Starting a new business can be incredibly fulfilling, giving you the opportunity to create something from scratch. But it can also be risky and tough because you’re just beginning to feel your way around a specific market. With so many fledgeling businesses failing these days, it pays to do things right from the very first step. Although this may not guarantee success, it will reduce your chances of failing.
With a startup, you will have numerous concerns and issues to resolve. The legal and financial requirements, not to mention the critical decisions you have to make, can leave you overwhelmed.
With such a long to-do list, it can be easy for you to miss an essential step, which will take more time to rectify. Having reminders on hand can prevent this. To help you get more organized with your startup efforts, here’s a checklist that you can use as a reference.
1. Check the viability of your business
Make an honest assessment of the product or service that your startup is providing. Is it something that customers need and want that they will willingly pay for? You will have to consider competition as well, and determine if you can get a fair share of the market.
You can make more informed decisions by:
- Researching online and reading books, industry reports, newspapers, and journals pertaining to your target market.
- Visiting competitors’ stores and checking out the number of customers, or accessing their websites to see what marketing and sales techniques they use.
- Getting honest feedback from friends, family members, potential customer, and store owners.
- Identifying who your target customer is. Based on your research, create a profile that includes characteristics such as age, income level, family status, interests & hobbies, and shopping habits.
There’s no point in starting a business that won’t generate any profit for you. Make your cost and revenue estimates as realistic as possible.
2. Draw up a plan
Many aspiring entrepreneurs forego writing a business plan, thinking that it’s not necessary. Although there are businesses that have succeeded even without a business plan, statistics prove that new companies with business plans have better chances of obtaining loans, acquiring investment capital, and achieving growth.
A business plan is a strategic way to translate your ideas into more concrete terms. With it, you can describe your business goals for the next three to five years and how you’re going to accomplish these.
3. Find funding
Every business needs money, including yours. The amount depends on what kind of business you will be putting up.
If the business is small with no employees and no overhead expense, you can start operating with as little as ten thousand dollars. For a more complex venture like developing and trademarking an app, a starting capital between fifty to a hundred thousand dollars would sufficiently cover development and marketing costs.
Your business plan will give you a clearer picture of the cost of doing business. You may realize, however, that you need more than you initially thought. In this case, you have to think about raising the needed money. The funds can come from your pocket or identified investors. Potential investors can be:
- Angel investors – These are wealthy individuals who provide capital to startups in exchange for a share of ownership in the business. Some investors also provide entrepreneurs with valuable market advice.
- Venture capitalists – These are persons or firms that finance startups. They prefer funding companies in the technology, healthcare, and pharmaceutical niches since these have the potential for higher returns.
- Family members
4. Get your family’s support
Getting your family’s support doesn’t have to be monetary. They don’t need to be directly involved either. However, you have to keep them informed about the business. Holding regular family meetings will not only give you the opportunity to give them updates but also openly discuss each other’s expectations.
You also have to manage your time wisely. Building a startup will undoubtedly keep you busy, but you still have to accommodate family holidays and activities into your schedule. Devoting all of your time for the business and leaving none for your spouse and kids can create resentment.
Building a startup is challenging enough as it is, and you don’t want to add to the stress with resistance from those closest to you.
5. Pick a name
Unless you already have one selected, put effort into researching a business name. Make sure that no other business has a similar name and your future clients should easily recall it.
6. Decide on a legal structure
You can structure your startup to be a:
- Sole proprietorship – Only one person owns and operates the business. If you’re planning to work alone, pick this type.
- Partnership – The company is owned and managed by more than one individual.
- Corporation – A business entity that is entirely separate from its owners, the shareholders. Forming a corporation involves a more complicated process and also subject to more regulations than a sole proprietorship or partnership.
- Limited liability company – With an LLC, you can operate your business as a sole proprietor but will have the limited liability protection of a corporation.
Each type of structure has its own tax and legal requirements; hence, it’s advisable to consult with a lawyer and an accountant before registering your business.
7. Get an EIN
An EIN is a unique number that is assigned to a business. You are going to need an employer identification number if you plan to hire employees. You will also use it for opening a business bank account and filing tax returns. All partnerships and corporations, as well as some sole proprietorships, are required to get an EIN.
8. Apply for permits and licenses
A business license authorizes you to do business in a specific locality. It is a must even if your company is home based. You may have to apply for other licenses and permits, depending on your location and the type of business you will operate. Your city and state may require different licenses, and you have to comply with these to run a legitimate business. Some products, like liquor and firearms, will need special permits.
9. Get insured
Insurance can protect your business against financial losses when unforeseen events occur. There are decent insurance packages that offer sufficient business coverage for a few hundred dollars a year.
10. Build a website
Building your brand will be so much easier if you have an online presence. First off, you have to register a domain name that matches the business name you decided on.
Create your website as early as possible and don’t wait until your business’ opening day. The sooner you start promoting your product or service, the faster you’ll see revenues pouring in. Millions of people shop online, and you would want them to know what you’re offering. Even if you haven’t begun operating yet, you can start booking appointments or taking orders.
Aside from the website, take advantage of available social media platforms to expand your digital presence further. Considering the number of people on social media these days, connecting with customers is more convenient when done via these platforms.
Launching a startup is far from being a walk in the park. Being new in the business, expect obstacles to come your way. However, don’t let the bumps on the road discourage you. When things don’t go your way, continue to push ahead. The difficulties you meet today will help mold you into a better entrepreneur tomorrow.