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Starting a Business Checklist

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Last editedMay 20223 min read

What does it take to start your own business? Great ideas will only take you so far – you’ll also need to cover all practicalities from bank accounts to tax registration. Fortunately, our checklist for starting a business can help. Use this as a handy roadmap to get your start-up off the ground.

1. Research your market

Before you dive into a marketing plan, you need to know your market. This is why our starting a business checklist begins with extensive research. Look into competitors, along with their innovations, successes, and failures. Research the cost of raw materials and development to formulate a realistic price point.

2. Determine your USP

What makes your product or service unique? Every business needs a USP, or unique selling point. This distinguishes your business from the competition. You should be able to sum up what makes you special in a sentence or two. Refine this elevator pitch for investors and customers.

3. Choose a business name

For sole traders, this could be as simple as your own name. However, as part of initial research it’s important to make sure your name isn’t being used elsewhere, and that it makes sense. Try to come up with something catchy and keyword-friendly for best results.

4. Choose a business structure

Getting into the technical points of our checklist for starting a business, it’s time to choose a legal structure. You have four choices:

Sole proprietorship
Partnership
Limited Liability Company
Corporation or S-Corporation

The right choice will depend on your business size and legal needs.

5. Apply for a business license

With the structure determined, you can apply for all relevant licenses. You may or may not need a federal business license or permit depending on your industry. Those working in investment advising, drug manufacturing, food preparation, or selling alcohol, tobacco, and firearms should look at the relevant federal agency website. Each state has its own set of requirements, so this is important to research as well. You will also need to obtain a business license at the city or county level, even when working from home.

6. Register for an EIN

To get set up with the IRS, you may need to apply for an Employee Identification Number or EIN. This requirement applies to businesses that plan to hire employees, open a bank account, and file tax returns. Sole proprietors don’t usually need an EIN; instead, they can file tax returns using their Social Security Number.

7. Create a business plan

With the basics taken care of, it’s time to look ahead and start setting some goals. While it’s impossible to predict the future, a solid business plan will help you keep on track with what you want to accomplish. What are your goals for the first year and how will you accomplish them? What is your business mission statement?

8. Open a bank account

Even if you’re working as a sole proprietor from home, it’s important to separate your personal finances from your business expenses. Set up a dedicated business bank account to make tax filing and bookkeeping easier.

9. Set up a bookkeeping system

Along these same lines, set up a bookkeeping system before you make your first sale. This shows you all money flowing in and out of your accounts. Online bookkeeping software makes it easy to get started, with revenue recognition and automated report generation. In most cases, you’ll need to keep company documents like financial statements and tax returns for at least three years.

10. Create a brand identity and website

With brand identity as a basis, create a website that shows off your services. This may be set up from scratch or using an ecommerce platform with user-friendly templates. At the same time, set up a custom domain email to communicate with your customers in a professional way.

You don’t need a profile for every social media platform, but you should have some searchable presence. Whether it’s Twitter, Facebook, Instagram, or others, choose one or two platforms that best align with your brand and create consistent content to gain followers.

12. Take out business insurance

Accidents happen, so you should have a basic policy no matter your industry. Just be sure to read the fine print. Some business insurance policies will protect your premises, while others are designed to safeguard your finances from lawsuits.

13. Set up your office space

Whether it’s a home office or warehouse, you need a dedicated workspace. For those needing retail or office space, get in touch with a commercial realtor who knows the area well. Set up utility contracts, office furnishings, and amenities to suit your brand and attract employees.

14. Hire employees

Not all businesses will require additional employees. However, if you do, it’s time to consult our employee hiring checklist to get started. You’ll need to think about things like payroll, paperwork, and onboarding.

15. Spread the word

The final step on our starting a business checklist is the product launch. Devise a solid marketing plan that includes PR to get the word out using social media channels, personal contacts, and press. You’ve worked hard to get to this point, so it’s time to celebrate your new business.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.