How to Start a Tech Company

Written by Dave Lavinsky

how to start a tech company

Starting Your Own Tech Startup Company

We are living in the digital age. It is no surprise that people want to start their own tech business. But, what does it take to be a successful entrepreneur in the tech industry? What steps should you follow when starting your own tech startup? This article will discuss those questions and more.

We have a selection of articles for how to start a variety of tech-related businesses that can help you get started. Choose a link from the list below to start on your path to success.


14 Steps to Starting a Tech Company

  1. Choose the Name for Your Tech Startup Company
  2. The first step to starting a new tech business is to choose your business’ name.

    This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your tech startup:

    1. Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check domain availability.
    2. Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
    3. Think about marketing. Come up with a name that reflects the desired brand and/or focus of your tech business.

    There are several online business name generators that will help you quickly generate company names for your tech startup to give you some ideas.

  3. Develop Your Tech Business Plan
  4. One of the most important steps in starting a tech company is to develop your tech business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

    Your business plan should include the following sections:

    1. Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your tech startup.
    2. Company Overview – this section tells the reader about the history of your tech startup and what type of tech business you operate. For example, are you a software development company, mobile app business, web hosting service, or website design / development company, provide numerous paid usability services, conduct usability tests, or do you provide creative and professional services within the tech industry?
    3. Industry Analysis – here you will document key information about the tech industry. Conduct market research and document how big the industry is and what trends are affecting it.
    4. Customer Analysis – in this section, you will document who your ideal or target audience is and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or tech solutions like the ones you will offer?
    5. Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will develop your value proposition.
    6. Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
      • Product: Determine and document what products/services you will offer
      • Prices: Document the prices of your products/services
      • Place: Where will your business be located and how will that location help you increase sales?
      • Promotions: What promotional methods will you use to attract customers to your tech startup? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
    7. Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
    8. Management Team – this section details the background of your company’s management team, including the Chief Executive Office and Chief Technology Officer.
    9. Financial Plan – finally, the financial plan answers questions including the following:
      • What startup costs will you incur?
      • How will your tech business make money?
      • What are your projected sales and expenses for the next five years?
      • Do you need to raise funding to launch your business?

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  5. Choose the Legal Structure for Your Tech Business
  6. Next you need to choose a legal structure for your tech company and register it and your business name with the Secretary of State in each state where you operate your business.

    Below are the five most common legal structures:

    1) Sole proprietorship

    A sole proprietorship is a business entity in which the owner of the tech startup and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

    2) Partnerships

    A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a tech company together. The partners share in the profits and losses of the business.

    The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

    3) Limited Liability Company (LLC)

    A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a tech business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

    4) C Corporation

    A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a tech startup is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

    5) S Corporation

    An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

    Once you register your tech company, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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  7. Secure Startup Funding for Your Tech Company (If Needed)
  8. In developing your tech business plan, you might have determined that you need to raise funding to launch your business.

    If so, the main sources of funding for a tech business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a tech company that they believe has high potential for growth.

  9. Secure a Location for Your Business
  10. Having the right space can be important for your tech startup, particularly if you’d like to meet clients there.

    To find the right space, consider:

    • Driving around to find the right areas while looking for “for lease” signs
    • Contacting a commercial real estate agent
    • Doing commercial real estate searches online
    • Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

  11. Register Your Tech Startup with the IRS
  12. Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

    Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

    Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

  13. Open a Business Bank Account
  14. It is important to establish a bank account in your tech startup’s name. This process is fairly simple and involves the following steps:

    1. Identify and contact the bank you want to use
    2. Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
    3. Complete the bank’s application form and provide all relevant information
    4. Meet with a banker to discuss your business needs and establish a relationship with them

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  15. Get a Business Credit Card
  16. You should get a business credit card for your tech business to help you separate personal and business expenses.

    You can either apply for a business credit card through your bank or apply for one through a credit card company.

    When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

    Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

  17. Get the Required Business Licenses and Permits
  18. Every state, county and city has different business license and permit requirements.

