Starting a Business

If you’re ready to turn your business idea into a real-life company, you might be overwhelmed by so many variables and tasks required to get your new enterprise off the ground. However, there’s no reason to lose track of these tasks. Instead, you can create a checklist of each step so that you don’t forget anything.

Or, you can use this 10-point checklist we’ve developed. Here are the 10 steps to launching a new business.

 

Validate Your Idea With a Business Plan

Before you invest too much time, energy, and money into your business, you should set yourself up for success. The best way to determine your potential is to measure the demand for your products and develop a unique value proposition (UVP).

A business plan allows you to curate this information into a single document. Standard business plans are often up to 10 pages long or more. While a comprehensive document is helpful, you should also create a one-page outline. The primary reason to make your plan a single page is to make it easier to digest for lenders and investors. Also, making it one page forces you to condense your ideas and streamline your thought process.

So, what’s in a business plan? Here are the core elements:

  • Executive Summary – A short blurb that outlines your business and how it will be successful. You should include some facts about the founder, administrative team, location, and your UVP.
  • Company Description – This section dives deeper into your company and how it will operate. Focus on the demand for your products and the problems you’re solving. Also, reiterate your UVP and how you plan to promote it.
  • Market Analysis – Here is where you can outline the demand for your products or services and the market share you hope to capture. Also, is there room for growth, and what does the competition look like?
  • Organization – This section outlines how your company is organized and who’s in charge.
  • Products and Services – Describe your products or services in one or two sentences. Also, describe how these items will help solve your customer’s problems.

 

Determine Your Budget and Financing Needs

As a business owner, you need to get good at determining your cash flow and whether it’s positive or negative. Cash flow looks at how much money is coming in and how much is going out. Earnings come from sales, and costs can go toward many expenses. Some examples can include:

  • Rent and Utilities
  • Payroll
  • Supplies
  • Inventory
  • Equipment Maintenance
  • Waste (i.e., lost product)

Budgeting also affects your prices. You need to figure out your profit margin before you launch so that it’s easier to tell if you’re making money or not. For example, if your profit margin on a single item is 10 percent, how many products must you sell for that figure to be accurate? If the number is 100 per week, you can immediately tell if you’re making money.

You want to dial all of this in before you launch your business so that you’re not catching up after the fact. Realistically, you may be able to take care of day-to-day accounting practices, but you should hire professionals to balance your books and determine your tax burden.

Developing your accounting system now is also helpful for showing lenders that you know what you’re doing. Chances are you don’t have sufficient capital already, so you might have to borrow from a bank or seek investors. Either way, lenders want to make sure you’re a good investment. Now is also the time to determine how much money you need.

What can also help you secure financing is to create a financial projection for the next five years. Look at similar competing businesses and rely on your market research to help you quantify your forecasts. From there, it’s much easier for lenders to determine if you’ll be successful or not.

 

Get Necessary Licenses and Permits

No matter where your business is based, you’ll need to secure various licenses and permits to operate legally. Be sure to consider these costs when developing your business plan. Some standard licenses include:

  • Seller’s Permit – You’ll need this document to sell products to customers, including food.
  • Liquor License – There are two license options: one for selling hard liquor and another for selling beer and wine. As a rule, hard liquor licenses are much more expensive.
  • Health Inspection – If you’re selling food, you must verify that you’re following health codes and protocols.
  • General Business License – Almost all states require new companies to file for a business license to do anything.

Also, keep in mind that some permits need annual renewal while others are a one-time registration.

 

Register Your Business Entity

When coming up with your business plan, you need to figure out what kind of company you’ll be forming. There are four primary options, and each one has its pros and cons. Let’s break them down:

  • Sole Proprietorship – In this case, you’re both the owner and the company’s only employee. Sole proprietorships are easy to start and cost-effective, but they have a few drawbacks. First, your personal finances may be tied to your business, meaning you’re on the hook for any company debts. Second, you can’t hire any employees.
  • Partnership – This option works well if you’re going into business with someone else. However, you must draft a partnership agreement that outlines what each partner brings to the business and their role in the company. This agreement also outlines profit-sharing percentages and the procedure for buying out a partner.
  • Limited Liability Company (LLC) – Most businesses are LLCs because this entity type is easy to form and affordable. LLCs are better than sole proprietorships because you won’t be liable for company debts and obligations. Also, a single owner or multiple partners can form an LLC. As with a partnership, you have to draft an operating agreement that outlines duties, financial stakes, and more. LLCs also offer “pass-through” earnings, so you don’t get taxed twice for your income.
  • Corporation – This option is best if you want your company to be a completely separate entity and not tied to anyone. S-corporations have pass-through income, while C-corporations don’t. With the latter, any business income gets taxed, then your personal salary gets taxed separately. Corporations are harder to form and cost more to set up.

