What do you need to start a business? We can tell you that this to-do list is pretty extensive! At a minimum, you’ll need a business plan, to set an intention to incorporate or form an LLC, and register for trademarks that are unique to your brand. You’ll also need a tax ID, business licenses, insurance, and so much more!
However, this to-do list is not nearly so long that it becomes impossible to start a business. We asked 35 entrepreneurs to share some of their small business essentials with us. From domain names to mentors, they reveal what to prioritize to properly launch a startup.
“It’s a crazy world out there. Having liability and E&O insurance helps you sleep a little better. While not cheap, it isn’t overly expensive either.
Many clients, especially the larger ones, will want you to have insurance per contract requirements. This takes a little capital but does make you feel better when there is a small safety net.” — Edward Marchewka, Founder, CHICAGO Metrics®
2. Cash Flow Forecast
“Company founders need to build a cash flow forecast which is very conservative and, as part of that analysis, ensure they will have adequate capital.
Revenue almost always takes longer to secure. Costs are almost always more expensive, with unforeseen items frequently becoming a challenge. Company founders need to ensure they are fully prepared with adequate capital, so they have the runway to get the business off the ground.” — David Garcia, CEO, ScoutLogic
3. MVP (Minimum Viable Product)
“Demand testing and creation using an MVP (minimum viable product) is the most important place to start. Business owners should prioritize costs that focus on finding product/market fit or quantifying/solving the demand side of the business first.
The best way to do that is to define these aspects very specifically: Target user, their pain point, and your company’s key feature that solves their pain point.
From there, I would suggest creating a simple website with a landing page that clearly describes the pain point and your solution. You can test some Facebook/Instagram Ads to your target market asking for users to sign up for a beta of what your solution to their problem would be (essentially what your small business will be). Using that data, you can then determine if it’s a viable business idea and worth the investment. Or, if it’s best to move on to the next idea before spending loads of money on infrastructure and supply.” — Jacob Rosenberg, President and Co-Founder, Tajima Direct
4. Working Capital and Home Capital
“When starting a business, a person needs three things: a business plan, a marketing plan, and money. Initial capital to get the doors open. Working capital to keep the doors open.
Additionally, don’t forget about home capital. That is the money to pay bills at home as you work toward making a profit.” — Tom Scarda, CFE, CEO and Founder, The Franchise Academy
5. Multiple Sales Funnels
“One thing every entrepreneur needs when they get started are multiple sales funnels they can tap into. You need to know the right places to be to sell your product or service when you get started as an entrepreneur.
Once you learn where your target customers are, making sales becomes much easier.” — Brett Prentiss, Co-Founder, Instinct Marketing
6. Comprehensive Business Plan
“The small businesses we service range from mom and pop restaurants, to entrepreneurial startups, to long-established small manufacturers. Navigating the business world in the best of times is tricky enough but add market uncertainty, especially in the pandemic era and the post pandemic future, and it’s clear that getting a handle on how your business is prepared for that future will be the difference between success and failure.
A comprehensive business plan with crisis and pivot plans is a must. These are personal decisions and based on the industry and ability of each business owner. One thing we find in common with far too many of these small business owners is their grasp of financial risk management (or lack thereof) inherent in all stages of a business’ life.
A JPMorgan Chase study of 597,000 small businesses a few years ago and found that the median small business has enough cash on hand to hold out for only 27 days without cash intake. The Small Business Administration advises business owners to have three to six months’ operating expenses in a cash (in a checking, savings or other easy to liquidate position) to weather financial storms. Those that do are better positioned to survive as cash flow crisis.” — Steve Bulger, Mid-Atlantic Regional Administrator (acting), U.S. Small Business Administration
7. Business Bank Account
“One of the most important things you need to do when you are starting your own business is to open a separate bank account for the business. Without a separate account from your own personal account you run the risk of co-mingling your finances.
This can have two detrimental effects. The first is that it will become extremely complicated to do the accounting for your business and keep track of what is personal versus what is related to your business. Second, if you are ever sued, by co-mingling you run the risk of having your personal assets included in the settlement or as a part of the final outcome. Opening a new account for the business will protect yourself and your business.” — Kevin Groh, Owner, Cachi Life
8. Business Differentiator
“Every entrepreneur looking to start a business, first, needs to identify how their products or services can change the market. What would this business do differently to other competitors in the marketplace?
