How to Open a Business: The Complete Checklist for First-Time Owners
Most new business owners underestimate the number of steps between "I have an idea" and "we're open for business." The typical startup journey involves 100-150 distinct tasks spread across 12-18 months, from initial legal formation through grand opening. Missing a single critical step can delay your opening by weeks, cost thousands in rushed expediting fees, or create compliance issues that threaten your business before it starts.
The cost of disorganization is measurable. Late permitting discoveries push back lease commencement and trigger unnecessary rent payments on facilities you cannot occupy. Delayed equipment orders extend construction timelines and burn through working capital. Missing licensing requirements blocks final inspections and prevents your Certificate of Occupancy from issuing.
This checklist covers all 12 stages of opening a business, from business formation through post-opening operations. Whether you are opening a restaurant, retail store, salon, or service business, these stages apply universally, though specific requirements vary by industry and location.
BizPlanStudio provides industry-customized Opening Checklists as part of our complete Business Systems. These checklists include specific costs, vendor contacts, timelines, and regulatory requirements for your exact business type and location. This guide provides the framework. Your industry-specific checklist provides the implementation details.
Stage 1: Business Formation and Legal Setup
Before spending money on equipment, inventory, or deposits, establish your business legally. This foundation unlocks every subsequent step: opening bank accounts, signing leases, applying for licenses, and hiring employees.
Form Your Business Entity: Choose and register your legal structure. Most small businesses form as Limited Liability Companies (LLCs) for liability protection without the complexity of corporate formalities. Register with your state's Secretary of State office. Filing fees range from $50 to $500 depending on state. Processing times vary from same-day (expedited) to 2-4 weeks (standard).
Obtain Federal Employer Identification Number (EIN): Apply free at IRS.gov. The EIN functions as your business's Social Security number and is required to open business bank accounts, hire employees, and file taxes. Approval is immediate for online applications.
Register for State Taxes: Register with your state revenue department for sales tax collection, employer withholding, and unemployment insurance. Requirements vary significantly by state. This step is often overlooked and discovered only when attempting to obtain business licenses.
Open Business Bank Account: Separate business and personal finances from day one. Banks require your EIN, formation documents (Articles of Organization or Incorporation), and often an Operating Agreement or Corporate Bylaws. Bring these documents to your first bank meeting.
Check Industry-Specific Licensing: Some industries require professional licenses before you can form a business or sign a lease. Check state licensing boards for cosmetology, contracting, healthcare, food service, or other regulated professions. Obtain required licenses before proceeding with site selection.
Stage 2: Market Validation
Validate demand before committing capital. Many entrepreneurs skip validation, assuming demand exists, and discover post-opening that their assumptions were wrong.
Analyze Competitor Capacity and Demand Signals: Call competitors to check wait times, booking availability, or membership capacity. Restaurants with consistent waitlists, salons booking 3-4 weeks out, or gyms with membership waitlists signal undersupplied markets. Document these findings for your business plan.
Confirm Pricing Viability: Research what customers actually pay in your market, not what you hope to charge. Check competitor pricing across service tiers, analyze online reviews that mention price, and understand which price points drive volume versus which trigger price resistance.
Survey Potential Customers (Optional but Valuable): If feasible, survey 20-50 target customers about their needs, preferences, and willingness to pay. This primary research strengthens your business plan and provides data for lender presentations. Budget $200-$800 for survey incentives or online survey platforms.
Monitor New Competition Pipeline: Search local building permits and commercial real estate listings for new competitors entering your market. Franchise expansion announcements, new construction permits for competitor businesses, and commercial lease activity all signal changing supply dynamics.
Stage 3: Create Your Business Plan and Secure Funding
Your business plan serves two purposes: clarifying your strategy and securing financing. An SBA-ready business plan follows a specific 9-section format that lenders require.
Develop Your Business Plan: Include executive summary, company description, market analysis, organization and management, products/services, marketing strategy, financial projections, and funding request. The financial section is where most plans fail. You need realistic revenue projections based on documented assumptions, detailed expense estimates, and 24-month cash flow projections showing how you will cover costs during ramp-up.
Calculate Your Debt Service Coverage Ratio (DSCR): Lenders require DSCR of 1.25 or higher, meaning your business generates $1.25 in net operating income for every $1.00 in loan payments. If your numbers do not support this ratio, adjust your funding request, increase revenue projections (with supporting evidence), or reduce expenses.
Prepare Personal Financial Statement: Document your net worth, assets, liabilities, and credit history. Gather three years of personal tax returns. Check your credit score. Most SBA lenders require personal credit scores of 680 or higher. If your score is below 680, address credit issues before applying or expect more stringent terms.
