Embarking on the journey of entrepreneurship is as thrilling as it is challenging. Having a comprehensive checklist can make the difference between success and failure—guiding you from the birth of your business idea to the moment you open your doors to customers. It’s the business equivalent of a pilot’s pre-flight checklist, ensuring everything is in order before takeoff.
This starting a business checklist covers the basics of getting things off the ground. Whether you’re a seasoned entrepreneur or taking your first steps into the business world, a checklist like this can be an indispensable tool to help you lay a strong foundation for your business.
Ultimate checklist for starting a business
- Conduct market research
- Validate your business idea
- Draft a business plan
- Create your brand
- Seek funding
- Register and license your business
- Find business insurance for your company
- Obtain an employer identification number (EIN)
- File for trademarks and patents
- Establish an operating budget
- Organize your business finances
- Build your supply chain
- Price your business offerings
- Determine your sales channels
- Design your product packaging
- Select your marketing channels
- Build your website
- Choose the right business software
- Hire employees
- Open your business
Opening a business requires more than just a great idea, it requires a comprehensive approach from the get-go. This checklist for starting a business can guide you through the process of launching your venture.
1. Conduct market research
Begin your new business journey by diving deeply into market research. This involves analyzing your potential customers’ needs, preferences, and purchasing habits. Conduct business competitive analysis to identify direct and indirect rivals, assess their strengths and weaknesses, and pinpoint gaps in the market a successful business could fill. Compile demographic and psychographic data, ensuring your product or service resonates with your target audience.
2. Validate your business idea
To validate your business idea, create a minimal viable product (MVP) or service to test in the market, ensuring it addresses a real problem or need within the industry. Conduct surveys, focus group sessions, and pilot sales among a small segment of your target market to gauge the response. This step is crucial because most businesses can benefit from refining their offerings based on user input.
3. Draft a business plan
Initiate your business plan by outlining your business structure, including ownership details, management hierarchy, and operational framework. Detail your financial projections and capital requirements, including a clear strategy for securing a business loan, investors, or other business financing and funding sources. Include a marketing and sales strategy aligned with your market research, providing a road map for acquiring customers and scaling your business operations.
4. Create your brand
Creating your brand extends beyond a snappy business name and an eye-catching logo design. This involves establishing a clear brand voice and personality that resonates with your target audience. Choose a consistent color palette and typography for your marketing materials to make your new business recognizable. These elements combine to form a visual identity and communication style, setting the tone for your customer’s experience with your brand.
5. Seek funding
Identify your initial funding requirements by calculating startup costs and decide whether bootstrapping, loans, investors, or crowdfunding best aligns with the financial strategy outlined in your business plan. Prepare a compelling pitch and necessary documentation, such as financial projections, to attract potential investors or lenders. Explore local small business grants and business incubators as additional resources, especially those tailored for new businesses.
6. Register and license your business
Determine the legal structure of your company—whether a limited liability company (LLC), corporation, general partnership, or sole proprietorship—because this will dictate registration requirements and tax implications. Officially register your business with your state’s Secretary of State, or equivalent, to legalize your entity and comply with government regulations. Additionally, research and obtain the necessary business licenses and permits, considering your industry, location, and relevant laws, by consulting resources like the Small Business Administration (SBA).
7. Find business insurance for your company
Assess the risks associated with your business to determine the types of insurance coverage you’ll need, such as general liability, product liability, property, or professional liability insurance. Consult with insurance agents specializing in business policies to get competitive quotes. Compare offers and select a comprehensive protection policy aligned with your business’s potential exposure and budget.
8. Obtain an employer identification number (EIN)
Apply for an employer identification number (EIN) through the IRS website. This federal tax ID is necessary for hiring employees, opening a business bank account, and paying required corporate taxes. The process is free and can be completed online, with immediate receipt of your EIN upon application completion.
9. File for trademarks and patents
Conduct a thorough search through the United States Patent and Trademark Office (USPTO) database to ensure your business name, logos, and unique products or inventions are not already trademarked or patented. If you’re in the clear, file for trademarks to protect your brand identity and patents to secure your intellectual property rights, following USPTO guidelines for submission. If your intellectual property is complex, consult a patent attorney to help navigate the filing process and avoid future legal challenges.