Having a market plan comes in handy. It means you would have studied your business competitors properly and you would have been able to identify areas where these businesses lapse and where you and your business can come in and wow your customers off their feet.” — Madison Campbell, CEO, Leda Health
9. Networking Chops
“As an event planner, it’s critical to network. It’s imperative to get in front of hotels and other venues, to meet in person to build that one-on-one relationship. Once you get that one-on-one, get proper business cards. I’ve gone through three different designs in three years. It wasn’t until I got a marketing company involved that I found really how to get who and what I was across in my business card.
Then, answer the phone. Almost half of my business comes from picking up the phone on the first ring. Typically, whomever gets the first conversation with a client will be the first person to book that client.” — Keith Willard, Founder, Keith Willard Events
10. Great Team
“When launching a startup or new business, entrepreneurs often forget about the most important part of the company: the team. A strong team of talented people is the key to growing a successful business. However, building teams is hard. Before starting a business, entrepreneurs need to determine the criteria for what makes the right team member.
Not all new entrepreneurs realize how long it takes to find, interview, and hire a new employee. When your team is already small, or you’re hiring during a period of economic volatility like COVID-19, the process can take a lot of time if you haven’t already clearly established what success at your company will look like. You don’t want the hiring process to become a distraction from other essentials, like improving your product or finding new customers.
As you grow, you will hire as needs arise. Instead of waiting until you have a need, start creating a pipeline of great candidates that you stay in touch with right now. This allows you to explore and open a dialogue with future candidates. This can help eliminate the growing pains of the hiring process. Not only will it save you time in the long run, it will help you build the best team possible.” — Manick Bhan, Founder and CTO, LinkGraph
11. Test Value Proposition
“The first thing you need are a small population on which to test your value proposition. You will need to receive insight about what they don’t like about the alternatives to your solution. Then, you need to provide examples of what they don’t like, tell you why they don’t love the other solution, provide insight on why they love your solution, and share where more people are that would like your solution.
The second thing you will need is a customer relationship management solution. Organizing and standardizing your sales efforts will make it easier to define what’s working, what needs to be improved, and complete one-off annual reports in seconds. Stay organized and get things done fast.” — Nick Swekosky, CEO, Market Metrics
“I think an absolutely essential aspect of starting your own small business is having the gumption not to give up. You have to be comfortable with uncertainty and not let the ups and downs of it all affect your long-term goals.
This sounds like maybe ethereal over practical advice. However, in my experience, the logistics and paperwork is much easier than keeping your head up and your motivation going when times get tough. You need the entrepreneur’s mindset. You need to remain unfettered by the many storms that are certain to come as you embark on the journey of your own business. This can be difficult, but it’s this mindset that sets those who make it apart from those who don’t.” — Christine Wang, Founder, The Ski Girl
13. Business Registration
“Registering a business is very easy for most small businesses when it comes to file the name with state and local governments. All you will need is your name and tax ID number. If you don’t register your business, you could lose out on personal liability insurance, legal benefits, and tax benefits.
Remember to also stay up to date with registration requirements. Some states require additional information depending on the structure of your business. File the extra documentation with your state tax board or franchise tax board.” — Dr. Tim Shu, CEO and Founder, Vet CBD
14. Entity Formation
“An important step for a small business owner to take is to select the type of business entity that works best for them and to make the appropriate filings with the state(s) in which he or she plans to do business.
When a business owner is deciding between different entities like a partnership, corporation, or limited liability company (LLC), they should consider the tax classifications and the expected sources of funding. On one hand, C Corporations grant a lot of flexibility in raising capital, as they can raise funds by issuing a potentially unlimited amount of shares to an unlimited number of investors. On the other hand, LLCs can provide benefits to owners through ‘flow-through’ taxation.
‘Flow-through’ or “pass-through” taxation means that money flows through the entity to the owners. The owners are taxed, and the entity is not. This avoids double taxation (applicable to C corporations) for the owners.