    Nearly all states, counties and/or cities have license requirements including:

    • General Business License: getting your Articles of Incorporation as discussed above
    • Sales Tax License or Seller’s Permit: for selling products
    • Zoning Approval: typically at the city or county level, this provides authorization for construction or use of a building or land for a particular purpose
    • Fire Department Approval: a process by which the local fire department reviews and approves the installation of a fire alarm system.

    Depending on the type of tech business you launch, you will have to obtain the necessary state, county and/or city licenses.

  19. Get Business Insurance for Your Tech Business
  20. Other business insurance policies that you should consider for your tech startup include:

    • General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
    • Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
    • Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
    • Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.

    Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

  21. Buy or Lease the Right Tech Company Equipment
  22. Most tech startups don’t need much equipment. To start a tech company, you probably only need a computer, phone, dedicated web hosting, and internet access. You might also need office furniture, printers, or other accessories.

    The first step to buying tech company equipment is identifying what you need. If you are opening an IT business, for example, you will probably need servers and desktops.

  23. Develop Your Tech Startup Marketing Materials
  24. Marketing materials will be required to attract and retain customers to your tech business.

    The key marketing materials you will need are as follows:

    1. Company’s Logo: Spend some time developing a professional-looking logo for your tech company. Your startup’s logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
    2. Website: Likewise, a professional tech business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you. Invest in search engine optimization (SEO) efforts to help boost your keyword rankings and generate more organic traffic.
    3. Social Media Accounts: establish social media accounts in your company’s name and start generating interest and increase customer anticipation for upcoming products or particular features. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your technology company.

  25. Purchase and Setup the Software Needed to Run Your Tech Business
  26. Most tech companies need accounting software and customer relationship management (CRM) software.

    While there are many different software options available, some of the most popular programs for accounting include QuickBooks and Xero. Some of the most popular CRM programs include Salesforce, and Zoho.

    You may also need other software such as business development, project management, design software, web hosting, DNS hosting, search engine optimization (SEO) tools, online web applications, and/or a simple website wireframe tool.

    Research the software that best suits your needs, purchase it, and set it up.

  27. Open for Business
  28. You are now ready to open your tech business. If you followed the steps above, you should be in a great position to build a successful business.

    Here are some additional tips to help you increase your success in the tech world:

    • Be Patient: It takes time for your business to take off. If you are not seeing the results you want, keep at it. With any luck, your company will achieve success and provide customers with great products or services.
    • Hire Professionals: To build your tech business, you most likely enlisted the help of professionals to develop strategies and offer guidance. For any issues that they cannot handle alone, consider hiring additional professionals or outsourcing work to freelancers.
    • Ask for Customer Feedback: Customers are your best source of valuable feedback about your business and how it compares to your competition. Talk to them to find out what they like and do not like about your business, what could be improved, and how you can provide value. This will be an ongoing process to continually improve your business and customer satisfaction. Over time this will also increase your customer retention.


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    Below are answers to frequently asked questions that might further help you.

    How to Start a Tech Company FAQs

    A technology startup is a company that uses new technology to create products and services. Technology startups also focus on rapid growth, innovative thinking, and a team-oriented culture.

    A tech business can be very profitable. Some of the most valuable companies in the world are tech-oriented including Apple, Uber, Google, Microsoft and Dell.

    To increase the likelihood of success, tech startups generally need to invest money in developing products with high-tech value. This often means spending capital on new technologies, equipment and talent.

    A tech business can develop and sell a wide range of products and services including: mobile app design, software development, hardware manufacturing, e-commerce platform development and more. As one of the fastest-growing industries in existence, there are endless opportunities to develop new technologies.

    It varies. The cost to start a technology company depends on the type of business, location and necessary equipment and expenses. For example, if you are opening an IT company, you will probably need equipment. If you are starting a web design agency, you may have to hire freelance designers or developers until your in-house team is large enough for full-time work.

    Fortunately, as a tech business, there are many opportunities to save money by using open-source software, code sharing sites and utilizing shared or virtual office spaces to help you save on startup costs. As your business grows, you will be able to re-invest those savings into new equipment and talent.


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