Starting your own business may sound like an undertaking of epic proportions. The truth is, it's not. Yes, you're going to have to work hard, and commit to working on it at all hours of the day, but actually getting set up is simply down to making sure you've "checked all the boxes," which is exactly what this business startup checklist aims to help you do.
We've broken the tasks down into manageable categories. Here is an overview of the "8 Steps to Starting Your Own Business" checklist. The SBA Guide will include more detailed information on each section and provide resources that will help you complete each stage of getting started.
- Conduct a personal evaluation
- Find a great idea
- Analyze your industry
- Make it legal
- Create your plan
- Show me the money
- Set up your location
- Market and launch
Conduct a personal evaluation
Begin by taking stock of yourself and your situation:
- Why do you want to start a business? Is it money, freedom, creativity, or some other reason?
- What skills do you have?
- What industries do you know about?
- Would you want to provide a service or a product?
- How much capital do you have to risk?
- Will it be a full-time or a part-time venture?
Your answers to these types of questions will help you narrow your focus. This step is not supposed to dissuade you from starting your own business. Rather, it's here to get you thinking and planning. In order to start a successful business, passion alone isn't enough.
Find a great idea
A great business idea isn't just one that makes money. It's one that's a good fit for you personally and plays to your strengths and skills. Great businesses are fueled by owners that have a passion for what they do. Without passion it becomes a job. Hopefully you're going to be in business for a long time, so pick something you love.
- Identify your strengths and weaknesses
- Define what success looks like for you
- Do your research: What are popular businesses today?
- What problems can you solve better than others?
Check out our online resource if you need help Finding A Great Idea.
Analyze your industry
Once you decide on a business that fits your goals and lifestyle, you need to evaluate your idea. Who will buy your product or service? Who will your competitors be? At this stage you also need to figure out how much money you will need to get started.
Your "personal evaluation" was as much a reality check as a prompt to get you thinking. The same thing applies when it comes to researching your business and the industry you'd like to go into.
If you like, you can even take things a step further and consider the consumer needs currently not being met by businesses in the industry. This is a good time to take a look at potential competitors. And remember, the presence of competitors is oftentimes a good sign! It means that the market for your product or service already exists, so you know that from the outset, you're not flying entirely blind.
While you've got the time, learn as much as you can about your competitors, about what they provide to their customers, how they attract attention, and whether or not their customers are happy. If you can figure out what's missing before you even get started, your job will be made that much easier when you do finally set up shop.
Make it legal
Realistically speaking, registering your business as a business is the first step toward making it real. However, as with the personal evaluation, take your time to get to know the pros and cons of different business formations.
If at all possible, work with an attorney to iron out the details. This is not an area you want to get wrong. You will also need to get the proper business licenses and permits. Depending upon the business, there may be city, county, or state regulations as well as permits and licenses to deal with. This is also the time to check into any insurance you may need for the business and to find a good accountant.
Spend some time getting to know the pros and cons of each business formation. If you need help, we've got an entire section dedicated to Your Business Structure.
While incorporating can be expensive, it's well worth the money. A corporation becomes a separate entity that is legally responsible for the business. If something goes wrong, you cannot be held personally liable.
Create your plan
If you will be seeking outside financing, a business plan is a necessity. But, even if you are going to finance the venture yourself, a business plan will help you figure out how much money you will need in order to get started; what needs to get done when, and where you are headed.
In the simplest terms, a business plan is a roadmap-something you will use to help you chart your progress and that will outline the things you need to do in order to reach your goals. Rather than thinking of a business plan as a hefty document that you'll only use once (perhaps to obtain a loan from a bank), think of it as a way to formalize your intentions.
Even if you do not think you need a business plan, you should go through the planning process anyway. The process of doing so will help to uncover any holes or areas that have you have not thought through well enough. If you do need to write a formal business plan document, you should follow the outline we've put together in Write Your Business Plan.
Show me the money
Depending on the size of your venture, you may need to seek financing from an "angel" or from a venture capital firm. Most small businesses begin with private financing from credit cards, personal loans, help from the family, and so on.
As a rule, besides your start-up costs you should also have at least three months' worth of your family's budget in the bank. In order to finance your company, you will need to match the company's needs to the appropriate financing option.
Set up your location
You've done it-or, just about. Your business plan has been laid out, the money is in the bank, and you're ready to go.
You've got a long list of things you need to do: Find a location. Negotiate leases. Buy inventory. Get the phones installed. Have stationery printed. Hire staff. Set your prices. Throw a grand opening party.
Each of these steps will need to be thought through carefully. Your business location will dictate the type of customer you attract, what types of promotions you can run, and how long it will take you to grow. While a great location won't necessarily guarantee your success, a bad location will almost always guarantee failure.
Market and launch
Before you can advertise your business or set up your website, you've got to think of how you're going to brand your business.
That is, you've got to figure out what the "personality" behind your business is. Not only will this help to differentiate you from the competition, but it will clarify your message, create value, and be a key element of your marketing. Your brand will help decide your pricing, the employees you hire, the customers you target, and the PR you do.
The best way to figure out how to brand your business is to learn from others. Look at what they're doing. Do a lot of research, particularly on those in your industry.
You've covered your bases. Now, you literally have no excuse! This is the time to get out and talk to people. Start selling, continue advertising, and follow up.
