Business Startup Checklist – A List of things needed to Start a Business
Congrats, you have a great business idea and are interested in starting a business!
If you are looking to find out what starting a business requires, you’ve come to the right place.
In this post we are going to share a step by step business startup checklist to help you set your business up for success.
We know that certain tasks like creating a logo and choosing a business name are obvious, so we won’t get into those details as much.
Instead, this business checklist is going to cover the important steps like registering your business, applying for the appropriate licenses and permits, and how to obtain funding to get your new business off the ground financially.
Let’s get started!
Here is our Business Startup Checklist – A List of things needed to Start a Business
Write a Business Plan
Refine your idea and answer the question “why” – why are you embarking on this particular business venture or niche?
Do a quick search for existing companies in your chosen industry and learn what the leaders in this same industry are doing so that you can do it better.
You should always be aware of your competitors so that you know how to enter the market and be competitive.
Answering these questions will help with your marketing strategy and brand identity.
A business plan should answer the following questions:
- What is the purpose of your business?
- Who is your target customer or target audience and potential customers?
- Who will buy your product or service?
- Can you identify the demand for your product or service?
- What are the opportunities and limitations?
- What are your goals?
- How will you obtain startup financing?
- What are your startup expenses?
Writing a business plan helps you answer these questions and identify any areas that may need more attention or market research information on your target market.
Choose a Business Name and Legal Structure
If you don’t already have a business name, you will want to create one.
There are some business naming resources that you can use like Domain Name Search from MyCompany Works.
This helps you identify available domain names before you register which can be helpful in determining general name availability.
When selecting a legal structure for your business entity, you have a few different choices:
- Sole Proprietorship – this is for business owners who plan on doing business entirely by themselves and plan on being responsible for all debts and obligations of the business.
- LLC (limited liability company) – this is perhaps the most popular business structure and for good reason. LLC’s provide liability protection and tax benefits. Learn more here.
- Partnership – two or more people are help personally liable as business owners. Great for businesses with more than one founder.
- Corporation – if you want to separate your personal liability from your company’s liability, you may want to consider forming one of several types of corporations (S corporation, C corporation, B corporation). Although each type of corporation is subject to different guidelines, this type of legal structure generally makes a business a separate entity from its owners, and, therefore, corporations can own property, assume liability, pay taxes, enter contracts, sue and be sued like any other individual.
- Non Profit – a nonprofit corporation is any legal entity which has been incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders.
The most popular choice for entrepreneurs and small businesses is an LLC.
LLC’s have a lot of benefits including personal liability protection and some tax benefits as well.
Learn more about Limited Liability Company’s here and see if this is the option that is best for your startup.
If you aren’t sure which business structure to choose, you should consider speaking to an attorney or tax professional and they can help you decide.
Most of these formation services also include a registered agent service for free with a business formation.
Business formation services can also help you decide and help you setup your business from start to finish.
They also offer legal advice and tax advice.
Register a Domain Name for your Business Website
Having a website is actually very important for your business.
From building credibility with customers to capturing leads and web visitors, your website should be an accurate representation of your company.
And even more than just that, it should be a powerful money making machine that brings you leads and new customers.
Even if you don’t get your website up and running from day one, you will want to at least register a Domain Name that matches the name of your business.
This way when you are ready to build your website, your domain name is already secured.
Obtain a Federal Employer Identification Number (EIN)
Corporations, LLC’s, Partnerships, and Sole Proprietorships with employees are all required to apply for a Federal Employer Identification Number (FEIN).
You will need this to open a business bank account or process payroll.
If you use an incorporating service to setup your business entity, they make it easy and will obtain an EIN for you when your business is formed.
Register with the Government
To become an officially recognized business entity, you must register with the government.
Corporations and LLC’s need an “articles of incorporation or articles of organization” document, which includes your business name, business purpose, corporate structure, stock details and other information about your company.
Apply for Business Licenses
- Federal Permits – most businesses do not require a Federal license or permit, however you should double check to make sure you won’t need one.
- State Licenses – building contractors, banks, insurance carriers, physicians, real estate agents, barbers, cosmetologists, are just a few of the occupations that require a state license. You will want to contact your state agency to find out what license requirements there are for your specific occupation.
- State Licenses by Product – liquor, lottery tickets, gasoline, and firearms are examples of products that require specific licensing.
- Sales Tax Permit – if your company will be selling physical products, you may be required to collect a State Seller’s Permit or Resale Permit.
- Business License – the majority of Cities and Counties will require you to obtain a business license, even if you have a home-based business. This license grants your company the authority to do business in that city or county.
Open a Business Bank Account
If you are not already making money, you soon will and you will need to have a business bank account.
You will want to open a business bank account with a bank that can meet your businesses needs.
These needs might include online bill pay, money transfers, wire transfers, etc.
Consider Funding Options
Startup capital for your business can come from a variety of means.
The best way to acquire funding for your business depends on several factors, including creditworthiness, the amount needed and available options.
Funding provides financing options for companies that experience periodic cashflow challenges, seasonal sales cycles, or small businesses that need access to working capital repeatedly for other reasons.
Here are a few funding options to get your started on your funding search:
1. Business loans – If you need financial assistance, a commercial loan through a bank is a good starting point, although these are often difficult to secure. If you are unable to take out a bank loan, you can apply for a small business loan through the Small Business Administration( SBA) or an alternative lender.
2. Business grants – Business grants are similar to loans; however, they do not need to be paid back. Business grants are typically very competitive, and come with stipulations that the business must meet to be considered. When trying to secure a small business grant, look for ones that are uniquely specific to your situation. Options include minority-owned business grants, grants for women-owned businesses and government grants.
3. Investors – Startups requiring significant funding upfront may want to bring on an investor. Investors can provide several million dollars or more to a fledgling company, with the expectation that the backers will have a hands-on role in running your business.
4. Crowdfunding – Alternatively, you could launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers. Crowdfunding has helped numerous companies in recent years, and there are dozens of reliable crowdfunding platforms designed for different types of businesses.
5. Business line of credit or Business Credit Card – A business line of credit or business credit card gives your business access to cash on demand, over and over again. If you are not able to secure a grant or loan, lines of credits or business credit cards might be a better option. There are both secured lines of credit or unsecured lines of credit options.
Getting some startup funding will help with any cash flow issues that you may have when initially starting your business.
Starting a business can have some larger initial startup costs and as a small business owner, obtaining some startup funding or financing can help you meet your initial financial needs such as capital, payroll, inventory, etc.
Depending on your type of business, you may want to consider an Insurance Policy.
Although there are several types of business insurance you should consider, there are a few basic insurances that most small businesses can benefit from.
For example, if your business will have employees, you will, at a minimum, need to purchase workers’ compensation and unemployment insurance.
You may also need other types of coverage depending on your location and industry, but most small businesses are advised to purchase general liability (GL) insurance, or a business owner’s policy.
GL covers property damage, bodily injury and personal injury to yourself or a third party.
If your business provides a service, you may also want to consider professional liability insurance.
It covers you if you do something wrong or neglect to do something you should have done while operating your business.
Hopefully this business startup checklist will help you get your business up and running!
Once it is up and running you can focus on growing and expanding your business through marketing, building a social media presence, and so on.
While this list is meant to help you get started, it doesn’t give you a guarantee for success.
You will need to overcome obstacles and adapt to changing situations, but with the correct foundation, you are already one step ahead of the game!
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