If you’re starting a new business, we don’t have to tell you much there is to think about. It tends to feel that when you cross something off your checklist, another three items take their place. Starting a business is overwhelming and exciting. Deciding to start a business is a daunting decision that can transform your life.
While your precise needs can differ depending on your exact business, we’ve put together a business startup checklist to help you keep track of the list of things needed to start a business. Before you dive into starting your business, it’s a good idea to learn about the different elements you need to get off the ground. That way you can feel ready to go and have everything in place for a strong start.
In this article, we will go through the must-know business start-up statistics you need to know and go through a comprehensive business startup checklist.
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- Must-know business startup statistics
- Business startup checklist: 15 things you need to get off the ground
Must-know business startup statistics
If you want to start a new venture and be your own boss, entrepreneurship can be a rewarding path. While it’s by no means easy, there’s a reason that so many people go on to start their own business. In general, there isn’t a one size fits all model for starting a business. Although every business needs market research, financial decisions, and knowledge in your industry, every business is unique. But by organizing your thoughts into the right steps, you can begin to tick off your to-do list.
The great thing about starting a business in today’s world is that you have access to a ton of information. You can learn from incredible business leaders and mentors about their successes, mistakes, and tactics. If you think that 99% of US businesses are considered small and that 21.5% of startups fail within the first year, having a good understanding of previous business failures is valuable.
Factors like money running out and lack of research play a role in businesses failing. Paying attention to your customers is essential since 14% of startups fail due to not regarding customers’ needs. One of the biggest challenges startups face is generating new business. Considering that startup owners and entrepreneurs can spend about 40% of their working hours on tasks that don’t generate income like hiring, HR, and payroll, you can see how so many businesses struggle to get off the ground.
What are the biggest challenges small businesses face?
Although some challenges like cash flow and finding potential customers aren’t new obstacles for businesses, there are some new issues arising. How businesses deal with Covid restrictions, hygiene standards, and a potentially sick workforce is crucial for success. With new Covid strains emerging, restrictions can change at short notice. Whether that means ensuring your employees can work from home, or supporting customers digitally where necessary, it’s a challenge that businesses of all sizes are facing.
There’s a lot of uncertainty at the moment and that in itself creates a challenge for businesses. Planning events in advance, travel, opening new business locations are all things you would arrange in advance. But with the uncertainty of COVID-19, plans can be canceled at short notice due to restrictions, which can cost businesses a lot of money. Due to current events, many businesses are experiencing supply issues. Supply chain issues are affecting businesses all over the world with power shortages in China and the Brexit situation in the UK amplifying issues. Germany is also experiencing a backlog at its ports.
As we move to 2022, no doubt working from home will still be a major part of running a business. This presents new obstacles for businesses. Creating a work/life balance for employees working from home or flexible working will continue to be an ongoing theme for many businesses. As more companies implement new workflows to integrate digital working, a technology divide has the potential to cause a lot of problems for companies.
Business startup checklist: 15 things you need to get off the ground
The development of any business can feel overwhelming at the best of times. It can be tough to know the right steps to take when starting a business. By following a process, you can begin to develop your business and make your way through your startup checklist. A to-do list can help to pull your focus so that you can edge closer to your goals of creating a successful business. Let’s dive in.
1. Select a business name
You have made the big decision to start a business and have a solid idea for your company. Figure out the type of business you want to launch and your niche. While choosing your business name may not be the first thing you do, it’s a crucial part of developing your brand. Creating the perfect business name is hard. Some brands like to include their keyword, while others choose obscure yet memorable names. Your business name should be easy to spell, catchy, and concise. Double-check that the domain is free for your business name and always get a second opinion from a trusted source.
2. Choose a business structure
Choosing your legal business structure will affect key parts of your business like taxes, insurance requirements, daily operations, and more. Your business structure will depend on your location and area. Your legal structure will depend on your type of business, your location, and how many people are on your team. Here’s a breakdown of some of the business structure options:
- Sole Proprietorship – this is for business owners who are the sole owners and plan to do everything by themselves.
- Limited Liability Company (LLC) – this structure provides business liability and business tax benefits.
- Partnership – this is where two or more people are personally liable for the business entity.
3. Create a business plan
Creating a business plan is a crucial step for any business. It’s an opportunity to refine your business idea and show your why. Writing your business plan streamlines your processes and formalizes the business as a whole. While some small business owners write a business plan initially, others never glimpse at it again. But it can reveal insights into your business that you may not know. Your business plan should answer the following questions:
- What is the purpose of your business?
- Who is your target audience?
