Business Startup Checklist: Steps to Success
By: Catherine Conlan
Starting a business is an exciting move. But before you can start growing your small business, much less invoicing customers, it’s a good idea to get some important steps out of the way. The best way to start is to write up a business startup checklist.
Fortunately, there are plenty of resources that can help new entrepreneurs, including the Small Business Administration (SBA) and SCORE, a national group of retired business owners dedicated to passing on what they know.
Through it all, you’ll need to be resilient and resourceful. “Are you prepared to get knocked down, again and again?” says Claudie Fanning, director of marketing and communications at the Louisiana Tech Park. “You will hear ‘no’ a lot more than you will hear ‘yes’.”
Here’s a small business startup checklist to help make the process easier.
Research, Research, Re…
You may think your business idea is a great one, but do other people? Does the market? Are you even going to have customers? Fanning recommends identifying the pain point that your business helps people solve, as part of your business startup checklist.
“Once you think you have an idea for a product, you should test out the idea on potential customers through surveys, one-on-one interviews, mock-up demonstrations and so on to validate your hypothesis.”
Knowing exactly who you’ll be selling to will help. “Everyone is a potential customer” just won’t cut it, he says.
In addition, you’ll need to research your industry. Find out what some of the major trends are. Determine who your competitors might be and how you can differentiate yourself from them.
Write a Solid Business Plan
Aspiring entrepreneurs sometimes get hung up on writing a business plan as part of their startup business checklist. Why? They worry it will lock them into something that can’t be changed. But if you’re looking for a loan to get your business started, having a business plan shows you’ve thought through some of the issues you might face.
If you’re not looking for a loan, a business plan isn’t quite as urgent, Fanning says. You’ll still need a focused vision for your business, though, and even a brief business plan can help.
“You should have a business plan and strategy compiled in some way to ensure your adventure stays on course,” says Phillip Reinhardt, managing partner and CEO of PBJ Marketing. After all, you won’t know you’re on course if you don’t have a map. Be flexible, though, and expect to change and adapt, Reinhardt says.
In addition, include an end goal and an exit strategy. This could include selling, bringing on investors, going public, finding more partners or other options, he says. Feel free to change it as time goes on.
Set a Budget
Your startup business checklist would be wholly incomplete without a budget. You’ll need to know (or at least have educated ideas) about how much each unit will cost, what production will cost to get started, how much it costs to acquire a customer, what your break-even point is, and so on, Fanning says. “It is no fun to find out later that you have been selling something for a loss because you did not understand the economics of your business.”
File Your Papers
Make it official by incorporating or forming an LLC. Nellie Akalp, CEO of CorpNet.com, says she works with many small-business owners who don’t incorporate when they first started out.
“They think that since they haven’t made much money, or they are a very small or solo team, that they should operate as a sole proprietorship,” she says. But no matter how small your team is, as soon as any income is made, personal assets are at risk if a business owner does not incorporate to start forming that corporate shield.
“A great structure for small or solo teams is the LLC, a limited liability company, as it has limited formalities while still providing protection for personal assets.”
In addition, get all the permits, licenses and registrations you might need, depending on your industry, Fanning says. At the very least, get local and state tax ID numbers for filing sales taxes and payroll taxes, he says, and a federal taxpayer ID number for federal tax purposes.
Get your Business Online
Rare is the business that can get by without a website these days, so register a domain as quickly as you can. Make sure it’s available before you start using it in documents, says Leo Welder, founder and CEO of ChooseWhat.com, a startup guide for entrepreneurs.
“Although it may seem premature, building a website is a great next step,” he says. “The process of designing the site and creating the content will really help you think through how you want to present your ideas to the outside world. It's a great exercise.”
Consider Bringing On Others
At some point, it’s likely that you’ll run into a business issue that you don’t have the answer for. That’s when it may be time to bring on a partner.
“Identify your strengths and your weakness and find a partner who is just as passionate about what you want to do and is the yin to your yang,” says Rich Razgaitis, CEO and co-founder of San Francisco based startup FloWater. At the very least, Razgaitis recommends forming a board of advisers who believe in you and will offer counsel when needed.