The first thing I need to tell you is: if you think that starting a small business is a hard task, you are right. You will need to spend lots of efforts and dedicate all your time to that startup. A rare project became successful and profitable from the first day after launch, so probably there will be a long journey to the top ahead of you. It is even possible that you will never succeed.
The second thing you need to know (and it is more important than the first one): starting a new business template is not impossible. It is not even an epic feat (yeah, it is far from the Argonauts trip for the Golden Fleece, deal with it). As a significant number of other businessmen, you can start a small business and grow it to a great company that will gain you lots of money and authority. You have to form a consistent plan and don’t miss anything important. And that’s where a business startup checklist will come in handy.
You have an idea, and you think it is divine and will bring you tones of money. I have no doubts that you are a new Steven Jobs, but let’s calm down a little and examine it from all possible angles. Following questions will help you to sculpt your idea more fully and fill possible gaps.
- Will your idea make the world a better place to live?
- What is the problem your idea solves and how painful that problem is?
- Do you have competitors in solving this problem? In what point your idea solves the problem better than the competitors do?
- Is your idea somehow creative or unique? In what way?
- Can you describe your idea in one sentence?
- Why should people want to buy your product or service?
- Will you buy that product or service by yourself?
- Do you know at least ten people who would love to buy your product or service?
- How do you see the development of your idea for the next five years?
When you have full but short answers to these questions, your idea will be entirely forged. Now, having a solid understanding of what are you going to achieve it is time to start setting up a business.
Preparation steps to starting a business
The key to successful business is a wise and prudent strategy. Before opening the business, you need to perform a set of preparations. The following checklist is the first milestone on the way to give a detailed answer to “how to start a small business?” question.
Research the market
Only the cure for cancer won’t need any advertising or marketing. Other product and services need to be served appropriately. You need to: know what the latest trends in design are; examine the platforms to understand where to put the ads, and research your audience to know it intimately. To win the battle, you need to know the battlefield.
Know your competitors
It is cool to be the only one to offer a specific product or service, but such a situation is infrequent. In most cases you need to deal with competitors, so analyze them. You will need to be original and step out of the line to make customers see you, and that is impossible if you don’t know the common state of your niche.
Evaluate your product
To gain some profit, you will need to gain more money than product or service producing will cost. That’s why you need to investigate how much will it cost to create the product and what are the other prices on the market. Customers won’t buy costly stuff and, what’s more surprising, they won’t buy the cheapest ones too. You also have to ask yourself what you need to start a business and how much that will cost. That money-loss should also lay into the products or services price.
Mark your team
Every team member should clearly understand what their responsibility will be and what you expect them to do. If there are some co-owners of your company, define and tell them what you want them to do. It will be tough for you to do everything alone, so prepare your people to help you.
Write a business plan
That is one of the first steps to start a business. You will need a business plan not only to check your progress and understand where to develop your company. If you are going to ask for money from some investors, a business plan will be the primary document. Here is a detailed article about writing a business plan.
Solve the money problem
Some business people launch business startups without external financing. Maybe you saved money for years to start a small business, or you took a credit in the bank. The other popular way to get money is to ask from investors or set a crowdfunding campaign. No matter what way of gathering starting money you choose, make sure you understand where it came from (and when do you have to pay it off) and whether that is enough for the first month/quarter/year.
Pick a company name
A name has to catch the customer. It has to stick in their head, interest them and make them come back when they need something you can give them. Think carefully what name you are going to use; check if it is not already used by someone else, and ask your friends’ opinion about it. It could either rocket your company to the sky or make starting a small business a complete failure.
Chose company’s legal structure
There are four types of structure you can choose from – a sole proprietorship, partnership, limited liability company and corporation (or S-corporation). When opening a small business, it is one of the first and most important things to do. The business entity will define the complexity of registering and maintaining the company. There is an understandable and detailed description of all business entity types in this article.
Legalize as a taxpayer
If you are going to start a new business in the United States, you need to register an Employer Identification Number (EIN). It is one of the legal requirements for starting a small business and will make paying taxes easier and safer for you. You will also need this business tax ID to open your company’s bank account. EIN is entirely free, and you will be able to register it online, without going anywhere. Other countries use a National Identification Number (NIN) instead of EIN. This Wikipedia article lists all the countries that use NIN.
Open a bank account
When launching a business startup, it would seem easier to use your personal bank account for transactions. However, later, when your business grows, it will be tough to change the account. So, do it from the start when the efforts aren’t so sufficient.
Take care of licenses
Some types of activity demand a license. A list of those activities can differ according to the state and country, but generic drug manufacturing, alcohol and tobacco production and selling, lawyer services and investment advising needs a license in any place. If your business is located in the US then you can use SBA service to see if your activity needs permissions.
