Why a startup checklist matters
Most brokerages fail in the first two years, and it’s rarely because of market conditions. The common killers are:
- Missing compliance requirements that lead to fines or license suspension
- Underestimating operational costs and running out of capital
- Poor technology choices that create bottlenecks as you scale
- Incomplete legal structure that exposes personal assets
This checklist is organized by category and priority. Tackle the legal and compliance items first—they’re non-negotiable. Then move to operations and technology. The goal isn’t perfection on day one; it’s launching with a solid foundation that can scale as you grow.
Legal foundation (Weeks 1-2)
Get your legal structure right before you do anything else. This protects your personal assets and sets up your business for growth.
Entity formation
- Choose entity type: LLC (most common), Corporation (S-Corp or C-Corp), or Sole Proprietorship
- LLC offers liability protection and pass-through taxation
- Consult a CPA and attorney to choose the right structure
- Register with state: File articles of organization/incorporation
- Obtain EIN: Federal Employer Identification Number from IRS (free, takes ~15 minutes online)
- Register for state taxes: Sales tax, payroll tax (if hiring), and any local business licenses
- Operating agreement: Document ownership, profit distribution, and decision-making processes
Insurance
- Errors & Omissions (E&O) insurance: Required in most states, protects against professional liability claims
- General liability insurance: Covers property damage and bodily injury
- Cyber liability insurance: Protects against data breaches (critical if handling client data)
- Workers’ compensation: Required if you have employees (varies by state)
Contracts and legal documents
- Independent contractor agreements: For agents (must comply with state and federal labor laws)
- Employment agreements: For staff (if hiring W-2 employees)
- Client service agreements: Listing agreements, buyer representation agreements
- Vendor contracts: MLS access, lockbox services, marketing vendors
- Privacy policy and terms of service: Required for website and data collection