Do you have an idea floating around in your head, begging to be turned into a business? You’re not alone!
According to The U.S. Bureau of Labor Statistics, more than 200,000 new businesses were born in each quarter between March 2011 and March 2015. That’s nearly 900,000 ideas transformed into real companies every year! Will this be your year?
If you’re serious about turning your idea into reality, there are a few essential steps you should take. The following business checklist will walk you through the preliminary stages of starting a company, setting you up for long-term success.
1. Write a business plan
First, you’ll want to create a business plan. Even if you only have a general idea of how to start a company, do not skip this step.
Formal business plans are essential for several reasons:
- They serve as roadmaps for your first years.
- They ensure that you’ve thoroughly researched every aspect of your idea and are confident in its feasibility.
- They are instrumental in securing financing, investors, or partners.
There are ample resources available to help you draft a comprehensive business plan, including many from The U.S. Small Business Administration (SBA).
2. Choose a legal structure
Next, you’ll want to determine the appropriate legal structure for your business. Common options include:
- Sole proprietorship
- Limited liability companies (LLCs)
- S Corps
You can research the pros and cons of each structure at the IRS’ website to determine which is best for your company. You may need a lawyer to form certain legal entities, such as corporations.
3. Register your business
At this point, you’ll need to pick a business name and register it. The SBA explains that this generally entails registering with local and state governments and securing a federal tax number. However, certain legal structures (such as corporations) are more complicated and require taking additional steps.
4. Secure financing
According to research from Babson University, obtaining funding is one of the biggest challenges that business owners face. The school’s 2016 report, The State of Small Business in America, discovered that businesses typically seek funding from financial institutions and receive, on average, only 40 percent of the capital they initially requested.
Traditional loans aren’t the only ways to finance a new business, though. You can also use alternative funding methods, such as:
- Borrowing from family or friends
- Venture capitalism
- Grants (for certain types of businesses)
5. Obtain licenses, permits, and insurance
As your business begins to take shape, you’ll need to file for any licenses or permits mandated by your city or state. These will vary depending on the type of business you’re starting. The SBA has a helpful list of required permits by industry.
Similarly, you’ll need to purchase insurance. At the very least, your company should have general liability insurance and some type of product or professional liability insurance. If you have a physical location, you may also need property insurance.
6. Build a team
Even if you’re operating your own company, you’ll likely need a few extra hands to grow your business at the beginning. Consider finding a business mentor and building relationships with an accountant and lawyer who you can turn to when questions arise.
7. Create an online presence
Today’s consumers frequently search for products and services online, making it more important than ever for small businesses to have a website and social media presence. Many companies choose the WordPress.com Business website builder to host their websites, thanks to its beginner-friendly interface and affordability.
8. Start marketing
Finally, it’s time to start marketing your business. You can promote your company online, but you should also create a marketing strategy that includes traditional marketing methods, search engine optimization, email newsletters, referrals, partnerships, and more.
By following this business checklist, you should feel confident as you start out on your journey to grow a company from scratch.
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