and high customer service rating, Mountain America Credit Union (or MACU) was recently rated the bank in Utah as well as in the top five in Idaho. 

Best in Texas and Colorado: Security Service Federal Credit Union

Known for its low rates and good auto loans, Security Service Federal Credit Union was recently ranked as one of the top banks in both Colorado and Texas. 

Best in Wisconsin, Kentucky, and Michigan: Huntington Bank

Huntington has long been a favorite throughout Columbus, Ohio. However, it’s now expanded far beyond its roots and become a top-rated bank in:

  • Ohio
  • Kentucky,
  • Wisconsin
  • Michigan 
  • Pennsylvania

In fact, no other bank in the country is rated number one in more than one state, something that Huntington has accomplished and then some. 

A unique feature of Huntington compared to most local banks is that it’s investing heavily in AI tech, including updates to its app that will notify its customers when their spending increases and isn’t likely to cover their future balance.

Best in Virginia, Louisiana, and Delaware: Capital One

Finally, major bank Capital One is one of the only major financial institutions to be rated highly in multiple states, even compared to credit unions.

It was ranked among the best banks in:

  • Virginia
  • Louisiana
  • Delaware
  • Maryland
  • And Washington, D.C. 

Capital One is particularly strong when it comes to digital resources, boasting one of the highest-rated apps among major banks, and offering a great digital-only banking service.

The best bank for small business is the bank that serves you

You have a lot to choose from when it comes to picking a bank for your small business.

It might feel a bit overwhelming having to look through countless features, options, and resources just to decide which bank to go with.

However, the bank you choose to work with plays an important role in the daily operation of your business, so it’s an important choice you need to invest some time and energy into. 

How to Start a Business: The Complete Guide to Starting a Business

Learning how to start a business is a lot like learning a new language:

At first, everything feels foreign and new.

After a while, though, you start to get the hang of it. It starts to be comprehensible.

The only problem?

When that starts to become comprehensible to you depends entirely on your own work ethic.

You could get there sooner, learning the right steps to take in advance and being smart about each next stage and decision that can move your business forward.

Or, you could get there later, making costly mistakes that cause you to be set back.

Or, worse, cause the business to go under for good.

Business isn’t a race. It’s a marathon, and the better you are at collecting information, considering your options and validating your actions the better results you’ll get. 

To that end, this guide is intended to help you get the information you need to start your business the smart way.

We’ll cover:

  1. Step 1: Do market research
  2. Step 2: Write your business plan
  3. Step 3: Choose your business’s structure
  4. Step 4: Register your business
  5. Step 5: Obtain business documents
  6. Step 6: Get small business funding
  7. Step 7: Open a business bank account
  8. Step 8: Create your marketing plan

Let’s start with step 1, the most important step to take before starting your business. 

Step 1: Do market research

Before officially starting your business, it’s important to understand something we touched on a moment ago:

Validation is key to business success. 

Many business owners make the mistake of thinking they can simply act on a business idea and it will work out.

But there are a few things you need to consider first before you should jump.

That includes:

  1. What problem does my product/service solve? 
  2. Are people looking for a solution to the problem?
  3. Would they pay for my solution? And how much

Another point to consider is whether to do the same thing better or strike out and do something new.

There are valid arguments both ways, but ultimately, you have to choose either to:

  1. Do what other businesses have done before, but different
  2. OR do something entirely different (typically by identifying a need that doesn’t yet offer a solution)

The difference might seem inconsequential right now, but it could make a big difference later as you work to gain traction for your product or service.

Doing something proven to work, just a bit differently, requires less skill and knowledge of business and marketing in general. 

Launching a business with a totally unique product or service has a sharper potential growth curve, with a much higher risk and chance of failure. 

Step 2: Write your business plan

A business plan can be 1-page or ten pages, it mostly depends on how extensive you want it to be (and why you’re crafting it).

A business plan is important because it helps establish a gameplan for your business.

  • What kind of product or service do you offer? 
  • Who is your target customer? 
  • You competitors?
  • What is your financial strategy?
  • And your marketing strategy? 
  • Also, what is your unique selling proposition (USP)?

These are all questions you should have an answer to before you officially “open your doors” because they determine your success. 

Not creating a thorough business plan is one of the single greatest mistakes of a large percentage of business owners. 

And, sure, you can just figure it out along the way.

The problem is, that’s a costly mindset that will bite you eventually.

Instead, take some time to craft a good business plan so that those critical details are made clear before pulling the trigger and investing your time and money.

To learn more about crafting an effective business plan, read: How to Write a Business Plan: A Step-by-Step Guide.

Step 3: Choose your business’s structure

Choosing a business structure is one of the more technical steps you’ll need to take in starting up your business.

However, it’s vitally important that you do the proper amount of research here.

That’s because the business structure you choose can affect things like your:

  • Business tax strategy
  • Structure
  • Operating costs
  • Liability protection
  • And more

Pick the wrong business structure and you could end up costing yourself a good chunk of change, or worse. 