- Where is the demand for your service or product?
- Which opportunities or challenges can you identify?
- What funding, crowdfunding, or business loans do you need?
- What are your startup costs?
4. Register your domain and trademarks
An important step of starting a business is registering your domain. After all, every business needs a website. Even if you don’t have a website ready to go from day one, register the domain name. So, when you are ready to build your website, the domain is registered and ready to go. You may want to consider registering any trademarks for your name or logo.
5. Set up a business bank account
If you’re not generating income yet, you will be and will need a business bank account. When opening a business bank account, shop around with different banks and lenders. You want a bank account that meets your business needs for online payments, money transfers, billing, etc. Your business finances should be separate from your personal finances. Some banks have added charges while others may offer perks, so it’s important to shop around when choosing your business bank account.
6. Arrange business insurance
Your business insurance will depend on a few different factors like your location, type of business, and number of employees. There are several insurance policies available that you will need to consider. For instance, an eCommerce store will have different insurance needs to a shop that deals with members of the public. If you have any employees, at the minimum you will need worker’s compensation insurance. Most small businesses should have general liability insurance too.
7. Create your website and social media channels
Create your business website and start setting up your social media channels. Nowadays, a website is an essential part of any business that helps to boost SEO and brand awareness. Before a customer makes a purchase or signs up for a service, they will likely visit your website and social media channels to check for online reviews. If you don’t have the budget to build a full website, you can use a website builder to create a professional-looking website.
8. Register for taxes
Naturally, any business will need to obtain a tax ID through the IRS and pay taxes. The choices you make for your business can affect your taxes and legal requirements. For example, an online store and brick-and-mortar business could have varying requirements. The legal structure you choose will influence how much you pay in sales taxes. Registering for taxes and ensuring your business meets federal and state laws is a crucial step in starting any business.
9. Hire the right employees
Unfortunately, there aren’t enough hours in the day for one person to perform every business role to the best standard. Consider hiring employees for jobs that require a specific skillset. For example, accounting, management, or web design. You have the option to hire as you grow, or can hire employees at the beginning, depending on your funding and position. If you have employees, you will need to register for your employer identification number (EIN), also known as your federal employer identification number (FEIN). If you want to process payroll, you will need to obtain an EIN.
10. Find your business location
Whether you’re starting a digital-only business or plan on opening several locations, your business location will influence your marketing plan, your business structure, and your business requirements. The country’s laws and regulations will impact several parts of the business. The right business location for you will depend on a few factors like:
- How much space do you need?
- The scale of your operation
- If you plan on offering in-person sales or services
- Type of business
11. Keep your data safe
Nowadays, most businesses are handling sensitive customer data. Whether it’s payment and credit card details or personal information, think about how you will keep customer data safe. Make sure you have the tools you need to collect and protect data. Whether you’re taking payments from customers or holding personal information as a subscription service, data security and protection is crucial for businesses.
12. Obtain business licenses and permits
The business licenses and permits you need will depend on your type of business and location. Investigate state and federal requirements and guidelines so that you have the right documents in place before starting your business. The majority of locations will require a business license, even if it’s a home-based business. Certain businesses like real estate agents, banks, and barbers require state licenses. You may need a seller’s permit if you sell goods to the public. It’s a good idea to contact your state’s agency and speak to an expert so that you have all the right documents for your business.
13. Promote and market your business
Creating your business is one step, getting the word out there is another. During the planning stages, consider how you will promote and market your business. Your marketing activities will likely form a part of your overall business plan. Marketing efforts will likely evolve with the business as you begin to discover what works for your target audience and what needs improving.
14. Develop a payroll and accounting system
Tracking your finances, payroll, and accounting will be a key driver for your success. One of the reasons that startups fail is they run out of cash. Accounting software can help you to track your finances and keep an eye on your cash flow from the beginning. Save time crunching numbers by leveraging the right tools for the job. Find a good accountant and streamline payroll and accounting processes.
15. Think about your technology
Before doing business, think about what technology you need. Point of sale systems, accounting software, customer relationship management systems, project management, and online data storage are just a few considerations for your business. The right software solutions can save you a lot of time and energy. Before investing in any technological solution, do your research. There are several options for software that cater to different industries and business sizes. Consider your needs now and in the future before you choose your small business technology.
As you can see, the list of things needed to start a business is lengthy. But as you work through your processes with a bit of trial and error, you can find out what works for you and your business. Instead of feeling overwhelmed and doing everything all at once, break down your tasks into smaller, achievable tasks. While starting a business is challenging, there are steps you can take to kickstart the process and get off the ground.