How to start a business: eight steps from idea to first invoice

Most people who start a business begin with registration, because a registration number feels like the real start. But if you register before your idea is tested, your legal structure chosen and your name checked, you end up undoing things: a new name, a switch to a company, a plan that rests on the wrong price.

Many take the step, fewer last. About 3.5 million new enterprises were born in the EU in 2024 (source: Eurostat, October 2026). Of US private-sector establishments opened in the year to March 2020, 51.4% were still operating five years later (source: US Bureau of Labor Statistics, December 2025). A meta-analysis by Brinckmann, Grichnik and Kapsa found that planning improves the performance of small firms, with an effect that depends on context such as how new the firm is. They argue for planning and learning together, and this guide works that way: each step produces a result, and what you learn may change an earlier step.

How to start a business: the eight steps

Each step links to its own article. The result matters more than the name: without it, the next step stands on sand.

1. 01

   Test your idea

   Check demand, who your customers are and what your industry earns, and talk to customers before you build or buy. Result: a tested idea, or the insight that another idea is better.

2. 02

   Write a business plan

   Work out customers, offer, price, marketing and organisation, closing with a financial plan. Result: a plan you steer by and a lender can assess.

3. 03

   Choose a legal structure

   Weigh sole proprietorship, partnership and limited company against your risk, expected profit and partners. Result: a structure that fits your risk and ambition.

4. 04

   Business name and licences

   Check that your name is free as a business name, trademark and domain, and which licences you need. Result: a name you may use and a list of permits.

5. 05

   Register your business

   Register with the business register and tax authority of your country; a company is formed first, sometimes through a notary. Result: a registration number and tax identifiers.

6. 06

   Tax and bookkeeping

   Open a business account, choose bookkeeping software, diarise sales tax deadlines and reserve income tax. Result: records that are right from day one.

7. 07

   Insurance

   Decide which risks you cannot carry, such as liability claims or loss of income through illness. Result: for each risk a choice to insure, carry or reduce it.

8. 08

   Funding and grants

   Work out what you need until revenue picks up, and choose savings, a bank, a microlender, family or a public scheme. Result: funding that covers the plan, with a buffer.

Why this order works

• Test first, then write: a plan on unchecked assumptions looks convincing and is still wrong. Customer conversations give you the prices and volumes for the plan.
• Structure and name before registration: you record both when you register. Moving from sole proprietor to company later usually means forming and registering a new entity.
• Funding comes last: only when investments, costs and revenue are on paper do you know how much you need, and that financial plan is what a lender assesses.

In practice steps overlap, for example an insurance quote while you write the plan. That is fine, as long as you update earlier results.

Small start or larger start

Most new businesses start small: in the EU, 83.4% of new businesses in 2023 consisted solely of self-employed people (source: Eurostat, June 2026). A freelancer takes the same steps as a founder with premises and staff; only the weight differs.

Five pitfalls when you start a business

• Registering as step one: it is quick, but says nothing about whether your idea works.
• A name nobody checked: a name too close to a competitor's can lead to a dispute, usually once the logo is on the van.
• Revenue based on hope: a forecast never tested against customers or industry figures is the weakest part of many plans.
• No money set aside for tax: the bill for year one often arrives later, sometimes with advance payments; in the UK each payment on account is half of last year's tax (source: GOV.UK, October 2026).
• Funding without a buffer: customers pay late and the first months rarely go to plan.

After step eight: the first year

Once you trade, a rhythm of tax returns, invoices and sales begins. The first year sets out deadlines and choices, and money, pricing and income shows how to match your price with the income you need. Every other topic for founders is in Start a business.