In addition to the potential tax and capital raising advantages, LLCs and corporations also have the added benefit of limiting business owners’ liability. In the unfortunate event of a lawsuit against the business, a company that is properly set up and well-maintained can help keep the owners from being held personally liable. Whatever the correct entity is for a new business, it’s always an important first step to consider the options and seek the guidance of experienced attorneys and accountants to choose accordingly.” — Dylan Franklin, Associate Attorney, Romano Law PLLC
15. Build Credit Score and Savings
“Build up your credit score if it’s less than 700. You’ll want a good score to open your business account, which can open up some credit lines when you’re strapped for cash. Believe us, this isn’t a matter of if, it’s a matter of when.
You also need to secure a little nest egg. Having an emergency fund to fall back on personally can seriously help with your stress levels.” — Maia Monell, CMO and Co-Founder, Nav.It
16. Study Target Market
“Starting a small business is not easy, not even mentioning the current global crisis. You would most likely resort to a remote working format, and you’re in for a big challenge with that. You have worldwide competitors in social media. It’s crucial to be known for your brand name.
It doesn’t matter if your business will be a clothesline, selling wellness products, or baking cakes, as long as it’s in line with your interests and hobbies. What matters is how you execute it. People crave for authenticity and you have to satisfy them. That’s why you have to build your identity by strategizing what trick will you do in your marketing and what’s different about it so you could tickle their interest.
Then, mark your target market. You can’t just create a business without studying the people around you. Know the purpose of your service and to whom it will benefit the most. Learn about demographics, geographics, and your motivation why you think this business can help them. This will narrow down your audience. Then, you will be able to focus on them and their needs only, which will be perfect for a startup.” — Chelsea Hunt-Rivera, Co-Founder, Honest Paws
17. Determine If This Is a Viable Business
“The very first thing entrepreneurs should do is ask ‘is this is a viable business?’ Does the Venn model work for this business?
This answers three questions. 1) Is there a need in the market for what I am about to offer? 2) Am I competent to offer it, and offer it well vs the competition 3) Can I monetize it?” — Tej Brahmbhatt, Managing Partner, Watchtower Capital
18. Written Agreements
“Write out solid agreements with any partners or investors.
Whether it’s a partnership agreement, employment agreement, investor agreement or even a non-disclosure agreement. Even if that partner/investor is your spouse. That way if things go south, the document controls and not someone’s opinion or hurt feelings.” — Diane Danielson, Chief Strategic Advisor and Founder, Future Proof Research Collaborative
19. Clear Brand Message
“Before you go running out to design a logo, or spend days worrying about your brand colors, get clear on WHO you want to speak to, HOW you want to be perceived, and WHAT you want to say.
What’s important in the beginning is to know exactly what you want your messaging to do. Brainstorm words and feelings you want your business to embody. Loud or neutral? Approachable or polarizing? Feminine? Spiritual? Rebellious? You get the idea.
Once you have a clear idea, make sure your brand messaging and language fits with how you want to be perceived. If you’re struggling, look up brands you enjoy (in any industry, not just your own) and write down what it is you like about them.” — Tessa Hull, Success Coach, No Right Way Ltd
20. Supportive People
“Surround yourself with people who have been in your shoes. Friends and family can be a needed support, but they’re probably not going to explain how to file a trademark or help you decide which eCommerce platform to go with.
Reconnect with old bosses and colleagues. Talk to the neighbor you know started her own business. See if nearby business colleges offer free assistance. Connect with local business owners. Those of us who have been in your shoes know how hard and lonely it can be getting started, so we’re usually pretty open to helping out.” — Meaghan Thomas, Co-Owner, Pinch Spice Market
21. Unique Business and Domain Name
“To start a business, an entrepreneur needs to come up with a unique name for their company. This name should be distinctive enough such that it helps your business stand out from the competition. It should also communicate your unique selling proposition to customers and why they should buy from you in the first place. To make your business name easy to remember, I would recommend picking something that’s 1-2 words maximum.
