What to consider when starting a business from scratch?
When you’re starting a business structure from scratch, many factors should be considered. It can be overwhelming, even for those with some experience.
To help your business and yourself, we want to give you a list of aspects to keep in mind when starting a company. Use this checklist as a roadmap to guide you through the startup process, helping you stay on track and ultimately be successful.
Starting a business checklist: Step by Step
The first and most crucial step to starting a business is deciding what kind of business you want to run. There are many different options, so the possibilities can seem endless. Think about what you are passionate about and whether or not you can make a business out of it.
Why is proper choice of new business important?
It can be challenging for someone who doesn’t have any experience to start a company on their own. Deciding what type of business you want to run will help determine if it’s a good idea, how much money you’ll need, and where to go from there.
How to choose best new business for you to start?
Make a list of things you are interested in. Do not pick ideas that you think are popular, as they will be very competitive and challenging markets to break into.
Once you’ve created a list of ideas, narrow them down and choose the one that makes your heart race.
Determine which ones would make the most business sense. You can write down what type of people might be interested in this product or service and why someone may want to use it.
Once you’ve created this list, start thinking about how it can be turned into a business.
Tip: remember that your idea doesn’t have to be complicated or over the top.
Writing down what type of company you want to create will make the next steps easier and help ensure that it’s something people need in their lives.
Which tools to use when you want to start new business?
- Online research
- Brainstorming with friends and family members who have business experience
- Market trend books
- Business journals and magazines
Once you’ve determined what type of business to start, it’s time to research your competition and the industry in general.
Why is research so important?
It will give you a better idea of whether your business has potential or not. It also allows you to discover how big the market for the product or service could be, so you won’t try to sell something for which there is already a lot of competition.
This step will help you determine if there’s room for more businesses, how much money it should take to launch your idea, if people would pay for this product or service, and what type of marketing you’ll need.
How to make a research of your competitors?
There are many ways to do this, but the simplest is by using Google.
Start typing in your type of business, the location you live in or plan on starting a company, and some related keywords into the search bar on Google. This will bring up all of the similar businesses in your area that are currently operating.
You may want to try phrases like "Your industry + your city" or "competitor + your industry + your city."
Make a list of each business, their website address, and contact information. Check out how they look online so you can compare them with what you plan on doing for your business.
This will give you a good idea of how many businesses are already operating in the same industry and what they look like.
Tip: finding something that looks very cheap or outdated could be a sign that there is not much competition in the area yet, so your business might have potential here.
Which tools to use to research your competitors?
- Reading the news and blogs about your industry is a great way to learn what other companies are doing and potential trends for the future, etc.
- Talking with people who currently work for businesses similar to the one you’re planning to launch can be very helpful as well.
- Look at competitors’ websites and social media accounts for more information about them.
What are the core skills required for running a business? To create a list of qualifications, think about what skills are needed in order to be successful at operating your business.
For example, suppose you’re starting a marketing agency. In that case, it helps if the owner has experience in marketing and knows which tactics work and which don’t for different types of businesses.
What skills will be helpful in general?
- Time management
- Leadership and communication
- A strong work ethic, professionalism, and honesty, etc.
- Attention to detail
- IT (especially if you’re looking to start an online business)
Why is the list of qualifications important?
Such a list will help you determine which skills you already have and what you need to develop in order to manage your business effectively.
How to create a list of qualification ?
- List the skills you think you already possess.
- Get your coworkers and family members to tell you what they value about you. You can even do this via an anonymous survey to ensure that they will be totally honest with you.
- You can also talk to business owners or people who currently work for businesses similar to the one you want to start about what types of qualities those companies tend to value most highly.
Which tools can help you to create list of qualifications?
- Check out LinkedIn profiles (of both professionals in your industry and people who work for competing companies) to see what type of qualifications they have for their jobs.
It’s a good idea to start by figuring out how much your product or service will cost.
Why is the proper price of products/services important?
It’s not easy to start a business. You’re going to face many obstacles, plus it’s going to take a lot of time, energy, and money. You need to have some financial independence to not be reliant on borrowing from people.
If you currently have a full-time job, it would be wise to start putting away as much money as possible so that when you finally decide to quit, you’ll still have sufficient savings in place.
How to set a right price for your service/product ?
- What you’ll need to do is research the price of similar products/services, how much your competitors are selling them for, and how much it costs to make or acquire these items.
- Once you have identified your target group and potential customers, you should survey them to discover how much they are willing to pay for the product you intend to sell.
- Choose a pricing strategy that suits your needs best.
