You have a great idea for a new business venture. You’ve felt the bolt of inspiration, the rush of energy and you’re eager to make it work. But before you get wrapped up in those new business butterflies, you’ll need to do some careful planning to ensure you actually succeed. That’s where a business planning checklist can help.
As you go from concept to company, you’ll need to answer some key questions: How much startup money will you need? Who will handle the books? How can you create a beautiful and functional website for your new brand?
If you’re ready to find the answers, read on. Use this business startup checklist as your personal to-do list. Check off all of these boxes and you’ll be well on your way to kicking off a booming business.
Ready to launch? Build your business website today with Wix.
Your ultimate business startup checklist
01. Flesh out your business idea
The first step toward launching your company is coming up with an idea. Often, the most successful businesses are driven by a personal passion. If you're obsessed with home improvement projects, then you might start a construction or handyman business. If you spend 90% of your free time working out, then you might choose to open your own gym.
Once you have your idea, you need to make sure it’s business-worthy. Find out by diving into market research. Investigate the potential market size in your niche. Research your likely competitors, and reach out to would-be customers to learn why they gravitate towards particular products or services.
If you’re creating a brand-new product, develop a prototype that you can test. Then, use all of this information to determine your unique selling proposition (that is, the thing that makes your business stand out).
02. Estimate your startup costs
To get your company off of the ground, you’ll need at least a little bit of startup capital. The cost to start a business will vary based on the type of company you’re opening. An online business, for example, will likely cost less than a company that requires a storefront on Main Street.
When calculating your startup costs, consider your expenses for equipment, property rental (including the initial deposit), production, inventory and marketing. Add in the cost of any licenses, fees or permits you’ll need to acquire. Be sure to set aside a contingency fund for future expenses. It takes most businesses two-to-three years to turn a profit, so your savings will help you cover operational costs in the interim.
03. Write your business plan
Writing a business plan is arguably the most important to-do item on your business startup checklist. It will serve as the blueprint for your company’s formation, with details about your goals, strategies and financial projections. You’ll share your business plan with investors, banks and potential partners in order to earn their trust, so it must be compelling and impactful.
You can create a one-page plan that gives a quick snapshot of your business. Or, you can create a multi-page plan that dives into the details. No matter which format you choose, your business plan should include all the basics of how to start a business, including these items:
Executive summary: Provide a brief overview of everything in your plan, including a summary of your business and its goals.
Company description: Include your name, mission statement and goals more in detail.
Products or services: Create a list of your offerings, proof of concept and pricing.
Market analysis: Provide an overview of your potential market size, target audience and your competitors.
Marketing and operations plan: Explain how you’ll reach your customers and grow your brand.
Management and organization: Describe your company’s structure or include an organization chart.
Financial projections: Outline your startup costs, sales forecasts and needed funding.
Appendices: If you have anything further to add, provide materials in this section.
Not sure where to begin? Use this business plan template as your guide. Your plan will be a living and breathing document, so you’ll want to review and update it regularly pre- and post-launch.
04. Find funding
If you’ve followed all the steps up to this point, then you should know how much money you need to start your business. Now, it’s time to find those funds. If you already have enough money in your personal savings to get started—or if you have multiple income streams—you may not need additional startup money.
No need to worry if you don’t have the cash on hand. There are plenty of ways to generate funding these days. You can explore loans and grants from organizations like the Small Business Administration, or you can secure a business loan from a local bank. Angel investors and venture capital offer two other potential funding sources, especially for startups or businesses looking to give up equity in exchange for an investment. So, too, does crowdfunding, an approach that leverages platforms like Kickstarter or Indiegogo to collect money from individuals who want to support your new business.
05. Choose a location
Every business needs a place to call home. Even if you’re thinking about how to start an online business, your company will eventually need a mailing address. Choosing the right location for your business is an important step, because it impacts your taxes, revenue and legal requirements.
Understand the rules in the jurisdiction where your business will reside. If you’re starting a business that needs a physical presence, look carefully at the location of potential office and retail sites. Consider: How accessible is it for you and your employees? How close is it to your product suppliers? Is there potential for a lot of foot traffic?
If you plan to lease commercial space, hiring a commercial real estate agent is a wise move. But if you don’t have your heart set on a specific location yet, then check out this list of the best states to start a business.
More resources for starting a business in your state
06. Pick a business structure
Your business structure will determine how much you’ll pay in taxes and your personal liability. Most business owners will choose one of four structures:
Sole proprietorship: You own the business yourself, and you assume all of its legal responsibilities. You report profits and losses on your personal tax return, and you are liable for any debts or legal issues.
Partnership: Two or more people share responsibility for the business. They also share in the legal and financial obligations, and they split the profits. Each partner reports profits and losses on their individual tax returns.
Corporation: Your business is a legal entity separate from its owners. Corporations pay corporate income tax on profits, and individual shareholders are usually not held liable for the company’s debts and legal obligations.
Limited liability corporation (LLC): In an LLC, the business owners operate as “members'' of the company. As the name implies, LLCs offer the limited liability protection of a corporation. In this structure, members can choose whether to be taxed as a corporation or as a “pass-through entity” to the owners’ individual tax returns.
07. Select a business name
At this stage of your small business startup checklist, it’s time to start brainstorming what you want your business to be called. Choose a name that best reflects your company’s mission, vision and values. The best company names are both memorable and unique.
A smart approach is to come up with a list of a dozen or so potential names. Then, start doing some research. First, check the U.S. Patent and Trademark Office database to make sure that your chosen name isn’t already trademarked by another company. You should also check with the Office of the Secretary of State for the state in which your business is located to see if another business has claimed your name.
