BowieCreative

Business Startup Checklist 101

So you're excited and ready to start your small business as quickly and easily as possible. You're ready to jump right in and start selling and marketing but is your business ready to be introduced?

Often times small business owners overlook important steps when starting their new business in order to skip to marketing and branding their company. Creating a strong foundation for a small business eliminates unwanted problems down the road. One of the common questions small business owners ask us is "aside from marketing and building brand value for small businesses what necessary steps should be taken in order to form a solid company?"

To help answer this question I've provided a helpful list so small businesses can successfully make more business possible.

1. Select a Name and Legal Structure
You basically have 4 choices when selecting a legal structure.

•     Sole Proprietorship
•     Partnership
•     Limited Liability Company
•     Corporation or S-Corporation

2. Write a Business Plan
If you haven’t already, prepare at least a preliminary business plan.

Here are 3 basic types of business plans:

•     A Simple Business Plan
•     A Comprehensive Business Plan
•     A Professionally Written Business Plan

3. Obtain your Employer Identification Number (EIN)
If you are setup as a Corporation, LLC or Partnership (or a sole proprietorship with employees), apply for a Employer Identification Number (EIN) from the IRS. A EIN will be necessary to open a bank account or process payroll.

4. Open the Company Bank Account
Select a bank and open the company bank account.

TIP: Contact the bank prior to opening the account to see what their specific requirements are to open a business checking account; some banks’ requirements are fairly simple whereas some banks’ requirements are extremely complex.


5. Lease Office, Warehouse or Retail Space (if not home-based)
Depending on your type of business (retail, office or warehouse), arrange for office space to be leased. Contacting a commercial realtor in your area can be helpful. Also, make sure to arrange for utilities and office furniture.

6. Obtain Licenses and Permits

 A. Federal Permits

Depending on the type of business you are in, you may need a Federal license or permit.

Most businesses do NOT require a Federal license or permit. However, if you are engaged in one of the following activities, you should contact the responsible Federal agency to determine the requirements for doing business:

•     Investment advising ( http://www.sec.gov )
•     Drug manufacturing ( http://www.fda.gov )
•     Preparation of meat products ( http://www.fda.gov )
•     Broadcasting ( http://www.fcc.gov )
•     Ground transportation ( http://www.dot.gov )
•     Selling alcohol, tobacco or firearms ( http://www.atf.gov )

B. State Licenses

Some occupations and professions require a State license or permit. Laws vary from State to State, however, if you are engaged in one of the following professions, you should contact the responsible state agency to determine the requirements for your business:

•     building contractors
•     banks
•     insurance carriers
•     physicians
•     appraisers
•     accountants
•     barbers
•     real estate agents
•     auctioneers
•     private investigators
•     private security guards
•     funeral directors
•     bill collectors
•     cosmetologists

State Licenses and Permits based on products sold.
Some state licensing requirements are based on the product sold. Contact your state licensing authorities to determine the licensing requirements of your business. For example, most states require special licenses to sell:

•     liquor
•     lottery tickets
•     gasoline
•     firearms

TIP: Most people engaged in the types of business that require a special State License or Permit are already aware of the requirements (i.e. an accountant is familiar with the licensing requirements for accountants).

C. Sales Tax Permit

If your company sells physical products within the state where it does business, you may have to collect and pay sales tax. This is usually accomplished by obtaining a State Seller’s Permit or Resale Permit.

TIP: many service businesses that do not sell a physical, tangible product are NOT required to collect sales tax, ask the State taxation agency for details/clarification.

D. Business License

Most Cities or Counties require you to obtain a business license, even if you operate a home-based business. This is a license granting the company the authority to do business in that city/county.

7. Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both).

8. Set up an Accounting and Record-Keeping System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years.

9. Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.

10. Systematize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business.

11. Develop a Business Identity
Order business cards, letterhead and promotional materials for your business. A professionally created logo can make your business look professional and established.

12. Get the Word Out (Marketing)
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer.

Tip: Contact us for for consulting and for more information