Stating any business can be a stressful time but with this checklist you can ensure you have all the appropriate measures in place before embarking on your start-up journey.
1. Do you have the capital?
Every business will be in need of some start-up capital, even if you are thinking of working at home there will always be costs so you need to know how you’ll meet them. Furthermore, most start-ups won’t make much money in the first few years so be sure to have a plan to keep you going.
2. How will you budget your business?
Everybody knows that the most important part of a company’s finances is the cash flow. Whilst you need to have a constant in flow of cash this is usually out of your control, so you need to look at the budget. By having a clear and set out budget you will know how much you can spend on a monthly basis, this will stop big surprises at the end of the month when the bills are to be paid. Keep in mind you may need a flexible budget especially when you are unsure of your cash inflows.
3. Do you have a way of dividing rewards and costs?
This is perhaps one of the most important questions you’ll face. Typically a start-up will go for a simple 50:50 division of rewards and costs, but this tends to be a poorly considered option. In every start-up there will be different levels of responsibility shared and since start-ups are very volatile these responsibilities will change dramatically over time.
4. Do people demand your product?
Most start-ups are based around what the founder thinks of as a great idea, but you need to make sure there is a market demand. Even niche products needs someone to purchase them so ensure that audience is out there, get a number of opinions from a range of people, not just friends and family but independent agents too.
5. What makes you better than your competitors?
For any new business the biggest issues is getting over market conditions. It’s quite likely that the product you are trying to sell is already out there, so you need to find a way for you to compete. Think about why someone would buy from you instead of a competitor, and use that competitive edge to build on.
6. Have you considered all Legal ramifications?
Not every Founder will be an expert in Corporate Law so make sure you have considered every potential legal issue and employ a lawyer in the early days. It shouldn’t be very hard and will save you lots of money in the future. Just remember, more often than not legal issues are much more difficult to solve further down the line when you want to do things like sell the business or go public.
7. Can you trust the person you are in business with?
Many start-ups will be founded by families or friends, they are usually the most common choice of partner, but this doesn’t always lead to success. You need to ensure that between you, there are the skills to cover all bases and move forward in your professional life. In addition, it is always wise to keep you personal and professional relationship separate, they can often be in contrast of one and other. (See previous post entitled: Does your business have the right people?)
8. Do you have a decision make procedure?
Often when start-ups are founded by more than one person, each founder wants an equal part in the decision-making process. Usually the issues are something that can be solved by one person but due to egoism the decision-making process is slowed down and reduced to inefficient levels. This makes it vital that everyone is aware of who is in charge of what area.
9. How will you market your business?
Even the greatest idea in the world will fail if nobody knows about it. So it’s important to start thinking about bring in customers straight away. (See previous posts entitled: Branding and What You Can Do About It and Brand Promotion)
10. Who are your suppliers?
Every company you buy from for your business is a supplier, and supplier-buyer relationships are one of the essential to manage. By guaranteeing a smooth and long-term relationship with a supplier you are able to lower costs which will ultimately play a part in giving you the competitive edge over your competition.