Select 2-3 Lenders and Apply Simultaneously: Not all banks make SBA loans. Search the SBA's lender database for approved lenders in your area. Apply to multiple lenders to compare terms and improve approval odds. SBA Preferred Lender Program (PLP) banks can approve loans faster because they have delegated authority.
Typical SBA Loan Timeline: Expect 30-90 days from application to funding for SBA 7(a) loans. Plan accordingly. Starting the loan process early (before selecting a site) allows you to move quickly when you find the right location.
Stage 4: Site Selection and Lease Negotiation
Location drives success for most businesses. Site selection mistakes cost months of lost revenue and thousands in unnecessary rent.
Define Property Requirements: Document your hard requirements: minimum square footage, parking spaces (critical for retail and service businesses), ceiling height (important for restaurants and some retail), zoning classification, and visibility requirements. Screen properties against this list before investing time in tours or analysis.
Verify Zoning Before Lease Commitment: Call your local zoning office or planning department to confirm that your business type is permitted at the specific address. Zoning classification alone is not enough. Some zoning codes have use restrictions that are not obvious from the classification name. Get written confirmation if possible.
Conduct Saturday Site Visits: Visit finalist properties on Saturday between 10am and 2pm. Observe actual customer traffic, parking availability during peak hours, neighboring tenant activity, and access patterns. Drive the route your customers will take.
Negotiate Critical Lease Terms: Beyond base rent, negotiate Tenant Improvement (TI) allowance ($20-$40 per square foot is common for commercial retail), free rent during construction (2-4 months depending on build-out scope), rent escalation caps (3% annual increases versus uncapped), and Common Area Maintenance (CAM) increase caps. These terms dramatically affect total occupancy cost.
Include Lease Contingencies: Insert contingencies for zoning approval, permit approval, and financing approval. These clauses allow you to exit the lease without penalty if critical requirements cannot be met. Have a commercial real estate attorney review your lease before signing. Legal review costs $500-$1,500 and prevents costly mistakes.
Stage 5: Design, Permitting, and Build-Out
Construction represents the longest timeline item in most opening checklists. Allow 4-8 months for design, permitting, and build-out for most commercial spaces.
Engage Architect or Designer: Hire professionals experienced with commercial projects in your industry. Plans must show layout, electrical, plumbing, HVAC, and ADA compliance. Budget $2,000-$15,000 for design depending on project complexity.
Finalize Floor Plan: Document every functional area: customer-facing spaces, back-of-house operations, storage, restrooms, and building code requirements (egress, ADA access). Optimize layout for customer flow and operational efficiency, not just aesthetics.
Apply for Building Permits: Submit plans to your local building department. Typical review time is 2-4 weeks, though complex projects can take 6-8 weeks. Incomplete submissions restart the clock, so ensure plans address all code requirements before submitting.
Select General Contractor: Obtain three or more bids. Verify contractor licensing and insurance. Check references from recent projects similar to yours. Negotiate payment schedule tied to completion milestones, not calendar dates. Hold 10% retainage until punch list completion.
Construction Phase: Rough work (framing, electrical, plumbing, HVAC) typically takes 4-8 weeks. Finish work (drywall, paint, flooring, fixtures) takes another 4-6 weeks. Allow 2-3 weeks for inspections, punch list items, and unexpected delays. Track progress weekly and address issues immediately rather than waiting until scheduled completion.
Pass Final Inspections: Building, electrical, plumbing, mechanical, and fire marshal inspections are all required before Certificate of Occupancy issuance. Schedule inspections as work completes rather than waiting until the end. Coordinate with your contractor to ensure all systems are complete and compliant before calling for inspection.
Obtain Certificate of Occupancy: This document allows you to legally occupy the space and open for business. No Certificate of Occupancy means no opening, regardless of how ready you think you are.
Stage 6: Technology and Systems
Modern businesses require multiple technology systems to operate efficiently. Set these up during construction, not after opening.
Point of Sale (POS) or Management Software: Select software appropriate for your business type. Restaurants need POS systems with table management and kitchen display screens. Retail needs inventory management. Service businesses need booking and client management. Research industry-specific solutions, not general business software. Budget $50-$300 monthly for cloud-based systems plus $500-$2,000 for hardware (tablets, card readers, receipt printers).
Access Control and Security: Install security cameras covering entrances, exits, cash handling areas, and storage. Install commercial-grade door locks, and consider access control systems if you have employees or operate extended hours. Budget $1,000-$5,000 depending on facility size and requirements.