You want to make sure the .com domain name is available since you will also need a website for your business.” — Hassan Alnassir, Founder and Owner, Premium Joy
22. Growth Plan
“No matter what size or type of business, it’s a good idea to have a 1 to 5 year plan. It’s important to have a written plan that organizes all your ideas and research into actionable steps. Planning at the beginning can also reduce risk and allows you to work more efficiently later.
Once you have a detailed plan, the next step is to build a checklist. Building a checklist is important because it takes a high level business plan and converts it into a document focused on execution. Checklists also ensure consistency and completeness in carrying out a task. For our startup checklist, we include everything required to get from day zero to launch day. This includes corporate structuring and entity formation; legal and accounting prep; compliance, hiring, product building; distribution and marketing; operations, partnerships, and business development. The business building at the beginning can be daunting so mapping out all the steps can make it more manageable. Be extremely thorough. Write out every critical task, corresponding notes, status, and owner.
As your business starts to scale, you will need to constantly adapt and adjust your growth plan. The best entrepreneurs are comfortable being uncomfortable, adapting as they go.” — Phil Santoro, Co-Founder, Wilbur Labs
23. Cash Flow
“While administrative tasks like licensing and brand identity are foundational, one of the most important essentials entrepreneurs can focus on is securing cash flow.
This can look like thoughtfully establishing billing and invoicing practices or exploring alternative funding options like factoring — before you need it. Securing cash flow is especially important to entrepreneurs also looking to pay themselves a salary to cover personal expenses and help make ends meet.” — Ebonie Townsend, Blogger, Soccer Momish Blog
24. Customer Service
“Customer Service is KING! Great customer service, even after the purchase, is a big determining factor on whether your business will be successful.
Make sure you are under-promising and over-serving. Go above and beyond for your customers ever after the purchase is made, these practices ensure repeat business.” — Tiffany Williams, CEO, Rich Girl Collective
25. Paid Consultations with Attorneys and Accountants
“Business lawyer here! I would highly recommend that new business owners set aside $1,000 (at least) to schedule paid consultations with an attorney, accountant, and business advisor. That’s probably more than what you’ll need to pay for those consultations, but it’s much easier to budget more than what you’ll need and allocate that overage somewhere, rather than under budgeting and needing to pull from an already-depleted budget.
Why paid consultations? The best advisors are going to charge for their time. In my experience, you’ll also receive better advice if you pay someone for their time. They’ll treat you as a client and treat your more seriously. These professionals can offer referrals to help you out and offer tips about things you might not have thought about.” — Andrew Legrand, Owner and Founder, Spera Law Group, LLC
26. Analyze Competition
“Invest time in observing what the competition is doing.
Could you have an angle that they aren’t covering, with your business idea? What makes their business model successful? Can you spot their weaknesses? What could you learn from them?” — Sharon van Donkelaar, CMO, Expandi
27. Research COVID Compliance
“When starting a business during the pandemic you need to make sure you have all your documents together and prioritize your to do list. Research what the requirements are in your state and county regarding Covid-19 compliance. Take calculated risks. Then, start promoting your soon-to-launch business on social media and go for it.
The more organized you are, the better you can execute and make decisions. Remember over preparing is better than not being prepared.” — Pooneh Ramezani DDS, CEO, Dr. Brite, LLC
28. Crisis Management Plan
“One of the most important things every entrepreneur needs is a crisis management plan. New businesses are risky and there is very little room for improvisation. Business owners will be stressed enough. The last thing they need is to panic in case things don’t go as planned.
Having a detailed crisis management plan, however, can help them prepare for unexpected situations and respond properly. This plan should be as detailed as possible. It needs to cover all of the worst case scenarios. I know I found mine quite useful in the first year of business since I encountered numerous challenges in that period.” — Malte Scholz, CEO and Co-Founder, Airfocus
29. Conduct Research and a SWOT Analysis
“So many entrepreneurs want to jump right into launching a business that they forget to take basic steps along the way. I recommend creating a business strategy that sets the foundation for your success. This comprehensive strategy should outline your goals, identify plans for growth, and define your action steps to get there. You can use a SWOT analysis as a jumping-off point during this exercise. It will help you understand the competitive advantages and disadvantages you need to address.
