Small Business Startup
Completing the Startup Requirements

(Date posted: May 18, 2009)

During this step in the small business startup, you will satisfy all remaining startup requirements. This means to either complete them or show them on an updated list of startup requirements.

Before starting this step, you should have:

  • Listed the startup requirements
  • Gathered the needed resources
  • Set up a home office
  • Set up an accounting system

Previous steps show you how to do this.

The desired result of this step is to complete as many startup requirements as possible and show all remaining items on an updated list.

Here are the topics:

Guidelines
Procedures
Example
Go or no-go decision

You will use this updated list to show what actions or objectives remain to be completed before starting business operations.


IMPORTANT

Before using this information to start a business be sure to read the following notice: Disclaimer

Guidelines

It is very important to satisfy all startup requirements before or soon after beginning business operations. Once you start operating your business there's no extra time to take care of details that should have been completed before hand.

It is especially important to complete all governmental and insurance requirements before starting business operations.

By "business operations" I mean those activities that announce to the world that you are a business firm. These are such things as:

  • Buying or producing the products to be sold
  • Soliciting customers for these products
  • Selling and delivering the products to the customers
  • Hiring employees
  • Holding yourself out as being in business

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Procedures

The following subtopics show you how to finalize your list of startup requirements.

Get your original list of startup requirements

Jump to the Procedures topic in the Listing the Startup Requirements step. Use this list as your starting point. Then delete all items that you have already completed, regardless of when you finished them.

Add items to your original list, if needed

As you review what you have learned since preparing your original list, add any new items that come to mind. These are things that should be completed before you start business operations.

Complete any items remaining on updated list

NOTE: If you are developing a low-cost, low-risk type of business, review the Bootstrap Methods page in another section to save on cash.

Now you can see which items remain uncompleted. As you complete them, delete them from the updated list.

After you have finished completing as many items as possible from your updated list, review the following list to see if any of these items apply to you.

Typical items you may need to complete

Following are some typical actions or objectives that may need to be accomplished or added to your updated list of startup requirements:

  • Be able to produce the product.
  • Be able to minimize fixed costs and expenses to maintain a low break-even point.
  • Get any outside funds needed to finance the business startup.
  • Set up a home office, complete with all the furniture, storage units, office equipment, computer equipment, and computer programs that you can afford at this point.
  • Be able to run the business.
  • Form the business entity you are going to use to conduct business operations.
  • Obtain all identification numbers, licenses, permits, and registrations that apply to your business.
  • Obtain liability and other insurance appropriate for your business venture.
  • Open the business bank account.
  • Get a business telephone.
  • Purchase stationery and other office supplies.
  • Purchase any equipment and tools needed to produce the products to be sold to customers.
  • Purchase production supplies.

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Example

This example is based on my own small business startup.

Get my original list of startup requirements

Following is my updated list. I started with the original list and then deleted all items that I have accomplished. (I also inserted remarks about when the remaining items might be accomplished):

  • State deposits, fees, identification numbers, licenses, permits, and/or registration forms: When I offer my e-book for sale, I will have to register my business with the Department of Revenue.
  • Federal tax returns: When I start receiving money from the sale of my e-book, I will have to file Schedules C and SE with my annual Form 1040 for that year. I also will be liable for filing quarterly payment vouchers (Form 1040-ES) for the following quarters.
  • State tax returns: When I start receiving money from the sale of my e-book, I will have to file periodic Combined Excise Tax Returns. The filing frequency will depend on my estimated annual revenue.
  • State taxes to collect and pay over: When I start receiving money from the sale of my e-book, I must collect sales tax on sales to certain customers. I must report these collections on my periodic Combined Excise Tax Returns.
  • Insurance: I need to obtain a home business endorsement to my existing homeowner's insurance policy.
  • Obtaining computer equipment and programs: At some point I will purchase the QuickBooks Pro program for cash at the local Office Depot store.
  • Obtaining production and delivery information and training: I plan to deliver copies of my e-book electronically from my website. I will receive the required information from the Site Build It! web-hosting company. I pay them a monthly fee.
  • Obtaining accounting system information and training: The only additional information and training needed concerns the QuickBooks Pro computer program. I will receive the information and learn the program after I purchase it.
  • Business bank account: After I have produced the first e-book, I will contact my existing bank and apply for a business checking account.
  • Business telephone: After I have produced the first e-book, I will contact my existing telephone provider and request a second line and telephone number.

Add items to my original list, if needed

I did not think of any other items to add to my updated list.

Complete any items remaining on updated list

I will complete the item for insurance before I start to publicize my free website.

I will complete all the other items before I begin business operations. (My business operations begin when I offer my e-book for sale or get paid for displaying advertising blurbs of others.)

Typical items I may need to complete

I have already completed these items or verified their presence on my updated list.

After thoughts

I'm still several months away from starting business operations. That's why I still have several unfinished items on my updated list. (Note: If you are real close to starting business operations, you probably should have accomplished everything on your updated list.)

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Go or no-go decision

This decision concerns the updated list of startup requirements you prepared in this step.

Go on to the Starting Business Operations step in your small business startup if you can answer "yes" to the following questions:

  • Have you completed all of the applicable items from the typical items you may need to complete list?
  • If you have any uncompleted items on your updated list, will you be able to accomplish them before or soon after starting business operations?

If you have answered "no" to any of the above questions, go to this topic on another page to see what to do next.

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