Starting a small business can be both exciting and overwhelming. To help guide you through the process, I’ve created a comprehensive checklist covering key steps you need to take before launching your venture.
Before you start your business:
- Define Your Business Concept.
a. What products or services will you offer?
b. What business name will you use? - Evaluate Your Business Potential.
a. Estimate monthly revenues
b. Estimate monthly expenses
c. Determine if your business can operate profitably based on revenues and expenses. - Develop Your Business Plan. This may involve writing a formal business plan, or it may involve creating informal lists. Your plan should include:
a. Mission, Vision, and Values
b. Target Customers
c. Marketing Ideas
d. Operational Plan
e. Job Descriptions
f. Pricing Structure
g. Customer Policies
h. Competition Analysis - Choose Your Business Location
a. Will your business be home-based or in a commercial space?
i. If commercial, how much space do you need?
ii. Will you lease space or purchase a space?
iii. Identify the desired space and sign an intent-to-lease agreement. Please make sure you secure ALL necessary financing before signing the lease agreement. - Estimate your start-up costs.
a. Consider the following expenses:
i. Equipment, furnishings, and fixtures
ii. Lease space build-out
iii. Lease and utility deposits
iv. Inventory
v. Insurance deposit
vi. Website and marketing
vii. Legal and professional fees - Determine your financing needs,
a. Total start-up costs minus your personal investment in the business. Then, you should plan to inject 20% or more of that amount into the business.
b. Arrange for your financing needs from investors or lenders.
i. Investors will typically receive some ownership in the business.
ii. Start-up loans require monthly debt repayment, typically for 3 – 7 years, at a rate of interest a few points higher than the prime interest rate.
Licensing and Registration Requirements: - Register your business with your state’s corporation commission.
a. Registering your business gives you exclusive rights to use your business name in the state.
b. Business registration is required for the state in which you will operate.
c. Some business owners register their business in state’s with no state income tax. However, this is generally not a wise idea, as you will still have to register in the state where you operate the business.
d. Remember that you must pay income tax in the state where the income is earned. - Obtain a tax iID number for your business through the IRS portal.
- File an initial beneficial ownership information report with the U.S. Treasury’s Financial Crimes Enforcement Network at fincen.gov/boi
- Write an operating agreement for your business. This establishes ownership.
- Open a business bank account. It is essential to keep business income separate from personal income.
- Complete local requirements for your community, including obtaining a business license and zoning permit.
- If you will sell retail products, you must register with your state’s Department of Taxation to collect and remit retail sales taxes.
a. Creating a sales tax account obligates the owner to file regular sales tax reports.
b. A sales tax account will allow the owner to purchase items for resale tax-free and, likely, at wholesale prices.
c. If you sell exclusively online through a Marketplace Facilitator, such as Etsy or Amazon, they will collect and remit the sales tax for you. You may still need to create an account in order to make wholesale purchases.
Conclusion
Starting a small business is a significant but rewarding journey, and having a clear, organized plan is essential for success. Use this checklist as a practical tool to guide you through each crucial step of the process, from defining your business concept to meeting licensing requirements. By following this checklist, you can ensure that you cover all your bases and set yourself up for a successful launch.
Please print out this checklist and keep it handy as you embark on your business journey. It will be a valuable reference to help you stay on track and manage your tasks effectively.
Get in Touch!
Do you have questions or need further clarification on any of the steps? I’d love to hear from you! Feel free to leave your questions or comments below. Whether you’re looking for more detailed advice or just need some encouragement, I’m here to support you in your small business venture. Don’t hesitate to reach out—your path to success is just a conversation away!
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