There are 5 basic types of business entities in the U.S.:

1. Sole proprietorship

The most basic business structure, a sole proprietorship is what most business owners start as.

That’s because it’s designed for a sole employee (you) operating the business in its entirety, the way most businesses start out.

It’s important to mention that you have no liability protection as a sole proprietor, which may or may not be important for your industry and product or service.

If that’s the case, you’ll probably want to consider starting out as an LLC.

2. Partnership

A partnership is very similar to a sole proprietorship, except the business has more than one owner.

Those owners don’t necessarily need to have equal responsibility or ownership, but you’re likely a partnership if you’re starting your business with a partner.

A partnership also offers no liability protection. 

3. C-Corporation

A C-corp is what most people think of when they hear the word “corporation”.

When a C-corp is taxed, it gets hit twice: once at the corp level and another at the individual level.

However, it does have its benefits, particularly for very large companies, such as making it easier to generate investment capital. 

4. C-Corporation

A popular business structure for larger businesses, an S-corp is a “pass-through entity”, meaning it bypasses taxation at the corporate level.

Unlike C-corps, where you’re taxed twice, with S-corps you’re only taxed once, at the individual (owner) level. 

This has made S-corps a popular structure for many larger businesses where the owner still wants to maintain control of its taxation. 

5. Limited Liability Corporation (LLC)

An LLC combines aspects of the corporation, namely the liability and some of the tax savings, with the flexibility of a sole proprietorship.

With an LLC you get, as it says, limited liability protection. It’s not quite what you get as a full corporation, but depending on your type of business, it might be all you need.

Along with a sole proprietorship, this has quickly become one of the most popular “starter” structures available for new business owners.

That’s because it’s typically best to start as this or a sole proprietor and then shift to a full corporation later as your business grows (something an LLC makes even easier than a sole proprietorship). 

Step 4: Register your business

Once you’ve decided what your business structure will be, it’s time to register your business

That involves a couple of different steps:

1. Register your business name

If you’re opening either a sole proprietorship or partnership, and you won’t be using your legal name, you’ll need to register a DBA, or “doing business as”.

The best way to do that is to contact your local state center or use an online filing service, in which case you’ll typically have to wait about 30 days for everything to be completed. 

2. Get a tax ID

The SSN of businesses, a tax ID or EIN (employer identification number) is an important form of identification that most business entities need.

The only exception is a sole proprietorship or LLC without any employees, which don’t require a tax ID so long as you’re the only member of the company. 

3. Register local taxes

This final step isn’t required for everyone, but in most states, you’ll need to register your business for taxation due to things like unemployment insurance and workers’ compensation. 

In some states, additional steps are required on top of this. 

Because every state is different, it’s important to find out what requirements you’re responsible for. 

To that end, use this guide from the USA.gov to find out what your state-specific requirements are. 

Step 5: Obtain business documents

Once you’ve submitted all your business registration requests, it’s waiting time!

Jokes aside, you don’t have to wait around and do nothing during this time.

In fact, you still have work to do. Namely, documents to submit.

For the most part this really just comes down to getting a business license.

1. Get a business license

Why do you need a business license

In short, a business license is like a driver’s license, just without the test. You need one to operate a business– simple as it gets.

Keep in mind that, depending on your region/state and type of business/offerings (such as if you offer food and/or alcohol), you might also need additional licenses to operate. 

Check with your local state offices (found easily by typing “[state] business license filing” into Google), to be sure what’s required of you.

2. Obtain patents and similar documents

Also make sure at this point to take care of any patents, trademarks, or copyrights you need to apply for.

While this doesn’t apply to everyone, if it does apply to you, it’s important to start on the process now.

Reason being: it can take months or even years to get final approval (which is why you see “patent pending” or “registered trademark” so often).

Step 6: Get small business funding 

How much does it cost to start a business? 

Every business is different, from a startup with billion-dollar dreams to a sole proprietor just looking to build a business that gets them freedom.

But all small businesses need funding.

How much it costs for you to start up your business could be anywhere from a few hundred to tens of thousands of dollars. It all depends on what you need to get started. 

Funding is an essential ingredient of business success and a step that keeps many businesses from ever getting off the ground. 

Whether it’s marketing, business registration, to payroll, you need to have the cash flow to run a business.

The challenge, in the beginning, is getting the money you need to launch before you have that cash flow. 

There are a few ways you can go about it, depending on your available resources:

1. Borrow from friends and family

The first and simplest (and oldest) way to go about it is to just borrow from friends and family. 

If you’re lucky enough to have a relative that believes in you and your business idea and wants to fund it, you could go that route.

2. Use credit cards

Another common option, you could tap into your available credit to fund your business.

This is particularly effective if you don’t need much to get started.

