Creating a startup checklist is a crucial step for any business. Your checklist helps you plan for every aspect of the start-up process. While you will likely add your own points to this list, this is a great jumping-off point that will ensure that your start-up is well planned, organized, and meets any legal requirements.
Create Your Business Plan
Your business plan includes the goals and objectives for your business and details what you plan to accomplish. We have discussed the content of your business plan on a separate, dedicated page.
Determine The Type and Ownership Structure of The Business
Once you choose the product or service your startup business will provide, you need to determine the category:
• etail – Sells a product directly to consumers
• Service – Provides a service to consumers
• Manufacturing – Creates a product from raw materials
Additionally, you need to determine the ownership structure (determined by the number of people that own the business):
• Sole Proprietorship – One person is fully liable for all business obligations and entitled to all profits and managerial control
• Partnership – More than one person has the rights highlighted above
• Limited Liability Company (LLC) – A hybrid of a corporation and a partnership
• Corporation – A fictitious legal entity that has duties and rights that are independent of the owners
Obtain Start-Up Financing
What is your source of money? Are you paying out-of-pocket or obtaining loans? If you choose to apply for loans, the process to receive the money can take months, which means you need to start well before you plan to launch your business. In most cases, you will have to present lenders with a business plan prior to your approval for financing.
When it comes to loans for a business, there are four basic types:
• Line of Credit – Issued by a bank; provides funds that you are able to use when needed
• Receivables Financing – A bank provides financing against your revenue
• Inventory Financing – A bank lends money against your actual inventory, which is used as collateral
• Asset-Based Financing – A bank allows you to take out a loan against your assets
Knowing the different types of loans that are available can help you determine which is best for your start-up.
Obtain Your EIN (Employer Identification Number)
Your EIN, also known as the taxpayer identification number, is assigned to partnerships, sole proprietors, estates, corporations, and trusts for tax reporting and filing purposes. This number can be obtained by mail, phone, or online.
Obtain The Proper Business License
Local and state governments in recognition of a company’s legal right to provide products and services issue a business license. You may need multiple licenses and you will need to pay any fee(s) in addition to following these simple steps:
• Find your city and state license assigning office. A list of business license providers for all fifty states is available from the Small Business Administration.
•Obtain a certificate of compliance and occupancy for your building and property signifying that you are following all municipal codes applicable to your business. The certificate verifies adherence to zoning ordinances, signage requirements, and maximum occupancy limits.
• Have the health inspector investigate your business facility. In many states, a health-inspection certification is necessary prior to obtaining a business license. Health inspections also certify cleanliness and quality of production processes.
• Consult federal regulations to determine if you need a federal license. For example, companies that deal with the processing of hazardous materials require licensing from the federal government. Federal business licenses typically indicated compliance with health, safety, and interstate commerce regulations.
Create a Web Presence
If you are truly dedicated to success this is a step you must take or you will miss opportunities to find new customers and create revenue sources. First, create a URL that is simple and easy to remember and then register it. Even if you have not yet completed creation of your product or service, begin to develop content and provide basic information about your business.
Open a Merchant/Business Bank Account
Although it may seem easier to use your personal checkbook to pay for business expenses, this is not a good move. Later on you will have to untangle all of the mess later, which can result in issues as you attempt to determine what a business expense is and what is a personal expense. Open an account dedicated to your startup business.
Develop Marketing Tools
You will need customized business cards, letterheads, and, possibly, brochures. You also need to acquire business forms such as receipts and contracts. Personalized business documents lend credibility to your startup business. You can check on-line sites for business-specific marketing tools.
Purchase Business Insurance
If you are going to be dealing with the public, be sure to purchase the proper type of insurance to reduce your liability. An insurance agent or attorney can help you choose coverage suitable for your startup business.
Don’t be afraid to ask questions from advisors, including your insurance agent, attorney, accountant, and the financial institution providing your financing. You need to prepare yourself for any potential roadblocks and ensure that you begin your business legally and with all the proper materials and licenses in place and ready.
