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Checklist for starting a business

September 1, 2016

The following is a guide of the issues that need to be considered by someone starting a business. No opinions are offered or should be inferred. You should seek professional guidance and advice where necessary on some of the issues.

1. Business name – This is a person’s name or names, or a fictitious name such as “Smarty Pants Business Associates.” Assumed names need to be registered with the local County Clerk

2. Type of entity (choose one of the following). See questions that follow before making a decision. Use an attorney where applicable:

a. Sole proprietorship
b. Single member LLC
c. General partnership
d. Limited partnership
e. Limited Liability Company
f. S Corporation
g. C Corporation

3. Determine state of organization if choices are available

4. If property or assets will be transferred from another entity, tax advice should be sought

5. If premises will be rented or owned, decide on what state if choices can be made. If in a different state than the state of organization, then business registration might be needed in the state where premises are

6. If business will have inventory, where will it be kept and will it be in rented or public warehouses (this might determine the state of organization). If different than the state of organization the business might be subject to taxation and sales tax requirements in those states

7. If business is part of a controlled group or related entities, coordination needs to be done with those other entities

8. If business will own real estate, consider a pass through entity. If real estate will be owned by non U.S. residents or citizens, then an expert in U.S. taxation of foreign owned real estate should be consulted for the choice of entity

9. If there will be foreign ownership of the business then you should consider an entity that is NOT a pass through entity and you would need to consult with an expert in this. You would also need to become familiar with withholding requirements for distributions to foreigners. You should also determine whether there is a tax treaty with country where owners are situated. Also the identities of the foreign owner and addresses will be necessary for any advisor to review

10. Obtain a Taxpayer Identification Number (TIN) for the business. Even if a one person business with no employees or independent contractors this might be advisable. File IRS Form SS-4 which can be accessed at

11. If a professional practice, licensing with professional board and state or locality as a business would likely be required. This could also applies to one person practices or businesses

12. Join professional or business associations if applicable

13. Determine how business will be financed

14. Project cash flow and cash flow management methods

15. Make arrangements to accept credit card payment from your customers

16. Decide if you will operate solo or with partners

17. Buy-sell agreement should be executed if there will be more than one partner or owner. It is strongly recommended that an attorney be used for this

18. Establish owner’s payroll or cash drawing policy, and profit division policy

19. If more than one owner establish benefits, time off and vacation policy

20. Determine capitalization of business and owner loan policies for initial and subsequent investments. If loans, make sure there are notes with interest and due dates stated

21. Tax elections and policies to be established

a. Basis of accounting – cash, accrual or other
b. Inventory method
c. Fiscal year if applicable (usually only available to C corporations)
d. Hiring children of owners, duties and compensation
e. Start-up costs
f. Expense reimbursement policy
g. Medical expense and insurance policy

22. Prepare business plan (and strategic plan). Even if this is a one person part time endeavor it is recommended that a thorough business plan be prepared. This will help you organize your thoughts and ideas and will identify strategic opportunities

a. Identify service niches or specialties, or position in marketplace
b. Identify how sales will be made and to whom
c. Identify how inventory will be maintained, how sales will be shipped, or services delivered and pricing policy and methods
d. Identify how products will be acquired, manufactured or assembled and the type of warehousing facility and location and billing method
e. Vision
f. Brand
g. Business philosophy
h. If Internet based business, then distinguish your contemplated business from existing websites of similar business

23. Decide on technology hardware and technical and specialized software

24. Obtain accounting software

a. Establish billing and invoicing methods and payment terms
b. Establish policies for paying vendors
c. Determine if there will be payroll and whether it will be done in house or with an outside service bureau
d. Administrative software such as mailing list and customer relationship system, calendar and scheduling software

25. Cloud, paperless strategies and document management systems

26. Mobile marketing strategies

27. Social media strategies

28. Get a Website

29. Determine if you will need secure portal availability

30. Email addresses

31. Decide on personnel levels and admin support and permanent or part time staff, consultants or outsourcing partners

32. If using independent contractors, fill out and comply with IRS Questionnaire Form SS-8

33. Employment agreements if necessary for your type of business

a. For all employees
b. For executive and managerial employees
c. Confidentiality agreements
d. Employee handbook
e. Basic policies such as overtime pay policies, holiday and vacation time, and when and to whom applicable

34. Staff scheduling, dispatching or work assignment and oversight or review methods

35. If there will be more than one owner, decide on what functions and work each will do and be responsible for

36. Determine necessity of getting proforma contracts to use with customers

37. If applicable, get a Logo designed

38. If there will be patents or other intellectual property determine who will own them – the business or individuals

39. If you will be importing products into the United States, you will need to find out import regulations and duties, get certificates of origin from manufacturers, and find out logistics and transport methods, timing and cost, and possibly engage a broker to assist in clearing Customs

40. Open a bank account

41. Determine if you want a post office box, or mail to be delivered to your office

42. You will need office equipment and furniture, telephones, a postage meter, courier accounts and stationery

43. Communications methods

44. Insurance – umbrella, workers’ compensation, general, product and malpractice liability, general office insurance

45. Health insurance

46. Life insurance on owners

47. Disability income insurance on owners

48. Disability buy-out insurance if more than one owner

49. 401k, pension or retirement plan contribution policy

50. Set a policy for owners’ meeting frequency, location and length

51. Owners’ retreat

52. Document all important decisions with memos or minutes of meetings

53. Publicity, marketing, advertising and sales promotional activities

54. Social media strategies, and establishing accounts

55. Networking methods

56. Determine who referral sources are and set up a plan to reach out to them

57. Mailing list – establishing and maintenance

58. Announcements of new firm or business

59. How will you create excitement?

60. Write up a practice or business continuation agreement if a single owner

61. Exit strategy (already? “Didn’t I just get started?”)

One Comment leave one →
  1. 6hawthorne permalink
    September 1, 2016 11:25 am

    Hi Ed Good article you should put all your partners note in a book i think it will be a best seller Bob Nagler

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