The amount of information you have to learn when starting a business is overwhelming. Researching, categorizing, and organizing take long hours and can result in frustration and exhaustion.
It’s hard to start a business without making mistakes. Thankfully, most of them have already been made by others. By using the checklist below, you can avoid foolish errors and organize the process better.
- Do The Research
You probably think you’ve got everything covered but you’ve probably missed a few points. Get them checked off before proceeding further.
Research The Idea:
- What exactly are you selling?
- What is the demand for this product?
- Is the market saturated/under saturated?
- What are the costs of advertising, production, sales, and delivery?
- What laws do you need to know to ensure the business is legal?
- Will you face patent and trademark restrictions?
Research The Competition:
- What are their strong sides?
- What are their weaknesses?
- How many competitors are there?
- Do you have sufficient resources to compete with them?
Research Your Clients/Customers
- Is your target audience local or international?
- Have you collected the maximum demographic data?
- Can you reach the target audience easily?
- Think Of A Business Name
Creating a name for your business seems like a fun part. However, it’s much harder than you might think. You need to consider the following points in order to choose the ideal name.A business name should:
- Be unique and easy to remember
- Contain no unusual spelling
- Be easy to spell and pronounce
- Be as short as possible
- Make sense
- Be related to the nature of the business
- Have a domain name with a common suffix, such as .com.
- Not limit your business development/growth
Get feedback on the name from anyone other than your friends and family members. Don’t forget to do a trademark search.
- Create a Company Logo
Creating a company logo is a fun job as long as you have some design skills. Finding someone to do the design for you can cost you a substantial amount of money that startups usually don’t have.
Consider hiring a freelancer to do the design or set up a logo design contest, where you would choose a winner and give him or her a prize. Alternatively, you can find websites where you can create a logo on your own.
- Come Up With A Business Plan
A business plan is a compulsory part of the startup process since you need it to get financing from banks, investors, etc. People, who invest money in your idea, should see a clear path of how you are planning to earn profits. The business plan should include:
- Overview of the business
- Who you are
- What you sell/offer
- Who the target audience is
- Marketing and sales strategy
- Your team credentials
- Your business premises
- Your IT
- Financial forecast
In case you don’t need financing for your business, write a plan anyway. It can help you with organizing the process and checking the progress.
- Determine the Ideal Legal Structure
There are four common legal structures with regards to the formation of a company:
- Sole proprietorship– the simplest structure that over 70 % of startups in the USA choose these days. One person holds the responsibility for the expenses and debts. The same person gets all the profits.
- Partnership– The business has two or more owners. In a general partnership, all expenses and profits are shared equally. In a limited partnership, one person controls all the operations and the other (others) contribute to the business function and receive part of the profits.
- Limited Liability Company– the company has owners, partners, and shareholders. They can limit their liabilities while taking advantage of tax reductions and benefits of a partnership. All members of the LLC are protected from personal liabilities in the case of a business debt.
- Corporation – this is a business legally separated from the owners. It can exercise its legal rights as a separate entity. There are different types of corporations (C, S, and more).
- Set Up a Business Bank Account
As soon as you are done with the company registration, you need to create a business bank account for the proper management of your finances.
Using a personal bank account for business matters can lead to mistakes and mix-ups. Even if your business is tiny and can fit into your personal bank account today, it will grow in the future.
- Get Financing
Financing is the most important step toward starting your own business. Even the smallest companies require big startup expenses. Here are a few common ways to finance your company:
- Bank loan
- Credit card
- Your savings
- Small business administration loans
- Loans from friends or family
- Find Premises
You can start operating your business from your home but eventually, it will become a hassle. For some businesses, such as an auto repair shop or bakery, you need premises from the very beginning. Allow yourself some time to look for the perfect location.
- Evaluate the size.
- Check the location (should be accessible to your target audience).
- Consider lease, license vs ownership.
- Ask for recommendations from other business owners.
- Get Proper Licenses and Permits
Evaluate your business and talk to the competition to find out what licenses and permits you may need to operate legally. Make sure you don’t go to the next steps before you finish this one. Otherwise, you may run into legal trouble.
- Consider Business Insurance
Insuring your business, just like your life, property, and car, is highly important. Depending on the type of your business, you can choose among different insurance policies.
- Commercial auto
- Workers compensation
- Professional liability
- Pollution liability
- Excess causalities
- And many more
- Look For Suppliers and Manufacturers
Don’t hurry when you look for people who’ll supply and manufacture the products you sell. In many cases, low prices result in low-quality products. Make sure to test the materials/products before purchase. Always ask for production timetables.Register your business for VAT before dealing with international suppliers.
- Create A Website And Social Media Accounts
Today, a website and social media accounts are a compulsory part of your business. Before creating your own, look at what the competition has done. The website should be fast, easy to access and intuitive to navigate. The website content should be suitable for SEO to promote marketing efforts.
Social media accounts are also vital for marketing and identifying your target audience. Keeping the accounts active with new and viral posts will attract potential customers.
- Set Up A Business Address
No matter which business structure you choose or how big your company is, you need a business address for customers and other contacts. For most business types, all you need is a customer return address.
In case your startup is a limited liability company, you need an office address for the business as well as a service address for top management and an address for customer returns. It’s possible to use just one address for all these purposes. However, as the company grows, it may make sense to create more addresses.
- Look Into Labeling
If you are selling goods, you need to start by ordering the right labels. The label should include the cost, the quantity, and measurements of the products. There are special labeling rules for different product categories. You need to pay special attention to labeling if you sell food or children’s items. Improper labeling is a criminal offense.
- Research Packaging
The first impression you make on a customer is with the packaging. Especially if you are selling luxury items. Special attention should be paid to packaging perishable items, such as food or drinks. Certain laws apply to packaging medicines. Make it a rule to research packaging carefully for each item you sell.
- Choose A Delivery Service
In case you are planning to mail your items within your country or abroad, you need a reliable delivery service. Research the prices of each courier company and read the reviews. Depending on the delivery cost, you’ll be including this in the price of your products.
- Set Up A Return Policy
A good return policy is an indication of a respectable business. Look at what the competitors do for their return policies. Read the law about refunds. In most cases, the customer should be able to get a refund within 30 days of the purchase.
- Create a Marketing Plan
A good marketing plan is a key to your company’s success. You may want to hire a marketing professional to do the job in order to let you deal with other issues. Pay special attention to online marketing, which is the key to the success of any 21st-century business.
- Deal With Your Taxes
Paying taxes is vital to keeping your business afloat. Timely company registration with tax authorities can keep you from incurring problems in the future. Depending on the type of your business, you may need to register for different taxes. Consider hiring an accountant or a consultant to keep all these registration and taxation matters under control.