Another tip? Do your research. No business strategy is complete without a keen understanding of your industry. You need to go beyond basic market research if you want long-term success. A great starting point is to create an ideal customer profile. This will help you address big picture questions about your audience and glean insights about them that will be critical to your success. Your strategy is not only based on your goals but the goals of your target audience.” — Tory Gray, CEO and Digital Marketing Strategist, The Gray Dot Company
30. Conduct Market Research
“Conduct market research. This will tell you if there’s an opportunity to turn your idea into a successful business.
Conducting in-depth market research on your field and the demographics of your potential clientele is an important part of crafting a business plan. This involves running surveys, holding focus groups, and researching SEO and public data.” — Caroline Lee, Growth Marketer and Co-Founder, CocoSign
31. Exit Strategy
“An exit strategy is an evacuation plan every business owner should have at the beginning of their entrepreneurial journey. It is a plan for selling company ownership to another company or investors. This way, business owners have a way out for reducing or liquidating their stakes in a company. If a business is not advancing as expected, a business exit strategy is a way of minimizing the loss.
Some examples of exit strategy include the following:
1) Merger and Acquisition (M&A). This is when one company merges with another one, or a larger company buys it.
2) Selling to a friendly individual. When business owners sell their company to an individual who has more knowledge (or passion) to run it. Then, the owner profits from that sale.
3) Liquidation and close. This is when the company owner shuts down a business and liquidates it.” — Branka Vuleta, Founder, LegalJobSite
32. Costs and Pricing
“One of the important pre-conditions of new business success is a fair understanding of future costs. One of the areas small business owners often overlook is the cost of marketing. People who didn’t have previous business experience tend to believe that they will just need to set up the website and create social media accounts with some content.
The ‘cruel reality’ is even great websites require constant maintenance to improve conversions. Ads are expensive. Google won’t show you high in search results unless your domain has authority. All of that requires time, expertise, and money. The next unexpected finding many small business owners face is that the first sale to a customer may have a negative ROI. Thus, the marketing system should work to generate repetitive purchases.
Find someone to craft a marketing strategy before taking any money out of their pocket. On top of knowing what to do, you will also get an understanding of what your costs will be. This will get you prepared for managing your cash flow and might potentially impact your pricing decisions.” — Justin Hawes, CEO, K&N Sales
“Self-funding or borrowing from family is the starting point for most small businesses. How you go about getting that initial money is one of the first, and most stressful, financial choices a new business owner should make.
The decision will impact how you structure your business. Unless you’re sitting on a wealth of inheritance money, your first step is to determine how much funding you need. Every company has different needs. There’s no general-purpose financial solution. The decision to woo investors, seek a bank loan, or bootstrap the business all by yourself, has to be made upfront. Your choice will define the financial future of your business.” — Jim Pendergast, Senior Vice President, altLINE Sobanco
34. Marketing and Advertising Strategy
“As great as your product may be, consumers can’t buy it if they don’t know it exists. A well-thought out marketing strategy is the foundation to achieving business goals.
First, evaluate your budget and figure out what you can allocate towards marketing and advertising. If you lack the funds, make sure you have the time to put in the sweat equity. Social media, video tutorials, and blogging are just a few cost-efficient marketing options for small businesses. Track and measure the effectiveness of your marketing strategy on a regular basis. When you know which marketing methods and advertising campaigns are the most effective, you can focus your efforts on those and drop any less efficient strategies. This will save your business time and money by putting your marketing dollars where they have the biggest impact.” — Linda Chau, Founder and CEO, PAAPR
35. Marathon, Not Sprint, Mentality
“It’s a marathon, not a sprint. Building a company, a brand, a positive reputation, a cohesive team and a roster of great clients takes time. Success is measured in longevity versus the instant gratification of a win or a hire. And what I didn’t know then, what I clearly know now, is the amount of enjoyment you have over the long run.
In the beginning, we couldn’t get there fast enough (whatever ‘there’ is). Upon reflection, it is the journey that was the best prize.” — Stephen Brown, CEO, FUSE Create
Ready to start a small business? MyCorporation is here to help! Give us a call at 1-877-692-6772 or visit us at mycorporation.com.