Some types of businesses online nowadays only require the cost of a website, some marketing tools, and maybe a bit of initial funding for ads to get started (if that).

However, if you need a large sum of cash, you could be running a huge risk by inadvertently affecting your credit. 

3. Venture capital

The go-to option for Silicon Valley startups, venture capital involves obtaining cash from an investor.

This can be time-consuming but offers a huge potential payoff, so if you’re in need of a large quantity of cash and you don’t mind answering to investors, this is a good way to go.

4. Use a personal loan 

If you have good credit and can get a personal loan, you could also apply for one use that to start your business up as well. 

This is a decent option if, again, you don’t need much funding but your needs are greater than what you could get out of your credit cards or from friends and family. 

The only thing to watch out for is the effect it could have on your personal credit if things go south.

Then you won’t only have to pay back the loan, but your personal credit could get shot in the process. 

5. Get a startup business loan

Another option is to get a startup business loan, a loan designed for new businesses that need funding to start their business. 

If you don’t like the idea of getting a personal loan, or you need more funding than you could get personally, this is another potential option to consider. 

Step 7: Open a business bank account

An often-overlooked step in the early stages of any business, a business bank account is an essential element of any well-run business in terms of basic financial organization.

That’s because many businesses start out as sole proprietors. As they grow, they might become an LLC but continue to operate like they’re an individual.

That’s a big mistake as it starts to muddy your personal and business financials, which isn’t just bad accounting but can get you in trouble with the IRS. 

That’s because you don’t just want your finances separate, you’re required by law to do so. 

Choosing a business checking account is important for other reasons as well.

After all, it’s where your cash flow will pass in and out of. You want to know that you’ve chosen a bank, and an account, that provides you with what you need to operate smoothly.


  • Which bank you’re choosing (if you’re happy with your bank, going with a business checking option of theirs might be most convenient, but still shop around)
  • Account features
  • Number of physical locations and ATMs
  • Digital banking and app ease of use
  • And other factors 

For more on choosing a business checking account, read our guide: Top 7 Best Small Business Checking Accounts.

Step 8: Create your marketing plan

The eighth and final step, this is something that many business owners are unaware of when they first get started.

It’s easy to get excited about registering your business, choosing a name, and building your first website.

However, once all that is done, it’s time to get to work. 

That’s when marketing comes in.

If you don’t have any customers, you’re out of business.

And how do you get customers? Marketing.

So, what should include in your marketing plan and what do you need to craft it?

Here’s a quick rundown:

1. Where are your customers?

You need to know where your customers are located, whether that means where they physically hang out or what websites they visit in the digital world. 

Knowing this allows you to collect vital information you can use to market to them later.

2. What kind of challenges do your customers face?

Like this information.

Knowing your customer’s main challenges as they relate to your product and the problem it fixes will tell you how to angle your marketing in a way that your customers will respond to. 

3. What are your most effective marketing channels?

This is something that you might require a little testing first to find out.

However, it’s essential as not every marketing channel will be equal in terms of your product (and what works for one company/product might not work for you).

Both before and as you market, you should be keeping an eye out on which marketing channels convert the best for you and your product.

Once you find that out, you can ease off of channels that aren’t converting well and double down on those that are.

4. Free vs. paid marketing

No form of marketing is free per se. 

However, while you always need to pay for the time it takes to create marketing material, some forms of marketing have additional costs to run the said advertisement. 

In the digital world, where marketing and advertising is now king, that typically comes down to content marketing vs. paid advertising. 

It’s important to consider how much money you’re willing to invest in marketing, but also how much of each of these types of marketing you’re investing in.

One important factor that could influence your decision is understanding the “return curve” on different forms of marketing.

With content marketing, which typically comes in the form of blogging, publishing videos on YouTube, and social media marketing, you’re investing manpower up front for a long-term result.

However, that result tends to have a much higher long-term ROI and offers a much more long-term return, one which once built requires a low time and monetary investment.

Paid advertising is fast– lightning-fast, in fact, about as fast as you can pay for and produce an ad that converts– but it’s also much more expensive and leaves you susceptible to the constantly changing guidelines of those advertising platforms (such as Facebook).

Another drawback to look out for with regards to paid advertising is that it’s easy to become dependent upon it. 

Why is that bad? Because, eventually, every ad stops working and you have to iterate. The problem is the next ad might not convert as well, which means your entire source of leads is depends on your ad conversion rate, instead of a consistent flow of leads through content marketing.

Again, though, content marketing takes time to build (6+ months, often 1-2 years before seeing decent results). So, keep that in mind. 

Start your business the smart way

Many business owners start their businesses without much more than an idea and figure it out along the way.

And while that can work out fine, it’s not the smartest way to go about it and could contribute to an early closure.

Instead, you’ve taken the time to learn what you need to get started right, which will give you the greatest chance of success.

So move forward knowing you’ve taken a step in the right direction and let your business grow.

As they say, the sky is the limit.