Deciding to start a business can be both exciting and scary. You’ve got a product or service that you’re confident will succeed in your market, but bringing that idea to life can be a long, complicated process, with a lot of roadblocks. Knowing the right steps to take to move forward can be challenging, and missing a step can set you back. We’ve created a business startup checklist to help guide you through the process to ensure your business gets up and running smoothly.
1. Select a name and business structure for your company
This is one of the fun parts – choosing a name for your company. But before you decide on a permanent name, think about the long-term ramifications of the name you choose. Does it make sense and tell your target audience what your company does and who it is? Pick a name that you can be proud of and that will stand the test of time. You’ll also want to research and make sure the name you pick isn’t already in use.
2. Formulate a business plan
Now is the time to prepare a preliminary business plan. Don’t worry, this is an informal document that you aren’t bound to forever. But writing a business plan with the company’s goals, standard practices, operating procedures, etc., will help set a course for the company and keep you on a path to success.
3. Obtain an EIN
An EIN is a Federal Employer Identification Number that companies must obtain from the IRS in order to do tasks like opening a bank account and processing payroll. Think of it as a business’s social security number. To obtain one, simply go to the IRS website and follow the steps.
4. Open a business bank account
To keep your personal finances and your business’s finances separate, you’ll want to open a separate business checking account, as well as open a business credit card to pay for various expenses, including product. Most banks require an EIN to open a business bank account. Research banks in your area to find one that meets your business’s needs.
5. Obtain necessary licenses and permits
Depending on the type of business you start, you may need to obtain certain business licenses and/or permits to ensure you’re operating legally. Most businesses do not require a federal permit, however, some do, including investment advising, ground transportation, selling alcohol, tobacco or firearms, and drug manufacturing among others.
A state license is often required for businesses like banks, insurance companies, accountants, real estate agents, and doctors, to name a few.
Other types of licenses and permits may be needed, so it’s best to check with your state and local governments to ensure you have the proper documentation needed to operate.
6. Obtain business insurance
This can vary by both business industry and type of business, so a little research will be required on your part. In general, there are many different types, but in simplest form, they’re usually called either general business insurance or a business owner’s policy. This type of insurance can cover anything from your company vehicle to product liability.
7. Set up accounting and record-keeping systems
Organization and record keeping are important business practices that help ensure a smooth-operating machine. You’ll want to develop and implement procedures for recording things like disbursements, payments received, invoices, and accounts payable/receivable. Employ a streamlined system for paying taxes, paying employees, paying bills, and maintaining permits and licenses. Setting up a good system now will save time, effort, and stress going forward.
8. Determine your business’s location
Do you plan on operating out of your home? If so, you’ll need to check your community’s zoning requirements to see if it is legal to do so. Or perhaps you want to lease office or retail space. Don’t forget to factor in other expenses associated with office space, including office equipment and furniture, utilities, and office supplies.
9. Identity and Marketing
You came up with a brilliant business idea, formulated a winning business plan, and taken care of all the legalities of starting your business, but that’s only half the battle. You still need to get your name and identity out there. This is when you’ll want to craft your brand and marketing strategy, including having business cards and letterhead made, and possibly a snazzy logo for your brand. This helps make your business look professional, established, and trustworthy.
You’ll also want to establish an online presence through a website and social media channels. Obtain the domain name for your company and create a website, then set-up social media platforms like Twitter, Facebook, LinkedIn, Instagram, and Yelp. These social media sites are a great way to promote your business and best of all, they’re free!