10. Establish an operating budget
Develop an operating budget by detailing all expected income and expenses, including overhead costs, supplies, employee salaries, and marketing expenditures. Use accounting software to track your finances in real time, making adjustments as needed to avoid overspending. Regularly review this budget against your costs to maintain control of your business’s operating expenses.
11. Organize your business finances
Organize your business finances by opening a company bank account, thus separating your personal and business accounts. This helps avoid confusion and simplifies tax reporting. Get a sales tax permit if your state requires one. Understand what business taxes you must pay and how much sales taxes you need to collect. Set aside funds in your business bank account to meet these recurring liabilities without disrupting your operational budget.
12. Build your supply chain
For businesses selling physical products, identify suppliers that meet your requirements for quality, price, and delivery timelines, ensuring they align with industry standards. Establish relationships with multiple vendors to secure a resilient supply chain. Implement supply chain management software to monitor product flow and maintain inventory levels.
13. Price your business offerings
Analyze the cost of production, market demand, and competitor pricing. This will help you to price your product appropriately, ensuring you cover costs while remaining competitive. Try out pricing strategies such as cost-plus, value-based, or tiered pricing to match your target market’s expectations and your business goals. Regularly revisit your pricing structure to accommodate fluctuating costs, market changes, and consumer feedback.
14. Determine your sales channels
Evaluate your target market to decide whether in-person, online, or omnichannel sales will best reach your customers and fit your product or service. For in-person sales, consider whether a brick-and-mortar storefront or pop-up shop locations will work best for you.
Similarly, consider what channels will work best if you’re going for an online approach—you may decide to build a website, or rely initially on established social media channels to attract customers. If you’re adopting an omnichannel approach, integrate your sales channels to provide a seamless customer experience, ensuring inventory and messaging consistency across all touch points.
15. Design your product packaging
Design product packaging to protect and preserve your products. Ensure logos, colors, and materials communicate the quality and values of your brand identity to your target audience, while meeting any industry regulatory requirements. Consider sustainability and the unboxing experience because these can influence consumer perception and contribute to word-of-mouth marketing.
16. Select your marketing channels
Identify which marketing channels—such as social media, email marketing, content marketing through blogs and videos, or pay-per-click (PPC) advertising—will effectively reach your target demographic. Allocate your marketing budget based on channel reach, customer acquisition costs, and conversion rates. This ensures a diversified approach, and avoids overreliance on a single source. Test and measure the performance of each channel regularly, using analytics to refine your strategy and maximize return on investment (ROI).
17. Build your website
Build a website or choose an ecommerce platform to accommodate your business model, whether you’re providing services or selling products. Ensure your site has essential features like mobile responsiveness, SEO-friendly design, and the capability to accept different payment methods, such as credit cards, Shop Pay, PayPal, Apple Pay, Google Pay, and buy now, pay later (BNPL) options. Consider working with a web developer to customize your site, or use online templates.
18. Choose the right business software
Identify business software to address your specific operational needs, such as accounting, customer relationship management (CRM), project management, and inventory management. Compare features, scalability, integration capabilities, and user reviews to select software that improves efficiency and fits your budget. Provide training for your team to maximize the software’s utility for your business.
19. Hire employees
Familiarize yourself with the legal requirements for hiring employees, which in most states include obtaining an EIN, setting up workers’ compensation insurance, and following labor laws. Develop clear job descriptions, conduct thorough interviews, and perform background checks to ensure candidates align with your company’s needs and corporate culture. Complete all necessary employee documentation, including I-9s, W-4s, and state-specific forms, to ensure compliance with employment regulations.
20. Open your business
Announce your business opening by activating your social media accounts, opening your storefront, or launching your product on a third-party store (whether a grocery store, app store, or online retail platform). You may go with a marketing plan that uses a mix of promotional activities, such as having an opening-day discount or event, email announcements, and targeted online ads to attract your first customers, reach your target audience, and generate buzz.
Starting a business checklist FAQ
What do you need to do first to start a business?
Once you have an idea for a business, conduct market research, create a solid business plan, and secure the necessary funding or capital.
What not to do before starting a business?
Avoid rushing into the market without a clear business plan. Other mistakes include underestimating the financial resources required, ignoring the legal requirements, or failing to do the necessary market research.
What is the easiest way to start a business?
The easiest way to start a business is to focus on products or services you’re familiar with, using digital tools for business management, and beginning with a manageable operation that can accommodate growth.
