What to Include in Your Startup Checklist
Coming up with a great idea for a startup company is unique to most individual entrepreneurs, but a startup checklist is (or should be) similar for everyone. What are some "must-have" elements of any effective business strategy? Certain processes must be initiated and completed; other to-do action steps should also be followed. Here's a checklist to get you moving from startup idea to reality:
Do a realistic estimate of your anticipated costs. It's impossible to determine down to the last penny what your operating costs will be. But putting together an estimate helps you create a working budget and get a better grasp of where funds should be allocated and in what order. "Depending on the type of business," says finance specialist Tina Hay, costs can include "everything from legal, machinery, equipment, inventory, overhead, and domain name, to web services."
Additional potential expenses include:
- Renting retail space
- Interior or exterior renovations
- Funds to hire employees
- Branding and marketing materials
Be as thorough as possible in itemizing this particular list to avoid surprises later on.
Create a business bank account. It is best practice to not use a personal bank account for your startup. Create separate accounts (for both credit and checking) to better organize your books, record expenses, and keep things orderly when it's time to file business taxes.
Set up a record-keeping system. Speaking of records, research online accounting systems and choose one that seems best tailored for your fledgling business. (Here's a more detailed checklist for getting your business finances and records in order.)
Make sure to get off on the right foot with the IRS. This point cannot be emphasized too strongly—nothing will stop a great startup company in its tracks like a problem with taxes. Choosing the appropriate business structure, understanding tax requirements, and choosing a payroll service will help when it's time to file taxes.
Purchase insurance. The most common varieties of business insurance are commercial property, home-based business insurance, and general and/or product liability. Selecting the most appropriate insurance coverage depends on the type of product or service you intend to sell, as well as any planned need to bring on employees. You may also need to have Workers' Compensation coverage. Consult the appropriate experts for you industry and location, as regulations and requirements vary by state.
Come up with a creative name for your business. Once upon a time, running a business called "Google" or "Zappos" would have been considered business suicide, but not anymore. These days, startups aren't burdened with concocting business names that specifically identify what they do or sell. (Of course, if something imaginative comes to mind along these lines, don't ignore it.) Think hard "about what makes your business stand out from the competition and how you can leverage that in a clever, but straightforward way in your business name."
Take care of legal requirements. It's not particularly glamorous, but adhering to certain legalities (which can differ from state to state) is mandatory. Remember, "everything in business from trademarks and intellectual property protection to contracts with vendors is legal in nature." This also includes obtaining the appropriate permits and licenses, as well as formally registering the name of your new business.
Write a business plan. Inevitably, some elements of this checklist will overlap. For example, your new venture requires a detailed plan that will cover some of the above-mentioned components, but should also include your strategy to launch and maintain the new business. Other aspects of the plan should cover marketing and technology needs, and a method for identifying your target audience, anticipated expenses, and cash-flow scenarios, hiring strategies, etc.
Many plans encompass where the business is likely to be within one year, three years, and five years. The Small Business Administration offers a free business plan tool, noting that a well-crafted plan "helps you to step back and think objectively about the key elements of your business venture and informs your decision-making on a regular basis."
While putting together a startup checklist may seem daunting, once you've checked off the items on that list, you'll feel primed and ready to move ahead. Plus, you'll get a healthy head start on competitors who fail to attend to the details before launching their product.