Small business owners tend to be more successful the more organized they are with determining and executing their start-up needs. Before actually putting a business plan into action, it is important to make a checklist that includes financing, business registration, legal work such as licenses and permits, and leasing a space. Think about what order these things need to happen in, such as creating a business plan in order to apply for a loan and registering a business with the necessary government offices before applying for a banking account. Here are some tips for what to include on a checklist of essential steps to getting a small business up and running, as suggested in the article “Setting Up a Small Business”:
#1 Business Plan
The absolute first step in setting up a small business is creating a business plan, which will serve as a road map showing how you will get financing; how your budget will be organized into money for leasing, licenses and permits, employee costs, advertising, improvements and build outs to a space; and your overall vision for how your business will operate and generate profit.
Once you have an idea of what your budget will look like, the next step is to get the necessary loans to start your business. A good place to look is through the Small Business Administration, which keeps a list of recommended commercial lenders for start-ups.
#3 Hiring and Employee Expenses
Employee wages and benefits can be one of the biggest expenses for small businesses. The hiring process is time consuming and can involve a little bit of a financial investment on your part to look into candidates’ legal backgrounds and references. The expenses of paying employees—benefits included—must be factored into your initial operating expense plans.
#4 Registering Your Business
In order to establish your business legally, it is necessary to register with the correct government agencies. There are several options for how a small business can form: a corporation, a sole proprietorship, a limited liability partnership (LLP), or a limited liability company (LLC). An Article of Incorporation is necessary for a corporation, while LLCs and LLPs require Articles of Formation or Organization. All of these articles must be filed with the state, and a business’s name must also be registered with the county or state of location. Finally, in order to be able to open a business banking account and register for federal taxes, a start up has to apply for a federal Employer Identification Number (EIN) through the IRS.
#5 Rent or Buy?
The next step to establishing a small business is finding a space in which to operate. If you are hiring employees, it is likely that you will not have enough space for them in your home, so it will be necessary to find a commercial space in which to operate. Most small business owners choose to rent instead of buy to save on initial costs. Many small businesses opt for Triple Net (NNN) Lease, in which lessees pay for space by the square foot and also pay for a portion of maintenance needs and property taxes.
If you have a small space for your office, you will most likely need to look into off-site storage options—which are typically relatively inexpensive—to leave more room for working in your commercial space. Look for a place that has both a strong gate and a combination lock, and be sure to check to see if it is climate controlled if you need to store important paper documents. If you do need storage for your office, try to go for file cabinets and containers that can be stacked to take up as little floor space as possible.
#7 Setting Up Communications
Another thing to add to your checklist is setting up a phone line for your office. Look into IP broadband phone systems with voice over versus a traditional phone system to potentially save a little money. You can also look at online auctions or used office furniture stores to try to find a secondhand phone system—often you can get a good deal on a functioning phone system if you look carefully.
#8 Creating Workstations
The next step is purchasing furniture for your office, which you can find deals on through used office furniture stores or even closing sales held by local businesses. In addition to looking for deals on furniture, try to maximize your use of each piece so you do not have to buy as much. For instance, a cabinet will do just fine as a place to put a printer, versus an entirely different table for it.
Instead of outright buying equipment for your office when you are first starting out, try to lease as much as you can, including copy machines, computers, and fax machines—if possible try to get units that can fax, print, copy, and scan all in one piece of equipment so you don’t have to purchase as much toner or ink. If you have major copy jobs, you can outsource these to a printing shop in your area and save a little money. See if you can set up a corporate account with a print shop and maybe get some discounts on regular print orders.
When you are planning a startup, make sure you create an extensive checklist before taking action!