Start-up Check List

Please note that this is a basic check list to help you get started with planning and opening your business. Some businesses will require more work and effort before starting than others, the below outline should be taken as a starting point for things you need to consider before opening the door.

Step 1: Are you ready to open a business?

  • Take CED’s Entrepreneurial Test (below).
  • Take the Good Work Entrepreneur Self-Assessment (below).
  • Review the results of both assessments, do you agree? Do you have weaknesses to consider while opening your business? Do you have any ideas on how to overcome those weaknesses?
  • Do an emotional assessment of why you want to go into business for yourself. Take a sheet of paper and write down every reason as to why you want to start this business. How many are emotional versus factual reasons (emotional = I want to be my own boss, factual = I want to open this business because I have created a new software that helps daycare facilities communicate in real time with parents)? Can you separate the emotions when/if necessary in starting up your business?
  • Examine your personal finances. Do you have enough savings to support yourself for at least three to six months or more? Have you reviewed your credit rating lately? If you have any bad marks on your credit history, have you taken any steps to clear those up?

Step 2: Business Feasibility Evaluation

  • Do you have enough money to open this business without incurring any further debts?
  • If you don’t have the investment funds, are you able to invest at least 20% of the start-up costs yourself?
  • If you do not have 20%, do you have friends or family members that you know who can invest in this business?
  • Are you willing to risk your own money/assets on this business?
  • Can the business make enough money through sales to support its expenses as well as generate enough profit for you to make a living?
  • Will this business interest you enough to spend 60+ hours a week working on it?
  • Do you have good people skills?
  • Are you confident about your management/leadership abilities?
  • Have you done any research to see if you will have enough demand/customers?
  • Is your product or service new to consumers or are you entering a familiar market?
  • If your product or service is new, do you need any intellectual property protection?
  • What is the worst thing that would happen to you if you went into business? Are you prepared if that happened?

Step 3: Business Planning

  • After reviewing your strengths and weaknesses, start to seek out classes or seminars to help you strengthen your weaknesses.
  • Before taking the time to put a business plan together, have you conducted any market research? If not, begin by seeing if the market can support your business. Find answers for the following: who are your target audiences, what are their buying habits, how large are your target audiences, what are their income level averages, what are their education level averages, where do they live, what other products/services do they buy, how much do they spend on similar products, who are your competitors and how much of the market do they own/reach? Additionally, you will want to get as much information about your competitors as you can(be a secret shopper, get any of their literature, ask them questions if you can).
  • Before pricing your product, consider what image you want to portray to your customers. Your image needs to match your pricing. Do you want to be known for discount pricing or are you targeting high end sales. Your products and prices need to match when you are trying to communicate your brand/identity. Will your pricing structure support your business well enough?
  • Create a business plan. The business plan turns your ideas into a written viable plan of action. Your business plan needs to convince you that your business will work on paper first, then it will serve as a road map, management tool and model for your business success.
  • Decide on your business structure (sole proprietorship, partnership, or incorporation – LLC, LLP, etc.).
  • Obtain your business privilege license by registering your business with your local city government. Note: some cities do not require you to take this step. Contact your local city office for further information.
  • Register your business names if you are opening a sole proprietorship or general partnership with your local county Register of Deeds office. If you are incorporating your business, you will need to file the appropriate paper work with the Arkansas Secretary of State’s office.
  • Make a list of other professionals that you will need during the life of your business, now is the time to start shopping for them (banker, accountant, lawyer, insurance agent, graphic/web designer and/or marketing/advertising agency, suppliers/vendors, etc.)
  • Do you need additional licenses or permits to open and run your business? To find out, go to your local Small Business Development Center.
  • Obtain the necessary tax information you are going to need for your business. You may want to consult an accountant or an attorney as to what forms you will need, what information you will need to collect, as well as how often and when your taxes will be due.
  • Register for your Federal Employer Identification Number at:

www.irs.gov/businesses/small/article/0,,id=102767,00.html

CAUTION!

