Essential Checklist for Starting a Business
The ultimate checklist for starting a business: 11 essentials you must do if you’re not sure where to begin with getting your own business up and running, you’re in the right place. This “starting a business checklist” is exactly what you need.
In this ultimate guide for starting a business, you’ll discover the 11 essentials you must do to launch your entrepreneurial journey. You’ll learn everything from where to register your business to which marketing strategy to use. The best part? You can adapt the steps to fit your needs no matter the type of company or freelancing gig you’re pursuing.
Let this checklist guide you on the journey towards making your entrepreneurial dreams come true!
1. Come up with a good business idea
Technology and online resources make starting a business easier than ever. But it all starts with a good concept. That’s why, if you’re looking to start a business, you’ll need to come up with an idea—and lots of them.
Making sure you have a good idea that’s likely to succeed is still one of the most important parts of creating your own startup. Before you dive in and start spending time and money to develop your company, you want to do 2 things: Test the idea through market research and check out your competition.
Test the idea and do market research
Ideas are great, but there is no substitute for testing in front of real people who represent your actual customer base. Test your idea about creating a new product or service with 10 or 20 people in your target market.
Rather than ask them to complete a survey online or over the phone, meet with each person individually. Investing time to get their feedback will unlock more insights into what’s most important to them when purchasing.
Check out your competition
Part of coming up with a good business idea is checking out your competition. Take a look at what other people are doing. If your business model is similar to another company’s, make sure you know how it’s different:
- Is your product or service superior?
- Can you offer something that others can’t?
- Has another company already tried to enter your market and failed?
Be honest with yourself—if other people aren’t able to successfully sell what you want to offer, perhaps that idea isn’t as good as you thought it was. But if you believe the competition is failing at marketing or another strategy, you can identify how your ideas are better and create a plan to make it happen.
2. Create a business plan
A business plan can help you formalize your idea and streamline the business creation process. It provides a roadmap by getting you to sit down and think things through methodically.
Keep in mind that a business checklist and a business plan are very different. A business checklist lists the steps you need to turn your business from an idea to reality. A business plan identifies strategies and methods of execution to bring success to your company.
According to research from the Harvard Business Review, creating a business plan increases your chances of success by 16%.
Not sure what to include in your business plan? The U.S. Small Business Administration (SBA) suggests you start with these sections:
- Executive summary: Your mission statement, product or service, leadership team, and location
- Company description: What your company is and the problems it solves
- Market analysis: Industry outlook and competitive research
- Organization and management: The legal structure of your business and the organizational structure of your leadership team
- Service or product line: Your product or service and how it benefits your customers
- Marketing and sales: Describe how you’ll attract and retain customers
- Funding request: Your requirements for funding over the next 5 years (if you plan to ask for funding)
- Financial projections: Prospective financial outlook and cash flow projections to prove your business is stable and will be successful
- Appendix: Supporting documents like credit histories, product pictures, patents, and contracts
Remember: A business plan serves as an outline for how things should run at your company, but it’s not required to start a business. On its own, a good business plan doesn’t make a company successful—execution does.
3. Get a brand for your new business
Besides settling on the perfect business name, a good brand helps people remember your company and immediately understand what you do. For most businesses, there are three key components of a brand:
- Color scheme
Take some time to think about these elements. Consistency is key here—especially with color schemes, where any deviation from your chosen palette risks confusion among clients or customers.
Many companies use primary colors (red, blue, green) in their logos. Whichever you choose, stick with one primary color (so that it remains bold enough) and incorporate secondary colors (like orange, yellow, purple ) into your design.
Businesses can change slogans easily. However, logos should remain consistent over time, especially if you plan on expanding later on.
4. Choose a business structure and make it legal
Registering your business as an official entity with local and state governments will help you build credibility and establish legal ownership over your new business.
Your legal structure determines how much liability protection you have as a sole proprietor or as a company. The type of business entity also affects which business tax rates apply to your profits, losses, and gains. To figure out which legal structure is best for you, here are four basic options:
- Sole proprietorship
- Limited Liability Company (LLC)
Part of the decision depends on the type of business you’re starting and how much control you want over your business. If you aren’t sure, talk with an accountant or lawyer to determine which type fits your business needs.
Permits and licenses
Securing the proper permits and licenses can vary by state. Unfortunately for small business owners, the process can require stacks of paperwork.
You’ll need to comply with all state and local regulations, as well as permits required by your city or county. These vary widely depending on where your business is located and what it does. Check with your local government to figure out exactly what paperwork and licenses you need before getting started.
Get an EIN
Your small business may also need to register for an EIN, or Employer Identification Number. It isn’t always necessary, but getting a tax ID from the IRS can come in handy for opening business bank accounts, hiring employees, and filing taxes.
5. Open a business bank account
Your new business venture may require you to open a business bank account. It can help you keep track of the money flowing in and out of your business and simplify recordkeeping. When you’re ready to open an account, gather all relevant documents (like your business license and EIN letter) and present them to your banker.
6. Implement a bookkeeping solution
Part of getting your financial ducks in a row is figuring out how you’ll manage bookkeeping for your small business. Many affordable bookkeeping solutions exist to help you record and keep track of financial transactions.
You might choose to handle it on your own in the beginning. But suppose your business ever gets to a point where you need professional financial services, such as hiring an accountant or signing up for payroll services. In that case, they can plug right into your accounting software system.
7. Arrange for small business insurance
Small business insurance is an important part of any startup checklist. Without coverage, you’re leaving yourself open to a substantial amount of financial liability. The type of insurance you need can vary. For example, you’ll benefit from different coverages whether you start a restaurant or a landscaping business.
