There are tons of decisions and tasks to consider before starting your own business, and it is easy to overlook important items along the way. But what if I told you there was a simple checklist you could use to confidently and easily navigate the start-up process? In this video, I'll go over a business start-up checklist that includes everything from developing an effective plan to building your brand and marketing your products or services. Let's dive in.
Download the checklist and follow along
Business Plan
A business plan is a document that explains how a business will operate and be set up before it begins. It is useful for entrepreneurs to guide their startup or to get funding from lenders. The plan generally consists of an executive summary, a marketing section, a team section, and startup costs.
It is important to include a market analysis and target audience to show that you understand your customers, a product description that outlines its features, benefits, and pricing, and operating costs and sales projections to present your business model. By including all these components, you can create a comprehensive business plan that will help you succeed.
Financial Projections
When creating a business plan, small business owners often overlook an important component: financial projections for lenders. These projections help demonstrate to lenders- How much money you need
- How you plan on using it
- How you intend to pay it back
To prepare these projections, there are three basic financial forms to create:
- Income statement which displays your profitability based on revenue and costs
- Balance sheet which shows your assets and liabilities
- Cash flow statement which demonstrates your business's liquidity and whether you have cash on hand to pay bills.
Projections are based on realistic assumptions, such as estimating the number of customers you will have, how much you will pay yourself, and what your expenses will be. By including these projections in your business plan, you can increase your chances of securing funding and achieving success.
Form of Ownership
When starting a business, choosing the right form of ownership is crucial because it will determine what licenses and forms you will need. There are several options- Sole proprietorships
- LLCs
- Corporations
Sole proprietorships are the easiest to form since you may or may not need to file anything for your business name. However, this ease of start-up comes with no liability protection for the owner, meaning the owner is personally responsible for any debts or legal issues that arise.
LLCs, on the other hand, offer liability protection and are fairly easy to start. However, they require a lot of maintenance with taxes and fees.
Corporations have the most liability protection, but tend to be fairly complicated to maintain with compliance filings and tax obligations.
It's important to choose the form of ownership that is best for your business and take into account factors such as the amount of protection you need and the amount of maintenance you're willing to take on. By selecting the appropriate ownership structure for your business, you can ensure that you are meeting legal requirements, protecting your personal assets, and positioning your business for success.
Register the Business Name
After selecting the appropriate ownership structure for your business, the next step is to reserve a business name and form the entity based on your chosen type. When selecting a name for your business, you have several options.You can choose a name based on the business itself, your location, or even get creative. However, it's important to select a name that is easy to understand and doesn't require too much explanation. You want the name to clearly communicate what your business does and what sets it apart from competitors. A clear and concise name can help customers find you more easily and build brand recognition over time.
Once you have selected a name, you will need to reserve it and ensure it is available for use. This can be done through your state's Secretary of State office or a similar entity. By choosing a strong business name that effectively communicates your brand message, you can establish a strong identity for your business and set it up for success.
Licenses and Permits
In order to legally operate a business, you may need to obtain various licenses and permits. These can vary depending on the type of business you are running, your location, and the products or services you offer. For example, you may need a seller permit to sell products, or a business license to operate in a particular city or region.These licenses and permits can be obtained through your local government offices, and failing to obtain the necessary ones can result in fines or legal consequences. It's important to do your research and determine which licenses and permits you need before starting your business to ensure that you are operating legally and avoid any legal issues down the line.
There are also free tools available online that can help you determine which licenses and permits you need for your specific business, so be sure to utilize those resources as well.
Obtain EINs
When it comes to filing taxes for your business, you will need an Employer Identification Number (EIN) from the IRS. This is a unique number assigned to your business for tax purposes. If you are a sole proprietor or have a pass-through entity, such as an LLC, you can also use your Social Security number instead of an EIN. You can apply for an EIN for free through the IRS website, which should take you about 15 minutes to complete. In addition to the federal EIN, some states require a State EIN as well. For example, in California, you can apply for a State EIN for free through the EDD website. Make sure to apply for any necessary EINs to ensure that you are ready to file your taxes and avoid any potential penalties or issues with the IRS.
Business Bank Account
It is always a good idea to have a separate bank account for your business finances to help you accurately track your expenses and monitor your business growth. When looking to set up a business bank account, it's a good starting point to inquire with your current banking institution. They may have options that are tailored to your business needs. However, it's important to review the fees and benefits of the account to ensure that it is the right fit for your business. Don't be afraid to shop around and compare different banks and their offerings to find the best option for you. Remember, having a separate business bank account can make managing your finances easier and provide a clear distinction between your personal and business finances.Domain, Email, and Website
Having a website and email with a domain name is essential for creating a professional image for your business. Your domain name should be short and simple, and preferably include your brand name and relevant keywords. While it may be tempting to go for a catchy name, it's important to make sure it accurately reflects your business. Here are some tips:
- Keep it short and simple
- Use your brand and keywords,
- Consider alternative domain endings.
There are also alternative domain endings to consider, such as .co or .io. If you're not experienced in website design, Google sites is a user-friendly option for creating a professional-looking website.
To create a professional email, you can register a domain and use aliases to create different email addresses. This can be a simple and effective way to enhance your business image.
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