Business-Grade Internet and WiFi: Consumer internet is inadequate for business operations. Install business-grade internet service with guaranteed uptime and support. Ensure WiFi coverage extends throughout customer areas. Budget $100-$300 monthly for service plus $300-$1,000 for access points and network equipment.
Accounting System: Set up QuickBooks or similar accounting software before opening. Configure chart of accounts, connect your business bank account, and establish processes for tracking revenue and expenses. Proper accounting from day one simplifies tax filing and provides data for business decisions.
Communication Systems: Establish business phone number (consider VoIP systems like Google Voice or RingCentral), business email on your domain, and SMS capability for customer communications. Separating business and personal communications from the start is easier than migrating later.
Stage 7: Licensing, Insurance, and Compliance
Regulatory compliance varies dramatically by industry and location. Research requirements specific to your business type and jurisdiction.
Industry-Specific Licenses: Food service requires health department permits and food handler certifications. Salons need cosmetology establishment licenses. Contractors need trade-specific licenses. Childcare facilities need state licensing. Document all required licenses, application fees, inspection requirements, and approval timelines. Some licenses require 30-60 days for approval.
Business License: Most cities and counties require general business licenses. Contact your city clerk or county licensing department for requirements. Fees range from $50 to $500 annually depending on jurisdiction and business type.
General Liability Insurance: Obtain coverage before opening. Most landlords require proof of insurance before giving you keys. Typical coverage is $1 million per occurrence with $2 million aggregate. Premiums vary by industry ($500-$5,000 annually). Get quotes from multiple commercial insurance brokers.
Industry-Specific Insurance: Restaurants need liquor liability if serving alcohol. Salons need professional liability. Contractors need workers' compensation. Fitness facilities need participant liability. Consult with an insurance broker experienced in your industry.
Display Permits and Licenses: Most jurisdictions require business licenses, health permits, and occupancy certificates to be displayed in visible locations. Check display requirements for all permits and licenses.
Stage 8: Equipment, Inventory, and Supplies
Order long-lead items during construction, not after Certificate of Occupancy. Some equipment has 6-12 week lead times.
Create Equipment List: Document every piece of equipment needed to operate. Include dimensions and utility requirements (electrical, gas, water, ventilation). Share this list with your contractor during design to ensure adequate infrastructure.
Order Long-Lead Equipment Early: Commercial kitchen equipment, specialized machinery, and custom-built fixtures often have 6-12 week lead times. Order as soon as floor plans are final to ensure delivery coincides with construction completion.
Purchase Operating Supplies: Stock opening inventory of consumables: cleaning supplies, office supplies, packaging materials, and industry-specific supplies. Budget 10-20% more than you think you need. Running out of critical supplies during opening week creates unnecessary stress.
Establish Vendor Accounts: Set up accounts with ongoing suppliers before opening. Negotiate payment terms, delivery schedules, and minimum order quantities. Having vendor relationships in place before opening allows you to focus on customers rather than scrambling for supplies.
Stage 9: Staffing and Training
Hiring and training timelines depend on position complexity and labor market conditions. Start recruiting 4-8 weeks before opening.
Define Positions and Write Job Descriptions: Document responsibilities, required qualifications, and compensation for each position. Clear job descriptions improve recruiting quality and set performance expectations.
Recruit and Hire: Post positions on industry-specific job boards, not just general employment sites. Check licensing requirements for positions requiring professional credentials. Conduct background checks where appropriate. Allow 2-4 weeks from posting to hire decisions.
Conduct Pre-Opening Training: Train staff 1-2 weeks before opening. Cover systems, procedures, customer service expectations, and emergency protocols. Conduct mock service scenarios. Address questions and refine procedures based on training feedback.
Verify Employment Eligibility: Complete I-9 forms within three days of hire. Retain copies per federal requirements. Set up payroll system and tax withholding before first paychecks are due.
Stage 10: Pre-Opening Marketing
Marketing begins months before opening, not on opening day. Build awareness and anticipation to ensure you have customers from day one.
Establish Online Presence (6 Months Before Opening): Register domain name, secure social media handles, create Google Business Profile (set status as "Opening Soon"), and build basic website or landing page. Early online presence allows you to build audience before opening.
Soft Launch Marketing (4-5 Months Before Opening): Begin posting construction progress on social media. Join local business groups and community forums. Distribute flyers or business cards at complementary businesses. Create email capture on your website for updates and opening announcements.
Active Pre-Opening Marketing (2-3 Months Before Opening): Launch social media advertising targeting your local market. Announce opening date once construction timeline is firm. Offer pre-opening promotions or founding member discounts. Partner with local organizations for cross-promotion. Create press releases for local media.