Get yourself business cards
Don’t underestimate the power of a simple piece of paper with your short data on it. Setting up a business means a lot of networking. When building connections with another businessman it is essential to leave a good first impression about yourself. A business card is one of the features that will show your potential partners you are someone worth dealing with.
Build a website
Modern business can’t avoid creating a website. You can argue and tell that there are lots of people who know how to open a small business without going to the internet, so I’ll be more precise. To gain impressive success, a modern company can’t avoid creating a website. People spend a considerable amount of time on the web, so your company platform will be a perfect tool to increase your authority and trustworthiness (in case you put some efforts to make it visible). If you have a big budget, you can hire a web developer to build a site for you, but it is easy to create it by yourself and don’t pay a single dollar. With our Building a WordPress Website Brick by Brick guide, you will be able to make a website in a few hours.
Go to the social media
A group in the Facebook, an account in Instagram, a channel in Twitter or YouTube – those are tools you can’t ignore. People spend hours on social media, reading posts, watching the video and sharing pictures. Social media marketing is extremely efficient and starting a small business needs all the promotion possible. We researched this theme and gathered top 22 SMM solutions for small businessand even create an eBook about social media branding.
If I’d ever asked myself, “how do I start a business?”, the answer would have been, “on the internet.” Such a business doesn’t need real space, staff, and additional furniture. Only a good PC and something to sell. A significant number of companies exist online-only and are successful. Just look at Facebook. They have offices and employees, but everything the company does is on the internet. Here are a few points you have to take into consideration when starting a new business online.
Hire a web developer or get a professional template
If the website is only a platform for the company that makes the sales offline, choose an ordinary design and simple functionality. When a website isn’t your primary source of income, it can be nice. However, if your business is built online-only, you can’t afford a mediocre website. There are dozens of website templates for, literally, every type of company and every taste. Take a look at those 25 premium templates, don’t you agree they look marvellous? Every professional invests money to have best tools possible. A professionally drafted website is your tool, so make it impressive.
Secure your data
Nobody can truthfully say that his website is completely safe from hackers (except blockchain, nobody managed to break it yet). However, it is still wise to implement some security measures. Who knows, maybe your hacker won’t be able to find another way to harm you? Besides that, your website could break because of your own mistakes, so you should do the backups regularly. To make sure you do everything possible to make the website safe go through our How to Handle WordPress Security Riskschecklist.
I admire the people who managed to organize a successful offline business (hope that doesn’t sound nerdy, I’m not a web lunatic), that is hard work. There are so many details you have to keep in mind and so many problems you have to solve when starting a new business offline that it will take a separate article to mention all of them. Let’s go through the main points that are an absolute must for every brick-and-mortar business.
Rent some space
If you are going to start a retail business, then you can’t rent a place without analyzing the surrounding. Your fashion clothes boutique won’t sell a single dress if you place it in the industrial region or a deserted street. Choose a location according to your business’s needs. And always read the fine print in the rental agreement to avoid problems.
The proverb says that if you want something to be done – do it for yourself. However, you can’t do everything alone. You have to be a strategist for your company and trying to wear too many hats will stop you from developing. Employees that will do the part of the work will give you an opportunity to focus on working out the general business evolution.
Think about insurance
We live in a dangerous world where awful things can happen the time you less expect it. People on Hawaii thought the volcano would never erupt (scientists were also sure about that) and now the whole island burns. Insurance gives a little more confidence, so you should think about buying it.
You started, what now?
When you launch your business startup, the work is not finished. In fact, it only begins. If you want your company to flourish, you will have to spend lots of time in everyday work on constant improvement of your products and services. I gathered this to-do list to give you a clear understanding of what is waiting ahead.
Make your intellectual property safe
First, you have to register a trademark. It will ensure that nobody steals your clients using the same name you do. US citizens could read about it in details on USPTO website. If you created something no one invented before – register a patent. Use copyrights for your texts and pictures. If you reach the success, you will keep all the rights to your products or services.
Do the marketing
People receive so much information every day that it could be compared to the ocean. The opening of your small business will go unnoticed if you don’t attract your audience’s attention. You need to learn the art of advertising and promotion to make your brand visible. Try different types of online and offline ads; the combination will be more efficient than partial actions.
Of course, I don’t mean you have to hire more people or rent a bigger place. If you don’t show progress, you start to regress. You have to remember that your competitors improve their products and services all the time and when you stop developing your company you start to lose in this run. Learn new trends, invent new tricks – your success is in your hands.