- Decide whether to buy an existing business, start a new business,
or buy a franchise.
- Decide on the form of business: general partnership, Limited
Liability Company, corporation, limited partnership, or sole proprietorship.
- Prepare a business plan.
- Estimate how much cash you will need to start your business
advertising, fixtures, decorating, inventory, fees, working capital,
etc. and estimate your monthly expenses.
- If the business will be incorporated, select the state of incorporation.
(Compare the features of corporation laws, organization fees,
and taxes of other states.) If you will form a partnership, draft
the partnership agreement Check local ordinances regarding zoning
permits, and licenses your business may require.
- File a business certificate (d/b/a).
- Determine whether to file for S Corporation status.
- Schedule incorporation to obtain maximum state tax savings.
- Check federal securities requirements.
- Check "blue sky" law requirements.
- Check costs of qualification in foreign states.
- Obtain a minute book, corporate seal, and stock certificates.
- Conduct a market analysis to determine the viability of your
enterprise.
- Select and reserve a corporate name (first and second choices).
- Select officers and directors (names, addresses, and Social
Security numbers).
- Develop marketing, advertising, and public relations plans.
- Develop a capitalization/borrowing/credit/ debt service plan
and cash flow plan.
- Develop income projections.
- Adopt corporate bylaws or an LLC Operating Agreement.
- Develop a reimbursement plan for expenses and time worked by
officers and consultants prior to incorporation.
- Select a date and place for the annual meeting of shareholders/directors.
- Open a separate business checking account. The bank will require
a certified copy of your business certificate or a copy of your
incorporation or LLC filing receipt. Establish banking procedures
and check-signing authority. Maintain a reserve for three to six
months of expenses.
- Install a business phone line. Use an answering machine or
answering service. Order telephone directory advertising.
- Mail and e-mail announcements of your business start-up to
the media, potential customers, and friends.
- Obtain free counseling services from SCORE (SBA Service Corps
of Retired Executives) or Small Business Development Centers (SBDCs).
- To prevent workplace violence, implement procedures for employee
screening, physical security, incident response teams, and a reporting
system.
- Obtain and design a Web site for marketing, order taking, and
communications.
- Identify all patents, trademarks, service marks, or copyrights
your business will have to register or purchase.
- Retain an attorney.
- If you have to borrow money, review potential sources of collateral
and prepare a loan package and business plan.
- Shop around for the best interest rate and terms on a loan.
- Find an accountant, preferably a certified public accountant
(CPA) familiar with tax requirements, and have him or her set
up recordkeeping, payroll, and tax-withholding accounts. Your
CPA should help you prepare cash flow and financial statements
for your business plan and recommend tax strategies.
- Obtain all necessary government forms, such as workers' compensation
and Immigration and Naturalization Service forms and forms for
unemployment insurance.
- Identify product suppliers, the mechanics of delivery of supplies
to your business, delivery time, and risk of loss.
- Lease or buy real estate to house your business.
- If walk-in trade is important, check vehicular or pedestrian
traffic patterns at the site you have selected.
- Draft necessary employment contracts.
- Prepare covenants forbidding employees and/or consultants from
revealing your trade secrets, trade lists, or other confidential
information and from competing with you after they leave your
employ.
- Prepare an employment application and job descriptions.
- Set up a recordkeeping system including payroll records.
- Ensure that your will and/or living trust provides for the
equity in your business.
- Draw up a buy-sell agreement for stock.
- Apply for an employer identification number and state sales
tax identification number.
- Establish credit procedures.
- Establish check-cashing procedures and safeguards.
- Lease or buy equipment.
- Establish an employee compensation and benefits package.
- Prepare an employee manual.
- Decide whether to hire or lease employees, independent contractors,
and/or utilize a special service firm for various bookkeeping
and payroll functions.
- If you are buying used equipment, check with your state department
of taxation to determine whether there are any liens for unpaid
sales tax against the equipment; check with the county and state
to determine whether there are any Uniform Commercial Code (UCC)
filings or chattel mortgages; and obtain a bill of sale from the
seller containing an affidavit that he or she has full right to
sell and transfer the equipment and that it is free and clear
of any and all liens, mortgages, debts, and other encumbrances
or claims of any kind.
- Have an independent appraiser calculate the replacement value
of your property to determine how much insurance you need.
- Find a competent insurance broker and obtain the following
insurance: workers' compensation; disability; liability; fire;
business interruption; life; automobile; crime; group health;
delayed profits; rental value; and flood. Compare premium prices
among agents.
Addtional Information
The Consumer Information Center
has pamphlets on the "Americans with Disabilities Act: Guide
for Small Businesses," "General Information Concerning
Patents," "Guide to Business Credit for Women, Minorities
and Small Businesses," "Resource Directory for Small Business
Management," "Running a Small Business," "Selling
a Business," and "Starting a Business." |