Tip: look into government grants and loans that will help you get your business started.
Which tools to use for finding best price ?
- You can create surveys using SurveyMonkey or Google Forms (though the latter is not very extensive and doesn’t allow for much customization either).
- To organize everything, use a spreadsheet such as Google Sheets (Google Drive) or Excel.
Having a brick-and-mortar presence is the next step in starting a business.
Why is a good location important for new business?
It will help you decide if there’s enough room, if it should be easy to get customers through the door, and how much money you’ll need to invest before opening day, etc.
How to find a good location for a new business?
- Is there enough space for your business in the property you’re considering?
- How easy will it be to get people through the door (to buy what you’re selling, etc.)?
- Does the building have plenty of parking spots available outside, or will customers have to leave their vehicles elsewhere and walk?
- How much is the rent per square foot?
- Where are your competitors located?
- Find a part of town that’s most convenient and affordable for your target customers.
Which tools to find a good location for a new business?
- Google Maps/Street View is an excellent way of looking at the area where your business will be located to see how much space there is and what’s nearby (restaurants, shops), etc.
Once you’ve found a suitable location for your new venture, it’s time to start looking for a real estate agent that can help you out with everything from finding the right place at the right price, through dealing with contracts, to organizing inspections and surveys, etc.
Starting a business can cost quite a bit of money. You’ll need to keep enough in reserve for months when your sales are low or non-existent, so budget accordingly. It may take years before you start making any business profit if you don’t plan in advance for the slow months.
Why is it important to have enough money to start a new business?
It will help you decide whether or not it’s going to be feasible for your business and if there are ways of saving up more money before opening day without having too many financial setbacks along the way.
How to handle this step?
- Will you be working with a partner or alone? If it’s the former, how much money do they have available to contribute towards the business right away (if at all)?
- How many months’ worth of business expenses can you cover without having to take out loans or use a company credit card?
- How much cash do you have saved up right now, and how long will it last if your business isn’t generating enough income?
- Consider setting a budget for yourself before everything else to figure out how much money your business will need right away (startup costs) and what needs to happen if you are to generate income within 12 months or less (your goals), for example.
- If you’re hiring employees, then factor in payroll taxes and benefits packages among other aspects that are likely to increase your monthly outgoings.
Which tools to use in this step?
- Mint is a piece of accounting software that is a great way of keeping track of how much you’re making every month, as well as your savings and bills on top of everything else.
After you know how much money you’ll need to launch your business, you need to consider what else needs to happen (supplies, marketing efforts) to make sure everything else runs smoothly.
Why is it important to have a business case?
Keeping an eye on these elements will help prevent massive financial losses and give you ideas for ways to improve your business.
How to create costs list for your new business?
- Reach out to industry professionals and ask for advice about what you should expect.
- Start-up costs, including any equipment you’ll need to purchase for your business (rental fees), insurance plans if needed, etc.
Which tools to use create costs list for your new business ?
- Keep track of all the money you make and spend by keeping receipts and invoices, etc. If that’s too much trouble for you, just use Mint or another accounting and record-keeping system instead. You can also upload any business documents related to taxes into their secure platform so that everything is available at a moment’s notice.
- Use a spreadsheet to keep track of all your expenses. This will make it easy for you to see how much money comes in and out each month (and shows where any discrepancies might be).
If you can only hire one person, they should be a bookkeeper who can make sure all of your administrative tasks get done. However, if you can include an extra staff member in the budget, consider hiring someone to take care of customer service or sales for you.
Why is hiring an employee to run the day-to-day operations important?
First, it will allow you to delegate tasks to focus on the bigger picture and not be bogged down by minor details or day-to-day operations. It also allows one person to focus entirely on sales while another focuses completely, e.g., on marketing.
How to find new employees?
- First, you will need a job description for your potential employees and their managers. This means that every position in your company should have at least one person managing it or overseeing its daily task list.
- Next, make sure all of the necessary documents are created before anyone is hired. This includes an employee manual, a non-disclosure agreement for employees, and the company’s intellectual property policy.
- The hiring process should start as soon as possible because it can be time-consuming to find just one person who is qualified for each position in your company at all times. Hiring someone you have worked with before will save you time in the long run.
- When you are trying to find qualified employees for your company, keep an eye out for people who have experience starting their own business or even running a small team.
Which tools to find new employees?
- Check out LinkedIn, Indeed, UpWork, or Monster and Glassdoor to find potential employees and learn more about them.
- Additionally, you can find employees through Facebook business groups. Many people are looking for work there, so there’s a good chance you’ll find your future employee there.
