While no two businesses are alike, they all follow certain guidelines when it comes to getting them up and running. A new startup is going to come with more than a few uncertainties no matter how well a person prepares, but preparation will still play a major role when it comes to success. Use this checklist as a way to address the biggest hurdles that need to be overcome.
Name and Plan
Companies can be either a sole proprietorship, partnership, Limited Liability Company (LLC), or an S-Corp. From there, choose a valid name and website domain to establish a presence for the company. Complete a business plan as soon as possible and ensure it lists the following information:
- The mission of the company
- How income is generated
- Who the ideal customers are
- Why the company has a competitive edge
- Starting resources/necessary funding
Tax IDs, Permits, and Bank Accounts
Business owners should obtain a Federal Employer Identification Number from the IRS based on the type of business they are (e.g., LLC, S-Corp, etc.) This number is used to officially establish a payroll. Companies will also need an official commercial bank account as well, which may be tricky to open. Some banks are notoriously lax about their requirements while others may need more specific information, such as company minutes, signatures, and notarized financial information.
The next step is to obtain either a federal or a state permit. These permits are required based on the type of business and the rules of the state. A gun dealership will need a federal permit while an insurance company may or may not need a state permit. If owners sell physical goods and live in a state with sale’s tax, they’ll need to obtain a Resale or State Seller’s Permit.
Licenses, Insurance, and Accounting
A business license isn’t typically governed at the state level but at the county or city level. Even the most basic of home-based businesses may need a license stating the owner has permission to conduct official affairs. Owners may further have to register with a State Agency to hire part- or full-time workers. Owners may need general business insurance, including workers’ compensation, to protect themselves against major liability claims.
Most insurance agencies can make recommendations based on the most likely threats against the owner’s industry. Finally, set up a record-keeping system that will make auditing financial details easier, as well as keep track of where income is going. Small businesses may want to start with general software like QuickBooks to keep records simple.
Tie Loose Ends Together
Preparing means having all the tools in place to do everything from pay employees to ensure permits are renewed on time. Owners can either delegate these tasks or design a system that ensures nothing slips through the cracks. Once owners have taken care of this minutiae, they can start focusing on how to distinguish their company from their competitors. Establishing a brand is the precursor to deciding on a market strategy. Once an owner has the right angle, they can decide if their business will benefit more from traditional advertising or if they need to expand to social media, GoogleAds, etc.
Each checklist will vary based on who is opening the company, what they’re planning to do, and how they plan to secure the necessary permissions. However, this list should be able to give everyone an idea of what needs to get done before launching their official enterprise.