1. Have a plan.
Entrepreneurs who write formal business plans are 16% more likely to achieve viability and 19% more likely to get financing.1 The act of writing down a business plan will help you clarify and focus your thoughts. A business plan can be simple. It just needs to answer the following basic questions:
- What industry are you a part of? What are its major trends?
- Who are your competitors?
- Who are your target customers? What are their needs?
- What products and services do you offer?
- What type of marketing and sales tactics will you use to reach your customers?
- How will you deliver your products or services to your customers?
- What’s your overall projected cash flow in terms of funds going in and out of your business?
2. Complete the startup basics.
To properly start your business, you’ll need to complete a series of one-time decisions and setup steps.
- Select a name: Choose a name that’s distinctive and reflective of what you want your business to be.
- Register your business domain name: Watch out for expired domain names with problems.
- Choose a legal structure: Legal structure affects your business and personal liability, funding options, and taxes.
- Register your business: Get a Federal Employer Identification Number (EIN).
- Obtain permits and licenses: Your state, locality, industry, and business model can affect which permits, licenses, and regular filings you’ll need, including labor law filings, sales taxes, professional licenses, environmental and OSHA compliance, industry-specific regulatory filings, business licenses, employee immigration verification, and more.
- Get a business banking account: You’ll have a clearer view of your business’s performance, and it’ll be easier to separate personal and business finances.
- Consider trademarks, service marks, and DBA: Protect your intellectual property.
3. Start selling.
Nothing happens until you make a sale. One of your top priorities should be engaging with customers and convincing them to buy your product or service. Map out your sales process, including all the different sales methods you could employ, and figure out where your time and resources should have the greatest impact.
4. Develop a marketing plan.
Marketing involves getting the word out about your company and what you sell. Effective marketing captures the attention of your target customers and then leads them to the next step—reaching out to you.
What channels (social media, email, advertising, etc.) get you the most prospects? How can your marketing plan complement and support your sales efforts? Think of marketing as an investment, but also measure the results so that you can get the most return on marketing spend.
5. Make sure you have enough money.
Skilled management of cash flow is a key success factor for successful startups. Build a launch budget with realistic financial projections, including intermediate and long-term needs. Consider whether you’ll need to draw from your personal finances—either cash or time working without pay—as you launch.
Most owners “bootstrap” or finance the startup themselves, but you should also think of alternative sources of funding if needed (from friends and family, for example). By setting a budget with milestones, you can ensure you have sufficient reserves to carry your business until sales start coming in.
6. Keep expenses low.
A budget that’s closely tied to your business plan can help keep expenses under control during those critical early days. Focus your first spending on getting customers or marketing and sales. Using a business credit card for expenses can help you track cash that’s leaving your business. Be disciplined in your purchasing decisions and avoid buying items that don’t directly help your business. Stretch your dollars by buying used equipment, and seek suppliers that offer discounts.
7. Manage your time.
Focus your time on sales. No one will ever be as enthusiastic about your company as you, so you need to be the top salesperson from the beginning. Your most precious resource is your time—plan your schedule and structure a time tracking system to hold yourself accountable to meeting your business’s goals.
8. Get the right help when you need it.
If you’re going to focus your time on high value-added tasks, like marketing and sales, you may need to hire or contract with others for support. Add staff to oversee the simpler day-to-day operational activities so you can devote more time to adding customers.
Pay others (individuals, contractors, or service companies) to do tasks that are time consuming or require technical ability, such as accounting and bookkeeping. Consider your team of advisors--CPAs, attorneys, consultants, and business peers-- who can help you make decisions and stay on track. And check out SCORE, an organization that provides free business mentoring.
Starting a business should be exciting. By staying on task with your checklist, you can be well on your way to building a successful business.
Follow this startup checklist to launch your business successfully.
Talk to a small business banker at 877-279-3083, make an appointment for an in-person or virtual appointment, or visit truist.com/small-business to find out how Truist can support your business startup.