Grand Opening Event Planning: Plan ribbon cutting, promotional offers, or community event for opening week. Invite local media, business groups, and community leaders. Document attendance and capture email addresses for future marketing.
Stage 11: Final Pre-Opening Checklist
The final two weeks before opening are critical for systems testing and last-minute details.
Facility Readiness Inspection: Walk through every system. Test all equipment. Verify lighting, HVAC, plumbing, electrical systems work as designed. Check that all finishes are complete. Address punch list items before opening.
Administrative Readiness: Verify all software systems are configured and tested. Print or prepare all forms, receipts, and documents needed for opening. Confirm all vendor accounts are active. Test payment processing. Conduct trial runs of opening and closing procedures.
Safety Systems Verification: Test fire extinguishers, emergency lighting, exit signs, and smoke detectors. Verify emergency contact lists are posted. Review emergency procedures with all staff.
Final Compliance Check: Confirm all licenses and permits are approved, received, and properly displayed. Verify insurance certificates are current. Document that Certificate of Occupancy is posted if required.
Soft Opening (Optional): Consider 2-3 days of soft opening with limited hours or invitation-only service. This allows you to test systems, train staff under real conditions, and refine procedures before full public opening.
Stage 12: Post-Opening Operations
Opening is not the finish line. Ongoing operations require systems for recurring tasks.
Daily Operations: Opening and closing procedures, cash handling, inventory management, cleaning protocols, and customer service standards. Document these procedures and train all staff on expectations.
Weekly Tasks: Schedule creation, inventory ordering, financial reconciliation, staff meetings, and facilities maintenance. Establish consistent weekly routines.
Monthly Activities: Financial review against projections, accounts payable and receivable management, payroll processing, marketing performance analysis, and supplier relationship management.
Quarterly Tasks: Detailed financial analysis, tax preparation, insurance review, equipment maintenance, and strategic planning adjustments based on actual performance.
Annual Requirements: License renewals, insurance renewals, tax filings, annual reports (for corporations and LLCs), equipment servicing, and strategic planning for the coming year.
Why Generic Checklists Are Not Enough
This guide provides the framework every business follows, but the details matter more than the structure. A restaurant in New York faces different permitting requirements, health department regulations, and licensing timelines than a restaurant in Phoenix. Salon suites have specific cosmetology board requirements that retail stores do not face. Fitness facilities need different insurance and waivers than consulting businesses.
Generic checklists cannot account for:
Industry-Specific Requirements: Health department permits for food service, cosmetology board inspections for salons, liquor licensing for bars, contractor licensing for trades, or professional certifications for medical and wellness businesses. Each industry has unique regulatory requirements.
Location-Specific Regulations: Zoning codes, permit processes, inspection requirements, and timelines vary by city, county, and state. What takes two weeks in one jurisdiction requires two months in another.
Actual Costs and Vendors: Knowing you need a POS system is different from knowing which POS systems work best for your business type, what they cost, and which vendors provide local support. Implementation details separate successful openings from delayed ones.
Timeline Dependencies: Some tasks must happen in a specific sequence. Applying for certain licenses before having a Certificate of Occupancy wastes time. Ordering equipment before finalizing floor plans creates delivery coordination problems. Understanding critical path dependencies prevents delays.
Get Your Industry-Customized Opening Checklist
BizPlanStudio's Opening Checklist deliverable provides the specific guidance you need for your business type and location. Our checklists include:
Specific Regulatory Requirements: Exact licenses, permits, and inspections required for your industry and jurisdiction, with application links, fees, and processing timelines.
Vendor Contacts and Equipment Lists: Industry-specific equipment lists with recommended vendors, cost ranges, and lead times. Technology system recommendations with setup guidance.
Industry-Specific Costs: Actual cost ranges for build-out, equipment, initial inventory, insurance, and working capital based on your business type and market.
Timeline with Critical Path: Month-by-month timeline showing task dependencies, longest-lead items, and scheduling considerations specific to your industry.
Templates and Forms: Customizable document templates for your industry, including vendor RFPs, employee handbooks, operational procedures, and compliance checklists.
Your Opening Checklist is included in all three BizPlanStudio tiers:
Quick ($300): Condensed Opening Checklist (15-20 pages) with essential tasks, regulatory overview, and basic timeline.
Standard ($500): Complete Opening Checklist (30-40 pages) with detailed tasks, vendor contacts, cost estimates, and month-by-month timeline.
Premium ($1,000): Comprehensive Opening Checklist (50-60 pages) with milestone tracking, contingency planning, vendor comparison tables, and implementation support materials.
All three tiers include your industry-customized business plan and operational guidance tailored to your specific business type.
Ready to open your business with confidence? Get your customized Opening Checklist today.