Congratulations: You’ve come up with an amazing business idea that fills a need in the marketplace! Now, you’re ready to turn that dream into reality and start your own business… but where should you begin?
When you’re starting a business, the number of tasks to complete may seem overwhelming. It may feel as though the number of items on your to-do list is eclipsed only by the number of hats you have to wear. This is especially true for small business owners who are doing everything on their own. From completing legal documentation and making financial decisions to setting up social media accounts and choosing a CRM, you’ll definitely have your hands full.
That’s where a simple checklist comes in handy. Although your full to-do list will vary by industry, geography and other factors, you’ll likely need to complete the following basic tasks for any new business. Use this checklist to get organized and stay on track while you get your business off the ground.
Research the Market
You already have a great idea — but before investing all of your time and money into it, do a bit of investigation. Market research will help you determine if your idea can realistically become a successful business. First, gather some demographic data about your potential customer base. Then, use that data to answer the following questions:
- What’s the size of your potential customer base?
- Where do your customers live? How will you reach them?
- Does a demand for your product or service exist?
- What will your potential customers pay?
Once you’ve gathered that data, do some competitive analysis to determine if the market is already saturated with similar businesses. The Small Business Administration offers a SizeUp tool to make this easy. Use this online resource to size up the competition, find areas with customers but little competition, and identify underserved markets. You can also view data specific to your desired industry and geographic region, such as average revenue, salaries, suppliers and more.
Choose a Name
Before you can take certain legal steps, your business needs a name. The name of your business should convey what you do but also be memorable. Need ideas? An online business name generator can help. Once you’ve come up with a few options, ensure that no other companies are already using the same name. Use Google and corporate searches at both the state and federal level to make sure the name you want is unique.
Grab a Domain
Now that you’ve found the perfect name, reserve a domain to match. Domain registration sites will list available URLs. To help your site get listed in online search results, follow search engine optimization best practices. Generally, these include:
- Choose a domain name that ends in .com
- Avoid hyphens in your URL
- Aim for a domain name that’s short, easy to spell, easy to type and memorable
Define Your Business Structure
The business structure you choose determines how you’ll file your income taxes. Different structures also come with different legal considerations, including your personal liability. Familiarize yourself with the most business common structures, which include:
- Sole Proprietorship
- Partnership (Limited or Limited Liability)
- Corporation (C Corp)
- S Corporation (S Corp)
- Limited Liability Company (LLC)
You may want to discuss the implications of different business structures with an accountant or attorney before making this important decision.
Establish an Online Presence
In today’s marketplace, an online presence is essential for accessibility, marketing, and consumer trust. Get your website and social media accounts up and running as soon as possible to start establishing your brand and building recognition. While there are plenty of social media platforms to choose from, many businesses focus their efforts on Facebook, Instagram, Twitter, and LinkedIn.
When posting content on social media, focus on offering value to your audience, maintaining brand consistency, and putting a human face on your business to create transparency and trust. It takes time to build both credibility and an online following, so begin this process early.
Get an Employer Identification Number
When starting a business, you need an Employer Identification Number or EIN. You’ll use this number when registering your business name, opening bank accounts and filing taxes, among other administrative tasks. Apply for a federal EIN online. Some states require a tax ID number as well, so check your state government’s website.
Prepare Your Registration and Licenses
Certain types of businesses need to register and obtain licenses or permits. For instance, businesses that operate within federally regulated industries such as aviation, agriculture or alcohol need certain licenses and permits. Certain professional services — dentists and hairstylists, for example — must also have professional licenses. Check your city and state government regulations to ensure that you have filed the necessary paperwork.
Open a Bank Account
With your EIN, registration, and licenses taken care of, you can now open a bank account for your new business. Remember: mixing your personal and business finances is a bad idea. Make things easier at tax time by keeping your personal and business accounts separate.
Choose Accounting Software
Now that you’ve set up a business-specific bank account, it’s time to get (and keep) your accounts in order. The best way to accomplish this is by using accounting software. The right software will help you track every penny going in and out, manage your lists of vendors and clients, balance your checkbooks and more. Don’t even try to handle your business finances using spreadsheets — you’ll thank yourself at tax time!
Set Up Customer Relationship Management Software
You may think it’s premature to implement customer relationship management software when you only have a handful of customers. However, choosing the right CRM software early on will benefit your business down the line. From managing your leads to improving customer service through customization and automation, a CRM will make your life immeasurably easier.
When evaluating CRM options, do yourself a favor and choose a CRM that integrates with your accounting software. Using programs that sync with each other increases your efficiency, reduces the risk of double data entry and streamlines the customer onboarding process. There’s no better way to simplify your business operations.
Starting a business involves a myriad of tasks, making your to-do list seem overwhelming. Working through this checklist of basics will help you get — and stay — on the right track. And don’t forget to take advantage of tools that allow you to simplify or automate any part of the process. There are a lot of free resources out there, especially for small business owners, so don’t be afraid to reach out for help.