Many people at least entertain the idea of throwing their hat into the entrepreneurship ring and joining the nearly 32 million other small business ventures in the US.
Maybe you like the idea of running your own career. On the other hand, maybe it’s a more practical consideration. For some, starting a business is all about generating some extra income as a side hustle.
Whatever your motivation, success depends a great deal on making smart business decisions from the get-go. Keep reading for a new business checklist that will help you make those smart decisions that fuel survival and growth.
Market Research
Market research can mean a couple of different things. For someone thinking about business ownership, though, it typically boils down to a few main concerns. For example, is this a market for this business?
If you’re thinking of opening a restaurant or retail outlet, that means figuring out if there’s interest in the local area and the potential for enough foot traffic. If you’re thinking about a home-based business that depends on internet sales, that means asking whether you can claim enough customers with the current level of competition.
If you’re dealing with a new product that you came up with, the question is more basic. Are there enough people who actually want this thing?
Market research may mean quantitative or qualitative data gathering, such as polls, surveys, or focus groups.
Develop a Business Plan
Think of your business plan as a guiding document. It should lay out key considerations, such as:
- Product or service
- Financial plan
- Management structure
- Basic budget
- Market analysis
- Marketing goals and objectives
If you think you’ll need outside financial support, this plan can prove quite lengthy since it must convince banks or investors that the business has legs.
If you plan on bootstrapping your operation, you should still create a business plan. It might not need as much depth, but it forces you to think through the key considerations.
Business Formation
Business formation is the process where you take the steps that turn your idea into a reality, at least on paper. So, let’s say you settle on an LLC as the type of business structure you want. You must file paperwork to create that LLC.
You typically must file paperwork with the state or potentially the county or city governments. You’ll likely need a business license, again from the state, county, or local government. In a few cases, such as selling firearms, broadcasting businesses, or investing, you may also need a federal permit or license.
In most cases, you’ll want a business lawyer on board to help you file all the necessary forms and applications. Think of it as investing in your business.
Track Your Finances
Far too many new business owners, particularly those running internet-based or home-based businesses, forget about taxes during all the work that goes into launching a new business. Yet, the government will expect you to file taxes every year. Depending on the business, you may owe estimated quarterly tax payments to the IRS.
The only way you can know if you owe taxes either for the quarter or the year is if you have reliable financial records. That means you need a method for bookkeeping. Most small business accounting software packages let you handle both bookkeeping and accounting tasks.
You’ll want some kind of system in place from day one because catching up on a couple of months of bookkeeping is a time-consuming task. Even worse, putting it off means there is more opportunity for you to lose important receipts or simply make errors.
Information Technology
If you were hoping that your small business wouldn’t need the hassles of being online, you should bury that thought before you start. You will need an online presence. That also requires that you deal with information technology on some level.
For most small businesses, this typically just means having a website. You can, of course, host your own site on your own server, but new businesses typically buy a domain name and host it through a major hosting service.
Hosting services offer several tiers of service, but a shared hosting plan usually proves sufficient for your initial website launch. You can always upgrade to a dedicated service if your traffic and profits justify it later.
If you plan on selling products or even running a subscription site, there are additional IT concerns you must address.
You’ll need a payment processing service to handle the transactions for you. Pick a major third-party processor for this to help ensure the security of customer data.
You’ll likely also need some kind of account management features on your site. You can find plugins on most content management systems that simplify this process. Otherwise, you’ll need a web developer to build a custom site for you with the features you want.
Marketing
Marketing doesn’t work on a one-size-fits-all basis. The kind of marketing that works for a video game company won’t generally work for a restaurant. The kind of marketing that freelance graphic artist uses won’t fly for a financial consultant.
Study the way that similar businesses handle their marketing. Where do they do it? How do they do it?
Content marketing, such as blogging and videos, typically see good results for most businesses. Word of mouth marketing also shows good results for almost all businesses. You can encourage word of mouth with referral programs.
Managing Your New Business Checklist
One thing that doesn’t normally show up on a new business checklist that you must keep in mind is a timeline. People who want a new business often rush through the process, ticking boxes as fast as they can. This often means that points on the checklist get shortchanged or only partially complete.
Understand that each point on the checklist will take time. Odds are good that will take more time than you expect. Don’t rush through the checklist.
Looking for more tips on starting your new business. Check out the posts in our Startup section.
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