  1. During this phase of you business, you will be eager to get as much work done in as short amount of time as possible. Despite the rush, DO NOT enter into any contracts before you know you have the capital to get your business started.
  2. DO NOT enter into any verbal agreements/partnerships.
  3. DO NOT allow your emotions make any business decisions at this time. Separate the facts from your emotions before making important decisions or seek council before making important decisions.
  4. DO NOT assume that your plan will work out the way you have planned it. Start-up businesses usually take longer and more capital than you think to get started.

Step 4: Opening the Doors

  • Make a list of what you’ll need to open the doors (where will the business be located, phone/internet service, utilities, signage, business stationary, equipment, furniture, etc.), then create a timeline for obtaining each item.
  • Do you need a loan? Talk with the IEC about what banks would fit your needs and get help in preparing to talk with the lender.
  • Begin to use your marketing plan from your business plan to start attracting customers.
  • The adventure is just beginning when you open your doors, continue to get help and guidance for your business after you have opened the doors.
  • Starting and running your own business is a lot of hard work, so it is important to remember to have fun and enjoy what you have created.

CED’s Entrepreneurial Test

There is no formula for success. However, the following entrepreneurial test may help you in your personal evaluation process. You just need to remember that this is simply a tool. It is fun to take and fun to interpret, but you should keep it in perspective. For each question, check the answer that best describes you. You must answer all the questions for the test to be accurate.

1 Yes Maybe No
I’m persistent
When I’m interested in a project, I need less sleep.
When there’s something I want, I keep my goal clearly in mind.
I examine mistakes and I learn from them.
I keep my New Year’s resolutions.
I have a strong personal need to succeed.
I have new and different ideas.
I am adaptable.
I am curious.
I am intuitive.
If something can’t be done, I find a way.
I see problems as challenges.
I take chances.
I’ll gamble on a good idea even if it isn’t a sure thing.
To learn something new, I explore unfamiliar subjects.
I can recover from emotional setbacks.
I feel sure of myself.
I’m a positive person.
I experiment with new ways to do things.
I’m willing to undergo sacrifices for long-term rewards.
I usually do things my own way.
I tend to rebel against authority.
I often enjoy being alone.
I like to be in control.
I have a reputation for being stubborn.

SCORING YOUR TEST: Award yourself three points for every Yes answer, two points for every Maybe answer and zero points for every No answer. Add up your points for your total score. If you scored between 60 and 75, you can start that business plan. You have the earmarks of an entrepreneur. If you scored between 48 and 59, you have potential but need to push yourself. You may want to improve your skill in your weaker areas. This can be accomplished by either improving yourself in these areas or by hiring someone with these skills. If you scored between 37 and 47, you may not want to start a business alone. Look for a business partner who can complement you in your weaker areas. If you scored below 37, self-employment may not be for you. You will probably be happier and more successful working for someone else. However, only you can make that decision.

Good Work’s Entrepreneur Self-Assessment DO I HAVE WHAT IT TAKES TO RUN MY OWN BUSINESS?

Do you Strongly Agree, Somewhat Agree, or Do Not Agree with the following statements? Put a check in the column that best describes your answer. At the end, total up each column for your score.

1 Strongly Agree Somewhat Agree Do Not Agree
1. I am a risk taker.
2. I am a self-starter.
3. I am self-confident.
4. I have a marketable skill or product.
5. I don’t mind working long hours and weekends.
6. I am good at managing my time and staying focused.
7. I am a very good organizer.
8. I am comfortable with bookkeeping.
9. I am a good salesperson.
10. I can deal calmly with criticism and rejection.
11. I like people and dealing with the public.
12. I am not afraid to make decisions.
13. I have the discipline to see a job through to its end.
14. I can live without a regular paycheck for 1-2 years.
15. I have the support of my family.
16. I am good at networking, meeting and talking with people who might help me with my business.
17. I am good at managing my personal finances.

Congratulations! The more items you check off in the Strongly Agree and Somewhat Agree columns, the better prepared you are to start your own business at this time. The items you checked off in the Do Not Agree column are challenges. Review these items and decide how difficult it may be to overcome each one. Some of these things, such as lack of bookkeeping skills, can be overcome easily by taking a class. Don’t be discouraged; just be realistic about your skills and abilities in running a business.