Make sure you follow all of the necessary legal steps for starting up a business, especially if it’s your first time doing so.
Why is it important to have all required permits, certificates and licenses ?
If you follow all of the legal requirements for starting up your business, you will avoid any potential trouble for breaking the law in future.
How to handle all required permits, certificates and licenses?
You should start this process as soon as you open your business and make it a regular part of your operations.
- First, figure out what permits, certificates, and a business license are required by law to run your company in your state or country. You can do that simply by calling local government offices for more information about their requirements and fees.
- Next, you need to make sure your employees complete all of the necessary training for each position in your company. This includes making them read and sign off on an employee manual that has been written by a lawyer or human resources expert to avoid any potential legal problems down the line.
Which tools to use in this step?
- You can use the internet searches or talk directly with local government offices to find out which special licenses you need for your business and obtain a legal structure. It’s also possible to gain a business license online.
- A helpful resource is the Small Business Association, which has all kinds of information about what permits and licenses you will need for your business.
- To clarify any confusion, consult a lawyer or accounting advisors and get professional advice.
This is your chance to make a great first impression on potential new customers and clients.
Why is creating an email important for a new business?
Having professional-looking contact information is crucial as soon as you start accepting payments for whatever service or product you are offering. Otherwise, how will people know where to find you online?
Having an active, professional email address and website will allow people to contact you with ease. This is especially important if you don’t have a business location, i.e. if the company operates entirely online.
How to create email for a new company?
- Create an email address that includes your and the company’s names. This will help people know they are contacting you as a professional.
- You should also create an attractive website with all of your contact information, including location and hours for a brick-and-mortar business plus any other vital details.
Which tools to use to create email for a new company?
There are many tools available for free online that will allow you to check if an email alias is already being used. This can be especially useful when creating an email address with your company’s name in it, but you also want something personalized.
- Check out NameMesh, EmailFormat, or Domainr to find the best name for your business’s email address
If possible, try to use a domain that matches your chosen company name so people can find out more about your business online efficiently.
Why is a good name important for a new company?
Choosing a name for your business is one of the most important decisions that you will make. It can set the tone and shape how people view your company in its early stages, so you must choose something unique and recognizable that reflects what your business is about.
How to create a good name for a new company?
- If you’re struggling to come up with a catchy and memorable name for your business, try brainstorming sessions with friends who have business experience or marketing expertise, including people outside of your usual network. This will provide an opportunity to get diverse perspectives on naming.
- Ensure that the domain and social media accounts associated with this company name are available.
Tip: avoid names that are hard to spell, conduct a trademark search, and make sure the name sounds good when said aloud.
Which tools to use to create a name for a new company?
- A name generator such as the NameVine will give you multiple name suggestions that can be sorted by popularity and uniqueness. The more popular a name is (the closer it is to the top of the list) generally means the greater the number of other businesses using similar words. Choose something else if possible.
- A name evaluator checks how a particular name might perform in search results or if it is available to register as a domain name.
Many entrepreneurs start their businesses without any legal entity because it is more affordable and accessible to do so. However, if you are serious about your business, then adding a legal business entity (e.g. Limited Liability Company) will protect you if someone challenges your company’s name or tries to take away what belongs to you by claiming they did it first (similarly to how trademarks work).
Why is legal protection of your new business important?
Creating a separate business with its own rights and responsibilities will help you protect your assets. Even if you don’t start with much money, creating a legal entity is vital to protect your hard-earned assets.
How to protect your new business?
Depending on the country, region, or state, this process may differ:
- Once you have your company’s name and location, you can choose an entity type. Each one has its own strengths and weaknesses, so your circumstances will determine the best option.
- You need to provide all of the required documentation.
- Obtain an EIN (Employer Identification Number).
- Open a separate business bank account.
- Set up your books or hire a bookkeeper.
Which tools to use to legally protect your company?
- LegalZoom is an online resource that provides legal support for forming LLCs or other legal entities. It costs $129 to get started and includes many resources, e.g. contracts with vendors.
- A local lawyer can provide you with advice and help draft the necessary documents.
- More local sources of information like your state website or city hall will provide additional resources for starting a business in your area, including free seminars about how to create a company.
Many new startups begin life in a home office or co-working spaces. Although these are options that can help keep costs low whilst allowing for flexibility in how and when employees work, you may want to seek a space for your company as your team and business needs grow.
Why is it important to find a good office space for your company?
When you are starting a business, it is vital to ensure the office space reflects the kind of culture and image you want your company to have.
If someone were visiting your website or store in person, would they get the best impression possible?
