You've had a business idea in your head for a long time — maybe a nail salon, a pho restaurant, a house cleaning service, or an online shop. But every time you think about making it real, you get stopped by a barrage of questions: Where do I register? What documents do I need? Do I have to hire a lawyer?
Take a breath. Starting a small business in the US is not as complicated as many people think — if you know how to take it one step at a time.
In this article, we'll walk through 5 key steps to turn your idea into a legal business with a business license, ready to operate.
Step 1: Clarify Your Idea and Validate the Market
Before worrying about paperwork, spend time answering one question honestly: Do people actually need what you want to sell?
Many people in the Vietnamese community start businesses the way "I see someone doing it, so I'll do it too" — it's not wrong, but it needs one extra step of reality-checking.
Ask yourself these things:
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Who are your customers? (Older Vietnamese people in your area? Middle-class American customers? Students?)
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Who are your competitors? What's different about what you offer?
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Can you make a profit, or will you just break even?
A quick way to validate: Talk to 10 to 15 people in your target customer group. Not friends or family — they'll usually say "great idea" to be polite. Talk to strangers, ask real questions, listen carefully.
If your idea still holds up after this step, you're ready to move forward.
Step 2: Choose a Business Structure
This is a step many people skip because it sounds too "technical" — but it directly affects your taxes, legal liability, and how you can borrow money later.
There are 4 main types of business structures for small businesses:
| Type | Good for... | Advantages | Disadvantages |
|---|---|---|---|
| Sole Proprietorship | Working alone, small scale | Simplest, least paperwork | You're 100% liable if sued |
| LLC (Limited Liability Company) | Protecting personal assets | Separates personal and business assets | Annual registration fees |
| Partnership | Going into business with others | Shared capital and responsibility | Need clear partnership agreement |
| Corporation | Seeking large investors | Easy to raise capital | Complex, more expensive |
Practical advice: Most small businesses in the Vietnamese community — from nail salons and restaurants to transportation services — should start with an LLC. The simple reason: if a customer sues you, they can only take the company's assets, not your house or car.
LLC setup costs range from about $50 to $500 depending on your state. California is pricier than Texas, Florida is cheaper than New York — you'll need to check the specific fees for your state.
Step 3: Name Your Business and Register It
You need a name — and that name must not already be taken in your state.
How to check the name:
Visit your Secretary of State's website for your state. For example:
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California: sos.ca.gov
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Texas: sos.state.tx.us
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Florida: dos.fl.gov
Look for "Business Name Search" and type in the name you want. If no one has registered it yet — great! If someone has, you'll need to pick a different name.
A note about DBA (Doing Business As): If you want to operate under a name different from your registered LLC — for example, your LLC is named "Nguyen Family Services LLC" but you want to call your restaurant "Saigon Pho" — you need to register a DBA (trade name). Cost is usually very low, between $10 and $100.
Once you've chosen a name, you need to file your registration documents (Articles of Organization for an LLC or Articles of Incorporation for a Corporation) with your state. Most states let you do this online, taking about 15 to 30 minutes.
Step 4: Get a Tax ID and Open a Business Bank Account
This is a step many new business owners skip — and later regret when tax season comes around.
Get an EIN (Employer Identification Number)
EIN is your business's federal tax ID — like a Social Security Number but for your company. You need an EIN to:
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Open a business bank account
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Hire employees
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File business taxes
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Get many types of business licenses
How to get an EIN: It's completely free and you can apply online directly on the IRS (Internal Revenue Service) website at irs.gov. You usually get your EIN the same day.
Open a Business Bank Account
This is extremely important and many people in our community skip it: Don't use your personal account for business.
Why? Because if you mix personal and business money, you will:
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Lose the legal protection of your LLC (called "piercing the corporate veil")
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Have headaches at tax time trying to figure out what's a business expense and what's personal spending
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Look unprofessional to suppliers and customers
Most major banks like Chase, Bank of America, and Wells Fargo offer accounts for small businesses. Some online banks like Mercury and Relay are free and very convenient for new small businesses.
Step 5: Get a Business License and Related Permits
This is where most people get confused — because there's no single license for everything. Depending on your business type and location, you may need multiple different licenses.
Local Business License
Almost every business needs a basic business license from the city or county where you operate. This is the most common type, usually renewed annually, costing between $50 and $400.
File at: Your city or county's website.
Seller's Permit
If you sell physical goods — like clothing, packaged food, cosmetics — you need a Seller's Permit to collect sales tax from customers and send it to the state. Registration is free through your state's website.
Industry-Specific Licenses
Some businesses need additional licenses:
| Industry | License Needed |
|---|---|
| Nail salon, hair salon | Cosmetology License (issued by state) |
| Restaurant, food business | Food Handler Permit, Health Permit |
| Construction, home repair | Contractor License |
| Alcohol sales | Liquor License (very strict, expensive) |
| Childcare | Childcare License |
| Transportation/hauling | DOT Number (Department of Transportation) |
Zoning Permit
If you want to operate your business from home or at a commercial location, you need to check whether that area is zoned to allow your type of business. For example, not every residential neighborhood allows nail salons or warehouses.
Summary: The 5-Step Roadmap
Business idea
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Step 1: Validate market & confirm demand
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Step 2: Choose business structure (LLC, Sole Proprietorship...)
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Step 3: Name your business & register with state
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Step 4: Get EIN + Open business bank account
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Step 5: Get business license & related permits
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Ready to do business!
Common Mistakes to Avoid
- ✅ DO: Separate personal and business accounts from day one.
- ✅ DO: Get an EIN before opening a bank account.
- ✅ DO: Check zoning before signing a lease.
- ❌ DON'T: Use an unverified business name — you could be rejected or face trademark lawsuits.
- ❌ DON'T: Skip the Seller's Permit if you sell goods — you could face fines and back taxes.
- ❌ DON'T: Operate before you have all necessary licenses — risk of being shut down and fined.
Free Resources You Should Know About
You don't need to hire a lawyer or accountant right away (though you should later). There are many free resources:
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SBA (Small Business Administration): sba.gov — step-by-step guidance, searchable by state.
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SCORE: score.org — nonprofit organization that connects you with experienced business mentors, completely free.
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Small Business Development Centers (SBDC): Located at most community colleges, offer free consulting and may have Vietnamese-speaking advisors.
Starting a business in the US is not easy — but it's not a mystery that only rich people or degree holders can do. Many of the most successful Vietnamese business owners in the community started with little capital and limited English, but they took it step by step and didn't skip any steps.
Start today. Step 1 doesn't cost you anything.