You’ve realized that you want to be an entrepreneur, but you’re not sure how to start a business. This is a common situation for all types of entrepreneurs, so you’re not alone. There are a lot of steps you’ll need to take in order to get your new business off the ground. Many of them are boring or complex or both, so you will want to enlist some help to get your business started. Fortunately, all these important steps can be drilled down into a starting a business checklist. From writing a business plan to getting a business license, find out which steps you need to take to start your business using this 20-point checklist. Here is your starting a business checklist:
Some entrepreneurs know exactly what kind of business they want to start. Others simply know they want to start one but aren’t sure what type. When figuring out what type of business to launch, ask yourself questions about what you’re passionate about, what work experience you have and what kinds of problems you believe you can solve. You can even take additional steps to figure out what kind of business you should start .
Coming up with a business name is always easier said than done. Rushing through this step and settling on a poorly thought-out name can lead to major problems down the line. You want your name to be catchy while conveying some of the meaning and purpose of your company. Relatedly, you’ll want to make sure your business name lines up with any website domain name you’ll need to get for your business. Learn exactly what you should do to come up with a great business name for your startup.
Writing a business plan serves several important purposes. A written business plan is often needed to get financing from banks and lenders . Your business plan also serves as a roadmap for your new business; a roadmap that isn’t static but iterative, constantly evolving as your business develops.
With your business name and plan completed, a closely related step is to lock down a domain name for your business’s website. Visit a domain name registration site, such as GoDaddy, to find out if your business name is available. If it is available, you should register it so no one else can use it for their website. In addition, it’s a smart move to register domains that are close variations of your name as well.
You might have heard the phrase, “location, location, location” in reference to real estate. But these words are equally important when it comes to starting your business. Will you run your business from your home, a storefront or an office? If you do need a physical property, will you lease it or buy the property? Are you planning to hire people? Can you grow with the space you’re interested in? You’ll have to ask yourself several questions about you and your company in order to decide on an answer. What’s more, you should conduct research of different locations, their demographics, traffic patterns, infrastructure and potential customers to make a more comprehensive decision.
What’s great is that nowadays, you don’t need to be a graphic designer to come up with a solid logo for your business. You can outsource the logo to a freelance designer or you can utilize plenty of online resources to make one yourself. Various websites allow you to choose from tons of ideas and pay only for what you use. There are also logo websites like Logaster that’ll give you a professional-looking logo for free, as well as offering priced services if you want more.
Choosing how to structure your business is a critical step with major implications. The most significant implication is that your business structure, or business entity type, will determine how your business is taxed. There are a variety of business entities to form, such as a sole proprietorship, partnership, limited liability company (LLC) or a corporation, like an S-corporation or C-corporation. Learn about the six types of business structures to choose from and the pros and cons of each.
With your business name and structure established, applying for an Employer Identification Number (EIN), or federal tax ID number, is a smart idea for your company. Having an EIN helps you separate your personal finances from your business. If you want to incorporate your business, plan to hire employees or open a business bank account, having an EIN is a must. If you don’t have an EIN and want to open a business bank account, the bank will use your Social Security number for the account, and thus not keep it totally separate from your personal finances. Find out how to apply for an EIN for free for your business .
Armed with your business’s EIN, it’s a good idea to open either or both a business checking and savings account. The reasoning behind this is again good bookkeeping; you don’t want to intermingle your personal finances with that of your business. With an EIN, the bank can use that number instead of your Social Security to open your business bank accounts. It’s also a good idea to get a business credit card.
It is very common for businesses to require a business license to operate. Businesses that offer personal services, medical services, serve alcohol and others usually have to apply for a business license that is specialized for their types of products and services. Beyond specialized ones, there are more common licenses and permits such as health inspection certifications, building permits, zoning permits, sales tax licenses and fire and police department permits, among many others. Visit your state and city government websites to see if anything is required of your business in this regard and how to get business licenses that you may need.