How to find a good office space?
There are many ways to go about finding the perfect office space that suits your needs.
The best place to start is by searching for a realtor in your area who can assist with finding business spaces and commercial property listings.
Once you have identified some potential options, you will want to consider factors such as location (is it close enough to home for you to be able to work there every day?), amenities (what do they offer? How much would it cost me if I needed those services?), and price.
You will then be able to choose the best office space among all the available options.
Which tools to find a good office space?
- Craigslist allows users to post listings of available businesses or spaces. You could also see if there are any co-working opportunities in your area.
- OfficeFinder offers a search engine to locate all types of traditional workplaces, from big companies to small businesses.
- Sites like Yelp and Google also allow users to post reviews of different types of offices or business spaces, which can help you find the best location for your startup.
Describe your company’s mission statement and values to help guide employees during difficult times or projects where they might not know what to do next.
Why are goals important for new business?
When you start a business, it is essential to create goals for the future so that employees will know exactly what should be accomplished and how they can help. A clear mission statement and values will ensure that everyone is on the same page about the company culture to promote and set goals, including metrics such as revenue growth or number of new customers acquired each week/month.
How to establish clear goals for the future of the company?
Set objectives that are realistic but challenging enough to grow with you in time as you expand your company’s horizons in new directions.
Which tools to use to establish clear goals for the future of the company?
- A search engine like Google or Bing, on which you might be able to find examples online of what other companies’ mission statements look like.
- Sites like Teamwork PM help with creating a mission statement and values for your company.
- Sites like CompanyCheckup even provide you with reports on how effectively your business is following its goals.
Think about how your product will solve your prospects’ problems in an innovative way that they could not accomplish independently. Rather than simply listing attributes of your business or competitors’ products/services, focus on what makes your product or service unique and better than the rest.
Why is it important to know the target group?
Having an idea about your ideal customer’s pain points will help the product development team create products that solve these issues.
How to find target group?
The best way to find out about your customers is by talking to them. One way to do this is by creating surveys to obtain direct feedback.
Which tools to use to find a target group?
There are many ways for a startup business owner to find out more about their target audience. Some great resources to use are:
- Surveys, which can help you learn more about your customers and how they feel about the current product offerings. You could consider using tools like SurveyMonkey or InstaSurvey for this.
- Sites like Google Analytics, to reveal valuable insights into who is visiting your website and what pages they look at most often.
- Sites like Teamwork PM, which allow you to create a customer support ticket system to keep track of their feedback.
It is essential to make sure that you have an accountant for bookkeeping who can help handle company finances.
Why is arranging your accounting important?
Your business accountant will make sure that all tax implications and accounting records are covered, while your bookkeeper will look after day-to-day aspects like invoicing and sales order processing.
How to arrange your accounting?
It can be challenging to find an accountant with whom you are happy working. If possible, meet with them face-to-face at their office so that you can see the environment for yourself.
If you are busy, then a phone call or Skype meeting might be a better option. However, you should also ensure that they have experience within your business industry, as it will likely take them some time to understand how your business functions and what information you need from them.
Don’t forget to check reviews and referrals.
Which tools to arrange your acccounting?
- Use Google to find an accountant in your area. Make sure to look for CPAs, as these professionals will be able to set up bookkeeping for your company.
- Check LinkedIn to examine your prospective accountants’ qualifications.
Your unique selling proposition (USP) is a phrase that summarizes your company’s competitive advantage.
Why is it good to know about competitive advantages?
A strong USP will help you to stand out from the competition.
How find competitive advantages?
The best way to determine your company’s competitive advantage is by gathering feedback from your target customer base. You might consider using a questionnaire or conducting an informal interview with some of these people if possible. Once you have done so, you should start looking for patterns in the feedback that you receive.
Which tools to use to find competitive advantages?
- The best way to find out what your target customer base needs from a company is by asking them. Using sites like SurveyMonkey or Google Forms can simplify this process and ensure that all of the information you need is gathered.
- You might consider using Google to find out what your competitors are offering and how they differ from you, since this will help you understand their USPs and identify any weaknesses that may provide an opportunity for improvement on your end.
- Use LiveAgent or other customer service software to communicate with your customers. Don’t hesitate to ask your customers for their opinion.
At the beginning of your startup, knowing what promotional activities are most effective can be challenging, but you should have a plan in place. Once you have found an activity that works for your business you should stick with it, just don’t fall into the trap of not regularly tweaking your promotional campaign else it will lose effectiveness over time.
Why is a promotional plan important?
Having an effective promotional plan will help to increase sales and introduce your business to more customers.