 

Get Your Suppliers in Place (If Applicable)

Depending on your business model, you may have to source supplies or ingredients from different vendors. For example, if you’re selling organic food dishes, you have to buy ingredients from a restaurant supply store or a local farm.

Since you haven’t launched your business yet, you have to convince these vendors to take a chance on your brand. Here is where a one-page business plan can also come in handy. If necessary, you might have to pay for your first orders upfront. After you build some trust, you can often move to 30 or 60-day repayment terms.

When finding vendors and suppliers, be sure to check references and verify the quality of the products. Also, ask lots of questions, such as:

  • What happens if an item is out of stock or unavailable?
  • What about rush orders or last-minute delivery changes?
  • What days and times can products be delivered?
  • Does someone have to sign for each delivery, or can you set up automatic drops?
  • Can the supplier scale up to meet demand if your business grows?

 

Develop Your Brand Identity

A brand identity is another element that sets you apart from the competition. Basically, think of your business as a person – what do you want people to feel when interacting with your company? Some examples of brand identities include:

  • Authoritative – Customers respect your insight and come to you for information about a topic or industry.
  • Whimsical – Your business is fun and friendly.
  • Innovative – Your brand pushes the envelope and always tries to reach new heights.

 

Set Up Online Assets

These days, all businesses must have an online presence. More consumers rely on online sites like social media and review pages to research a company before buying anything. So, you need to develop your online assets before you launch so that new customers have something upon which to draw their conclusions.

The essential online assets include:

  • Domain Name – Before building your website, make sure your domain isn’t already taken. Ideally, your domain should be the same as your brand, but you might have to get a little creative.
  • Website – Platforms like Wix and WordPress allow you to build a professional website yourself. Alternatively, you can hire an experienced development team to handle each component (i.e., a shopping cart).
  • Social Profiles – The best way to tell if you’ll be successful is if you generate buzz before launching. Set up your social media accounts and start interacting with potential customers. If you can develop a following, you’re sure to hit the ground running.

 

Create a Marketing Plan

Now that you have your brand identity and online assets created, it’s time to determine how you’ll promote your business. Marketing is an essential component because it allows you to build brand awareness and increase your market share. When coming up with a plan, be sure to include these elements:

  • Logo and Brand Assets – Online logo makers allow you to generate professional designs in minutes using artificial intelligence. Other brand assets (i.e., a slogan or mascot) can come in handy when developing new marketing campaigns.
  • Specific Goals – While higher sales may be the overall objective, each campaign should have clear and measurable goals. For example, getting 100 people to subscribe to your email list in a month.
  • Multi-Channel Promotion – You can market your business in multiple ways, including SEO, social media, print advertising, etc. Be sure to know how each channel works and the type of content that will reach your audience directly.
  • Customer Avatars – The best way to market to your target audience is to know them inside and out. A customer avatar is a specific person with problems that your product can solve.

 

Hire Essential Staff

Even if you’re a small business, you’ll likely need employees to handle various aspects of your operation. There just aren’t enough hours in the day for you to handle it all.

One way to save money upfront is to hire independent contractors. However, if you want stability and long-term success, you’ll need some salaried employees as well. Employees are more loyal to the company because they can reap better rewards, such as medical benefits and paid time off.

Before hiring anyone, though, be sure to create these elements:

  • Job Description – Make the parameters specific yet open-ended. Also, don’t put too many tasks or responsibilities on one person.
  • Hierarchy – Where does everyone fit within the company? Who do employees report to, and so on?
  • Training and Advancement – How will you train each employee, and are there opportunities for higher-paying positions? For example, if an employee gets trained on multiple tasks, can they get a raise?

 

Get the Tools You Need to Operate

Finally, you’ll need various equipment and machinery to run your business. Even if you only need an office printer and copier, you have to figure out where to get it.

One element to remember is that it’s often better to invest in high-quality equipment than to try and save a few bucks up front. Buying cheap or used machinery can save some money immediately, but you’ll spend more in the long run.

Before buying anything, write down a list of must-haves and “want-to-haves.” Start with the former list and add anything from the latter list as your business grows.

Overall, if you follow this checklist, you should be well on your way to building a strong and robust business. Even though there are plenty of obstacles along the way, you’re now prepared to face and overcome them.