Open for Business! This phrase has a nice ring to it…doesn’t it? But, how do you get ready to start your business? Here’s a checklist to get started.
Every business starts with a kernel…a nub…a gem of an idea. It could be something simple or complex. Perhaps it is a new drug, or an invention, or a new service that you want to be the start of a business. With your idea in hand, get ready for the real work to begin.
1. After the initial ideas phase, what follows is the brainstorming phase. Before you start forming a business model, you need answers to some very basic questions. All of these questions and more need to be answered.
- Why are you starting a business? To get out of a 9-to-5 rut…to be your own boss…to quit your day job?
- Do you need to earn money right away or do you have a cushion to grow your business slowly?
- What type of business?
- One location or many?
- One-man-band or many of employees?
- Your chosen field of expertise may not be business. But, do you know the basic business skills needed to run a successful business? Seek advice from colleagues or hire a business manager.
2. You may know your product inside and out, but do you know who will buy it? Think about your target audience…do you understand their needs? Are you ready to learn about them?
Once you have a customer base established, you can send a survey to your customers via email or add a survey to the company website. Until you have specific data on your customer you will need to do research on who you are selling to. Read trade publications. Attend trade shows. Join local business groups and groups in your niche market.
3. Even though you may not have a fully formed profile of your customer, you must decide how you will market your product. Traditional advertising on store signs, billboards, magazine and newspaper ads, and television ads should be part of the marketing budget. Online resources for promoting your business should include a website, listing the business on online business sites, and possibly a social media presence on Twitter and Facebook.
4. Once you know what you will sell and who you are selling to, you need to decide where you will locate the business. Criteria to be considered:
- Where will you locate the business? In your home? In rented space? Buy land and build? Convert an office building or factory for your needs?
- With an existing local customer base, you may not want to stray too far from your home base.
- Does your business need to be near a major city? If your business will rely entirely on online sales, can you locate the manufacturing part of your business out-of-town, -state, or -country?
- Size of the facility. Number of parking spaces. Layout of offices. Location of offices/cubicles based on the layout.
- Are there stores and restaurants near the location? Your employees will need to be close to places to eat, or shop, while you will need stores and restaurants for entertaining clients at nearby.
5. As early as you can, seek counsel from an attorney who deals with business issues. Your business needs a name. Someone will need to do a search for business names that may be too similar to your chosen name. A lawyer will be able to draw up documentation needed to apply for an LLC. Set up federal tax ID. Apply for a business license.
6. Familiarize yourself with the law as it applies to your business. What are the health and safety — OSHA — codes for your employees? Regulations covering hazardous waste? Federal tax codes? Social security and workers’ compensation?
Finances and Protection
7. Buy insurance to protect your business from fire, theft, vandalism, accident liability, etc.
8. Research health insurance plans for you and/or your employees. Will you offer insurance to employees? Or wait until the business is a year or two old?
9. Start a bank account for your business. Checking and savings. Look in to retirement plans.
10. Plan your financial future. Find investors. Apply for grants. Seek funding from local business groups dedicated to help businesses get off the ground. Set aside money to pay for rent, salaries, research and development, utilities, and more. A typical month of expenses for your business may look similar to this:
- living costs for you and your family
- employee wages
- office supplies
- maintenance and repair of facility
- delivery, shipping, and transportation costs
- miscellaneous expenses
With a product idea and a business plan, you are ready to embark on the process of setting up your new business. Good luck!