If you want to start a business, it’s a good idea to have a checklist to guide you.
Just as pilots don’t leave the ground without their checklist, neither should you, lest you risk an early demise.
There is no guarantee that a checklist, in and of itself, will make your business successful. But your chances are greatly enhanced with a comprehensive list.
Here are 26 questions you should ask and the answers you should include on your checklist.
Your business concept
What is your business idea and does it make sense in this market? Does the business product or service exist in this market or other markets, and is it viable? If it isn’t something new, how many competitors will you have?
If you are not sure, seek help from mentors who can help you determine if your business concept makes sense.
Are you familiar with the industry? Is there a trade association for this industry? Trade association information can help make the difference for your success or failure.
Do the numbers jibe?
Have you figured out how many units or services you have to sell to break-even and make a profit? Have you projected how long it will take you to get there?
Do you know what your cost structure (direct and indirect costs) will be? Do you have the ability to go without pay for an extended period of time? Is your confidence level for success so high that you are willing to quit the paying job you have?
Do you have or can you get the resources to bring your concept to fruition?
This is a two-part question: Do you have the financial resources available, both money and credit? Do you have, or can you assemble, the talent needed? Will you have to share your equity with others?
Sales and marketing costs
Is your sales strategy based on your website? Do you have sales people who can sell? Have you explored how much you will have to pay to attract and retain competent sales people? Have you separated startup, one-time, non-recurring costs from repeating costs?
Professional fees: Have you selected an attorney, an accountant, and a banker and budgeted for startup and on-going professional fees?
Overhead costs: Do you need a physical place to conduct business? Have you estimated administrative costs you will likely encounter as your business grows? Have you budgeted for payroll, taxes, insurance, rent, utilities, etc.? Will you have to train employees?
Technology costs: Will the business require computers, point-of-sale systems, special software or other technology?
Intangibles: This may be the most important consideration. Do you have the drive to be a successful entrepreneur? Have you done anything like this before? Are you persistent, creative, goal oriented?
The startup checklist
In creating your startup checklist, do as much as possible in the following areas. Complete projections as indicated for three to five years. Most people won’t do this, so the more you do, the better your chances for success.
- Profit and loss: monthly year one; quarterly years two and three; annually years four and five.
- Balance sheet: monthly year one; quarterly years two and three; annually years four and five.
- Statement of cash flows: same frequency as above.
- Source and application of funds: same frequency.
Know your break-even point. Conduct a comprehensive competitive analysis. Develop market-share projections. Create a website. Create collateral materials. Create a working prototype as applicable. Formulate the strategies to be deployed.
Your business plan should contain all of the preceding information, plus a detailed description of the business, biographies of the management and key personnel, plus an executive summary.
Other tasks to be performed include the following (the first four require appropriate professional assistance):
Create a unique trade name and make sure it’s not already being used. Determine the business’ legal structure (LLC, corporation, partnership, etc.). Decide your legal name, address, phone number and email address. Obtain the necessary licenses (city, county, state, federal). Hire necessary personnel. Be flexible and make adjustments.
The Business Model Canvas
This alternative to the formal business plan might be better as a starting point to determine the viability of your business.
The BMC lists nine variables on one page: key partners, key activities, key resources, value proposition, customer relationships, channels, customer segments, cost structure and revenue streams.
The canvas can generally be completed in one to two hours. It’s a great tool for startups, especially when the concept isn’t crystal clear and incorrect assumptions need to be changed.
The BMC is meant to be adjusted (iterations made) before (and even during) launch, while adapting to altered market conditions and customer demand.
Remember, it is better to fail, fail often and fail inexpensively at the beginning, when there is still time to make less costly corrections and revisions to your plan.
Dennis Zink is an Exit Strategist, business analyst and consultant, a Certified Value Builder and SCORE mentor, and past chapter chair of SCORE Manasota. Dennis created and hosts “Been There, Done That! with Dennis Zink,” a nationally syndicated business podcast series and “SCORE Business TV” available at Time4Exit.com. Dennis led a SCORE team to create the Exit Strategy Canvas and Exit Strategy Roadmap program that provides a real world methodology for business equity realization. Email him at [email protected].
https://www.heraldtribune.com/story/business/2021/11/22/dennis-zink-want-start-business-ask-yourself-these-questions/8638117002/
