I’m sure that you have heard many times that any successful small business start-up begins with a solid, well-written business plan. Certainly if you hope to attract silent or active partner or will be seeking outside funding, this will be a critical factor. However, before you can even put together a meaningful and coherent business plan you will need to address all or most of the factors in the following checklist.
Before actually putting out the welcome mat, a small business startup needs to assemble a checklist and make sure to cover all the bases. This checklist starts with such fundamental items as choosing a name for the business, and includes taking care of everything from financing to legal compliance, risk assessments and insurance. Other potential areas might include marketing, labour force and working conditions, wages and benefits as well as setting up a daily operating schedule.
Obviously some of the things will be only applicable on a case-by-case basis and some may not apply at all. Generally speaking though, the item(s) listed below are all essential for setting up and running a small business startup properly.
Choosing a corporate identity:
Potentially, this could include or relate to the name of the main product/service or the industry it is in and/or the name of the city/neighborhood location. This is important these days because it helps improve traffic from local search and in getting the right domain for any website. The name also has to take into consideration the type of business structure.
Choosing a corporate structure:
The structure is in fact another item on the checklist, and it’s important to decide early on what kind of form it will be (sole proprietorship, LLC, ‘S’ or ‘C’ Corp. etc). Don’t rush this step since it can have significant consequences down the road when it is too late or costly to make a change. You should definitely get qualified professional help with this decision. With the product, name and structure out of the way, it is time to get down to the meat and potatoes.
Market Study and marketing plan:
This step is one that is often overlooked by many entrepreneurs or small business startups. Often it is because the skills and materials needed for this are not at hand. However, if outside financing of any magnitude will be required, this step will often be a deciding factor in a successful outcome. You need to know your competition and target market inside out to convince any investor both private and corporate that you have a reasonable chance of success. Don’t make the mistake of only looking at your first year. Go at least 3-5 years out. Also, allow for best and worst case scenarios to show that you allow for unforeseen circumstances both positive and negative.
Fixed Capital Expenditures:
Most new businesses will prefer to rent or lease both buildings and equipment at the outset to keep startup expenses at a minimum. However, there will often be times when it is either too costly to rent or lease or purchasing outright is too good a deal to pass up. You should know and account for how this will ultimately effect both cash flow and the bottom line.
Fixed Overhead:
Many new entrepreneurs make the mistake of not differentiating between fixed and variable expense. To simplify the concept, fixed expense is the amount you would have to spend to stay in business if you never produced or sold a single product. It is critical to understand, monitor and control this category of expense since every penny saved or shaved drops directly to the bottom line.
Variable operating expenses:
Variable expenses are those that occur and grow and decline in line with levels of production and sales. It is still important to watch for significant variances here too of course but changes here will not have the same straight-line impact as with fixed expenditures.
Manpower requirements, labour overhead, working conditions and benefits:
Most business startups will either succeed or fail depending on the quality of manpower that they attract, motivate and retain. Don’t be foolish enough to believe that you can do it all on your own. Laying the proper groundwork here will pay untold dividends in the future.
Regulatory Compliance:
Over the years, we have seen multiple potentially successful business start-ups flounder on the rocks of regulatory compliance. Business permits, zoning requirements, OSHA, medicare, labor board, corporate liability, insurances etc. are all items that must be considered and attended to on an ongoing basis. Failure in any one of these areas could severely cripple the most successful business.
This is only a preliminary checklist to get you thinking in general about all the areas that you need to cover. From this checklist, you can develop your formal business plan. Once all this has been done, the small business startup owner can start reaching out for finance, which can include help from federal and state agencies, commercial loans from lenders and/or equity investments.
At no time during this process do you need to feel alone. An AIM mentor can assist with each and any stage. Since we tailor all of our client interactions by matching the appropriate mentor to each business or entrepreneur, we can be sure that you get the exact assistance that you need. If you would like to get more information or discuss your needs at no cost or obligation, please use our contact page
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