Finally, conduct some thorough online searches to ensure that you can use your company name across your web and social media platforms. You can do a domain name search to see if the domain name you want to use for your website is available.
Need some instant inspiration? Try Wix’s free business name generator.
08. Create a website
As you move closer to your launch date, you’ll turn your focus towards marketing. If you have an online business, your website will serve as the public face of your company. If you have a brick-and-mortar business, your website will be your top online marketing channel, spreading the word about your company and enticing customers to visit your physical location.
Today, website building platforms make it easier than ever to create a beautiful website. When you build your website with Wix, you’ll have access to more than 800 professionally designed templates that reflect all types of businesses. Wix’s advanced customization options allow you to modify any template to your liking, with easy-to-use drag-and-drop editing capabilities along with AI-assisted tools.
With Wix, you also get free and secure web hosting, a custom domain name and email name ideas that you can turn into your business email address. What’s more, your website dashboard can truly become the one-stop-shop for all your business management needs, including payment solutions, appointment booking, advertising, email marketing, search engine optimization (SEO), hundreds of third-party app integrations and more.
Need more help with marketing and design? Check out Wix’s free business tools.
09. Register your business with your state
Let’s make this official. Registering your business with your state offers many benefits, including personal liability protection, legal and trademark protection, and tax benefits.
Additionally, it allows you to hire employees and gives you more access to lending and funding options. If you’re establishing a business in the U.S., your location and business structure determine the steps you’ll need to take in order to register your business.
10. Get your EIN number
You must also register your business with the Internal Revenue Service (IRS). The IRS will provide you with an employer identification number, or EIN, which is essentially a Social Security number (SSN) for your business.
An EIN allows your business to be recognized by the government when it comes to paying taxes on the state and federal levels. Furthermore, you’ll need a tax ID number to hire staff, open a business bank account and apply for any necessary business licenses or permits.
There is one exception here: a sole proprietorship with no employees does not have to register with the IRS.
11. Apply for licenses and permits
Identifying the type of licenses or permits you’ll need to start your business will require a little bit of legwork. That’s because the rules vary by industry, state and even municipality.
Only a few businesses (such as investment advising, drug manufacturing and ground transport) require federal licenses. However, many types of companies will need state licenses, especially those that provide specific services to customers (such as accountants, real estate agents or hair stylists).
If you’re starting an eCommerce business, you will also need a sales tax permit if your state collects sales tax. According to Sabrina Papini, marketing director of eCommerce and marketplaces at Avalara, failing to do this is a common compliance mistake made by business owners. "Neglecting to register for sales tax in states where your business has a tax obligation can lead to penalties, fines and audits," Papini says. "Businesses must identify their nexus, which is a connection between their operations and the taxing authority, and register accordingly."
On a local level, most cities or counties require that you have a business license. This can even be true for at-home businesses. Your best bet is to check with state and local officials to make sure that you have all the official licenses and permits you need.
12. Create an operational plan
There are many types of business plans, and one of the most important for startups is an operational plan. This will determine how you and your employees will conduct your day-to-day business.
Your operational plan should include details on how your company will process orders, pay bills, pay taxes, maintain permits and manage internal workflows. Look for places where automation can help you get more efficient, such as task management, customer service and scheduling. Finally, start investigating the type of software you might need, including items like point-of-sale systems or customer relationship management (CRM) databases.
13. Get help with accounting
Speaking of software, one of the biggest needs for almost all small businesses is some sort of automated system for financial accounting, tax management and budgeting. If you’re already a financial whiz, you may be able to handle this on your own. But for the vast majority of businesses, investing in accounting software is a serious value-add.
Look for solutions that can help you manage and create balance sheets, profit and loss statements, and cash flow statements. Because businesses are required to keep financial documents on file for three years, you should seek a solution with documentation storage capabilities.
If you don’t use accounting software, then be sure to work with a licensed business accountant who can help you balance the books, keep records and stay compliant.
14. Hire employees
If you’re planning to build a team to help you run your company, then hiring employees is a must-do item on your business startup checklist.
First, determine how many team members you’ll need and write out their roles and responsibilities. Next, establish pay rates and benefits. Depending on the size of your company and the needs of your business, you may not necessarily need full-time staff to start. Part-time employees or even freelance workers are an option you can consider.
Finally, draft a job posting that covers the core responsibilities, required skills and benefits of the position. You can then advertise your open positions on career websites, local job boards, freelance platforms or social media.
15. Obtain business insurance
You’ll do tons of hard work to get your company up and running. So, you’ll want to protect your investment by obtaining the right type of insurance. Some common options include:
Workers’ compensation: Workers’ comp covers medical expenses and lost wages for staff members injured on the job. This is mandatory in most states if you have employees.
General liability insurance: This provides coverage for third-party bodily injury, property damage and/or legal expenses resulting from an accident due to your products or services (or on your business premises).
Professional liability insurance: This type of insurance covers any errors and omissions that may cause physical or financial harm to a client or customer.
Business interruption insurance: This insurance plan will replace lost revenue in the event your business can’t operate due to a natural disaster or another covered loss.
16. Spread the word
Once your business is up and running, you can start expanding your marketing reach. First, create social media channels and link them back to your website. Choose the social media platforms where your customers and clients are most likely to frequent. Then, invite people you know to follow your feeds and start building your audience.
Your social presence will allow you to promote your brand and deliver customer service in real time. With Wix, you can connect your WhatsApp, Instagram and Facebook accounts directly to your inbox so you never miss a message.
Depending on your business type, your marketing may also include online advertising, traditional advertising and public relations. Additionally, keep an eye out for regional and local events and conferences where you can connect with potential customers, clients and even investors.