How to create a promotion plan?
The best way to decide on an effective promotional plan is by testing different activities and seeing which ones work best for your business. You could do this using Google Adwords, Facebook ads, or even through guerrilla marketing. Once you have found something that works well for you, it will be essential to stick with it until another activity proves even more effective.
Which tools to use to create a promotional plan?
- You may consider using Google Adwords to test different activities and see which one is the most effective for your company. This tool can be used as a search engine that delivers targeted, cost-per-click ads on both the Search and Display Networks.
- Google Ads, an online advertising platform that lets you place ads in search engine results as well as on non-search websites, mobile business apps, and videos.
- Social media marketing can be used to promote your company’s brand, increase sales, and get the word out there about what you have to offer. This involves performing creative promotional activities in public areas so that they become viral.
A business plan is a roadmap to success and should include key business milestones, timelines, and financials.
Why is a business plan important?
Having a perfect plan for your business will help ensure that your goals can be achieved in the future, while a realistic timeline for each along with specific action items increases the chances of completing them.
How to create a business plan?
What are the essential components of a business plan?
- Executive summary
- Company description
- Products and Services available
- Market analysis
- Strategy and Implementation
- Organization and Management Team
- Financial plan and projections
Which tools to use to create a business plan?
- Lean Canvas is a tool (a simple one-sheet template created by Ash Maurya) for developing a business plan that helps you break down your ideas into key assumptions.
- LivePlan enables you to track and quickly write your business plan, secure funding, and get insights to help you achieve your goals.
Summary of starting a business checklist
- Figure out what type of business you want to start
- Research the industry and competition in your area
- Create a list of qualifications
- Estimate the price of products/services
- Find a location for your new business
- Consider how much money you will need to get started
- Research how much it will cost to run your business per year
- Hire employees to help you run the day-to-day operations of your company
- Get all of the necessary permits, certificates, and licenses required by law
- Set up an email account and website with professional contact information
- Choose a name that is catchy and memorable
- Create an LLC or other legal entity
- Find office space that suits your needs or pick out furniture to outfit your existing workplace
- Establish clear goals for the future of the company with measurable objectives
- Determine who your target customer is, what they need, and how your product or service will help them
- Arrange your accounting
- Work on your USP and competitive advantages
- Make a promotional plan and stick to it.
- Wrap up a complete business plan with a timeline and milestones
How to start a business in 2022?
With the pandemic still creating so much uncertainty, starting a business in 2022 may feel more difficult than it used to. Therefore, a thorough business plan that prevents you from missing anything important is more important than ever before. Our Business Startup Checklist will help you to make sure that you are on the right track.
What do you need to do now?
The simple answer is to do your homework. You need to research the market, be aware of industry trends, and take a fresh approach that hasn't been done before.
What can you do a bit later?
It's important to remember that starting a business is just the tip of the iceberg. There are many different steps to grow your company into something sustainable and then eventually profitable. What you can do later might be more complicated depending on the industry, but this will rely heavily on what stage of business growth you're in. It will also be high time to take care of business insurance and social security. Choose an experienced insurance agent and take out adequate business insurance.
How much money do you need to start a business?
The amount will depend on your idea and how big it is. Generally, the more people involved in an idea or product, the more complex and costly it will be. However, if you're bootstrapping (starting with little outside funding) for example, this should help prevent many unnecessary costs down the line.
Do you need experience to run a business?
Not necessarily. The beauty of the internet is that you can now learn a lot from books, courses, and mentors, etc. who have been through it all before, as well as use technology to make things easier for yourself by finding ways to automate tasks or purchase items in bulk at a discount.
What are the most important qualities in a business?
The most crucial is to have an idea that solves or meets market demands. You'll also need good leadership qualities, critical thinking skills, and be able to communicate well with others, especially if you're trying to grow your company's team.
How to come up with a business idea?
The best way is by finding problems in the marketplace and devising solutions to them. This can be done by studying your own pain points, which could apply to everyone or just you as an individual.
What are the benefits of starting a business?
Some of the most notable ones include being your own boss, exerting control over what you do and how you do it, plus developing skills that can be used in other areas throughout life.
What are the disadvantages of starting a business?
Some of the most notable ones include losing money, not being able to work with family and friends (if you're trying to start your own company), as well as putting in long hours even when times get tough.
Will your product be competitive in its industry?
It will need to be, and there are many ways to ensure this is the case. They include finding a niche, having an innovative idea, as well as using analytics for your products when needed (e.g. Google Analytics) and optimization tools (Google Search Console, for example).