Small business coverage protects your company if someone else makes a claim against you. Plus, if you hire employees, you may need to purchase worker’s compensation insurance. But getting covered is easier than ever when you get an instant quote from Huckleberry.
8. Consider startup financing
How much does it cost to start a business? Costs could include investing in supplies, hiring employees, and buying real estate. You may also need a dedicated workspace or office where you can work undisturbed.
Regardless of what your startup costs might be, listing them helps you determine how much funding you’ll need. Then, you can figure out how to get it.
Bootstrapping your business through self-funding is a great way to leverage your financial resources to support and grow your business. You might tap into your savings account, take out a 401(k) loan, or ask family and friends to pitch in.
Investors can contribute through venture capital investments. Typically, they get an ownership share and an active role in the company in exchange for their venture capital. You’ll need a comprehensive business plan if you pursue this approach.
Small business loans are another popular funding option. With a loan, you can retain complete control of your business. When reviewing your application, lenders usually ask for a business plan, expense sheet, and 5 years of financial projections.
And don’t forget that most people won’t take you seriously unless you look like a professional—so, consider paying for office space or enlisting an attorney or accountant to help with launching your business. After all, if someone is going to invest in your company, they’ll want reassurance that it will be around long-term.
9. Hire the right employees
Not every business needs employees. Even if you plan to hire, you may not need to add staff right off the bat. It’s up to you to decide what your business can do without at first and how much flexibility you have regarding salaries down the line.
When you’re ready to hire your first employee, create clearly defined job descriptions and a plan for employee benefits.
10. Set up shop
Now that you have the foundation in place, it’s time to set up shop. Your company will be ready to open its doors to the public once your location, technology, and marketing plan are in place.
Find a business location
If you want to start a business, location is everything. Sure, if you’re creating an online retail store or consulting practice, you could operate out of your home. But you’ll need to find someone willing to rent you space if you’re opening a physical location.
Finding space isn’t always easy, but it’s possible. SCORE, the nation’s largest network of expert business mentors, suggests 4 questions to ask yourself when looking for a location:
- How accessible does it need to be? Do you need foot traffic or lots of parking
- What’s the growth potential if you need to expand or hire more employees?
- Does it meet your technical needs for computers, printers, or specialized equipment?
- Do you need space for trucks to unload inventory?
When choosing space, you must also consider local zoning ordinances, minimum wage laws, and business insurance rates.
Set up technology
Whether you open a storefront or set up shop as a one-person operation for a home-based business, you’ll need the right technology in place. You may need a:
- Point of sale (POS) system
- Customer relationship management (CRM) software
- Billing and accounting systems (to accept credit cards)
- Phone systems
- Data security
Depending on your industry, your company might need specialized technology or systems to support your operations.
Market your business
Even if you feel like you’ve got an amazing product or service, there’s no guarantee that it will take off with customers on its own—you need to get people excited about your opening day. It’s crucial to design an effective marketing plan that includes both traditional and digital forms of marketing.
This is where you look at what your competitors are doing and determine where you want to position yourself in relation to them. Ask yourself what sets you apart, and create a strategy around that information.
Also, don’t forget shop signs, business cards, brochures and flyers, setting up a website domain name, and social media channels such as LinkedIn, Facebook, Twitter, and Instagram to market to your target audience.
11. Create a monthly business checklist
If you own a small business, your to-do list is never empty (it could probably make it to the moon and back twice). So, it’s easy to lose sight of the big picture and overlook essential tasks. Setting up a monthly checklist can keep your business in shape:
a) Check up on your financials
If you’re a small business owner, you need to know what’s going on with your finances (even if you’ve hired accounting help to reconcile your accounts). Make sure you know your P&L (profit and loss) figures each month. That way, you’re not surprised at the end of the quarter (or, even worse, at the end of the year.)
Once a month is a great cadence for checking up on outstanding invoices, too. If you’ve got clients who are procrastinating on payment, shoot them a reminder.
b) Check up on your website and online properties
If you’ve got a web presence, check it once a month to ensure it’s still up to date. Inaccurate or old information can deter customers. It’s also a great time to respond to online reviews that you haven’t had a chance to address.
If you run a customer-facing business, know that about 90% of your potential customers will look at your reviews before deciding whether to give you a try. So make sure that they see you in the best possible light. (Here’s some more advice on getting great online reviews.)
c) Check up on your marketing strategy
You’ll always need new customers. So, during your checkup, look at what’s working with your marketing strategy—and what’s not. If one of your marketing efforts has been consistently underperforming, cut it so that you can free up time and money for something that’s working better.
Plan your testing strategy for the next month. Try targeted Google ads, buy a slot in the local coupon book, or build a coordinated social campaign.
d) Check up on your employees
Bad communication can lead to many business problems. Stop it before it starts by making sure to check in with your team at least once a month. It’s as simple as meeting with your employee to say, “Hey, I’d love to hear how things at work are going for you.”
Keep an open mind and ask each employee if they see room for improvement and if they’ve noticed anything that they suspect you haven’t seen.
Remember: If you ask for honesty, be prepared for it. If a challenging topic comes up, there’s no shame in asking to table the subject so you have time to think. But do set a date to talk about it again. Nothing will kill the relationship faster than failure to follow through on your commitments.
d) Check up on your goals
Finally, you started your business for a reason. During your monthly checkup, pull out your list of goals and make sure you’re still on track. Now’s the time to assess if you’ve made decisions that have moved your company in the wrong direction. If you’re doing well, note and celebrate your successes.
It’s your business, and you’re ultimately in control. The important thing is that you’re satisfied with what you’re building and how you’re building it. If not, start moving in a different direction to create a successful business.
Quick reminder: If you own a small business, you can get a quote for small business insurance in about 5 minutes. It’s all easy and online.