Business Startup Checklist
Starting a new business can feel overwhelming, even for seasoned entrepreneurs. Fortunately, with organization and planning, running a startup is often financially and personally rewarding, even if the level of success can't be guaranteed.
Entrepreneurs need to address many issues before opening to the public. Creating a business startup checklist is a good idea to ensure you haven't forgotten anything. Below are steps to help you organize your ideas and get your business going.
FindLaw's Starting a Business section has links to additional articles and resources to help new business owners get started. You can find location-specific information by checking out State Resources: Starting a Business.
Test the Waters
Creating a business plan is a good first step when testing a business idea's feasibility. Read up on how to write a business plan. Then, review the business plan outline and begin your market research. You'll want to:
- Identify potential customers
- Conduct a market analysis
- Conduct a competitor analysis
- Create a marketing plan and a social media plan
Create or gather all of the financial documents you will need to demonstrate that your business is financially viable, including:
- A cash flow analysis
- Startup costs
- A break-even analysis to see when your business will likely generate profit
Pick a Name
Brainstorm brand names until you have several names that fit your business. Once you have a few in mind, check if your ideas are available as domain names.
If the names are available as web pages, check to see if your prospective business names are available at the federal and state levels.
- Conduct a trademark search at the federal and state levels. Check the United States Patent and Trademark Office for federal marks and the secretary of state for state marks. If the name you want is already a trademark, determine if your use of the name would cause consumer confusion.
- Ask your county or parish clerk of court's office if anyone has registered any of the names on your list as a fictitious business name ("doing business as," or dba).
- If you are structuring your small business as a sole proprietorship, corporation, or limited liability company, check with your secretary of state to see if any of your proposed names are unavailable.
Your next step is to make the business name official.
Make Your Business Name Official
Register your business name with your state. You should also file for federal and state trademark protection. By this time, secure and register your web domain name. If you want to use a fictitious business name or DBA, register it with your county or parish clerk.
Consider Your Legal Structure
Investigate the different types of business structures. It may be helpful to talk with a small-business attorney or the local office of your Small Business Administration (SBA). Ensure that you have considered the pros and cons of each type of business structure.
If a small-business owner chooses the wrong type of business entity, they may have to close the business and re-open under another name to change it. It's worth ensuring you make the right decision the first time.
Research business structures to determine which one is best for your business. Decide if you'd like to sell stock and how much stock. Figure out how many owners the business will have. If the business has more than one owner, draft an operating agreement or partner agreement.
This is the time to assess your business risks.
Create Your Business Paperwork
Your legal structure determines the type of legal paperwork and documents your business needs.
If you pick a partnership and have another person sharing the profits and losses with you, you need a partnership agreement and buyout/buy-sell agreement. Limited liability companies (LLC) protect the members and owners from most legal liability. LLCs need articles of organization, operating agreement, and buyout/buy-sell agreement.
Corporations can be privately or publicly held. A board of directors governs the corporation by following bylaws. Other documents for corporations include articles of incorporation and buyout/buy-sell agreement.
Secure a Business Location
Your first decision after formation will be whether to rent, buy, or build a business location. Some considerations include evaluating what features your business space requires. Do you need office space for your business? If you have a dropshipping company, you may not need office space to begin.
Know your budget and the maximum rent or mortgage you can afford to be a successful business. Research geographic locations and determine which one is the best fit for your customer base.
Buy Business Insurance
A necessary but often overlooked step is buying business insurance. Call a few insurance agents and explain the insurance needs of your new business. Tell them the type of business, the types of products, the business location, the kinds of liability your business might face, and the numbers and types of employees you will have.
Compare quotes from different companies for different coverage levels based on your business. If your business manufactures dangerous products, buy product liability insurance. E-commerce businesses should buy cyber liability insurance. Service providers should buy errors and omissions insurance (or malpractice insurance).
You should also price out and consider getting health insurance, disability, and life insurance for you and your employees. Remember that if your business uses vehicles, get business automobile insurance liability coverage, too.
Obtain Business Permits and Licenses
File for a federal employer identification number (a federal tax ID number) with the federal government through the Internal Revenue Service. Businesses with employees must register with their state for workers' compensation insurance. Businesses that sell retail goods need a seller's permit from the state. This includes online stores.
Set Up Your Bookkeeping System and Business Finances
A bookkeeping system is vital to your small business's success. There are a few decisions you need to make at a business startup, like:
- Buying small business accounting software
- Choosing whether to run your books based on the cash or accrual method
- If your business cycle doesn't follow a normal calendar year, pick a fiscal year if permitted by your state
- Hiring an accountant or firm to help with your financial books
Your bookkeeping system should monitor accounts payable and receivable. Once you have done this, set up a business bank account and get a business credit card.
It's easiest to manage taxes if you prepare for them when you start the business.
Examine the basic tax scheme for your type of business and set up an IRS account to pay taxes when it comes due. You should also set up an account with your state department of revenue to pay state business taxes and forward any sales tax your company collects. Learn the difference between capital and current expenses and determine which ones apply to you.
Be Prepared To Market Your Business
Set up any social media accounts you will use. Don't forget LinkedIn. It's one of the most useful sites for hiring employees. Craft a logo and print business cards, too. Your business should be on search engine sites like Google and Yelp. Consider including search engine optimization (SEO) on your website at this phase.
Starting a New Business? Get Legal Help
As you can see, quite a few moving parts are involved in starting a new business. It's a great idea to contact a local business organization attorney to ensure that you comply with applicable laws and regulations as you get your business off the ground. It could save you a lot of time and worry down the road.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.