When you’re starting a business, you should assemble a team of trusted experts, like an attorney, to help you throughout the initial process and beyond. You should find a lawyer with experience in your industry and small business legal issues in general. Having a business attorney can help you figure out important decisions such as what form of business structure to choose, negotiations and contracts. Lawyers also usually have networks of other experts and professionals that can help with other areas of your business.
Having an accountant on your team as a business owner is an invaluable asset. A good accountant can handle your taxes, which can become quite complicated if you choose to organize your business as a corporation. Accountants also have comprehensive knowledge about good accounting systems and software to use. What’s more, a business accountant will help you make the most of your money, including finding new revenue streams, tax write-offs and deductions, areas of the business to reinvest in and much more.
Your business accountant can help with this step. With your business bank accounts set up, choose an accounting program is the next move. There are tons of free accounting software platforms to choose from. But if you’re serious about your business, it’s best to start off with a free platform or trial and then step up to a paid service. Paid accounting software, like QuickBooks, can unlock a lot more capabilities than those offered by free platforms.
Raising capital for your startup is one of the most crucial steps in launching your business. Without the necessary funds, your new business won’t last long. A good place to start is with your own savings, but also friends and family. Beyond them, you should investigate sources of funding such as angel investors, bank loans, venture capitalists or even crowdfunding.
An important business expense you’ll need to figure out is what equipment and office supplies you need to purchase. Most businesses these days need basic equipment like computers, internet and phone service. There are also tools and equipment that is heavily dependent on the industry your business is in. If you open a restaurant , you have to look into kitchen appliances and equipment to purchase or maintain. You’ll also need to figure out whether it’s worth buying equipment or leasing it. Find out everything you need to know about equipment financing .
As you figure out and acquire equipment and supplies for your business, you’ll need to consider how you price your products or services. In order to determine your processes, you’ll need to dig into your financials, both statements and projections. You’ll need to figure out your business costs, such as overhead, materials and time, for making your product or providing your service. If you hire employees, you’ll have to incorporate the cost of compensation, including benefits like insurance.
This is one of the more fun steps, like your business’s logo design. Having business cards for you and your employees makes your company appear more professional. They also serve a key practical purpose that all entrepreneurs should be constantly working on — networking. Equipped with professional business cards, your company will gain more credibility, allowing you to network and meet new people who could offer major benefits to your company.
Unless you plan to do everything on your own, at some point you’re likely to hire employees. Before hiring anyone, you must figure out what your company can afford in terms of salaries. You’ll also need to pinpoint exactly the needs of your business and the type of employees who best can meet them. As a startup or new business, you might not have the budget for full-time staff, which is when hiring independent contractors can be a sound solution.
One the previous steps you took — registering a domain and setting up your business’s website — is one step in the right direction in terms of marketing. Once you have your business website established, it’s time to tap social media networks, like Facebook, LinkedIn, Google+ and Twitter, to market your new business to the world. Beyond these online platforms, work on more timeless marketing like word of mouth, growing SEO and applying the right marketing mix of strategies to effectively get the word out about your company.
With so many preliminaries steps to starting your business out of the way, it’s important to set yourself up for longer-term concerns. Insurance is a key area to stay on top of early on. Most businesses need to get general liability insurance, which covers you if a customer injures themselves on your premises. Employee insurance, such as workers’ compensation, is an absolute must when you have full-time employees. There are tons of other situations that could require more insurance so find out how much business insurance your company needs .
Though there are more than a dozen steps, this business startup checklist is a great way for you to get started on opening your business. After you get your company up and running, new concerns and issues will emerge, and you will have new steps to take in order to keep your business going. Always make sure if you reliable and professional people like accountants and attorneys to help you go through the whole process. Their expertise can be invaluable in establishing a financially and legally sound business. Most importantly, be thorough and take your time through the entire process of starting a business and you’ll have less to regret later.