Now that you’re ready and committed to starting a business, you need to put together a game plan. There are a lot of moving parts when it comes to starting a business so it’s important to be organized, detail-oriented and have all your ducks lined up. You’ll first want to take a “view from 10,000 feet” and then drill-down into the specific details.
During the process, gather information and be prepared to answer a series of questions related to your business venture. This information will be extremely helpful during the setup of the legal entity and establishing business operating parameters as you begin operations. In addition, if you need to consult with professionals (ex: business law firm, CPA firm), this information will help to streamline the conversation. You’ll learn quickly that streamlining conversations and meetings are crucial when dealing with law firms and CPA firms, especially if you don’t want to rack up enormous legal and accounting bills.
Below is a list of questions that you should seek answers to. This list is not intended to be a complete list of questions but serves as a starting point in putting together your game plan.
What type of business do you plan on starting?
Will you be the sole owner or will there be other owners?
Do you or any of the other owners have non-compete agreements (or similar) that would prevent or prohibit you and/or the other owners from joining or participating in this business venture? Are there any potential conflicts of interest?
Are you or any of the other owners currently participating in or are a part of another business venture, whether in the same industry or a different industry?
Will the business be owned by individuals, another business entity or a combination of individuals and business entities?
What will be the name of your business?
Is the business name unregistered and available to register with your state’s Department of State?
Are there any other individuals, companies or organizations using this business name or names similar that may cause confusion for clients/customers and/or pose legal issues (ex: trademark)?
Is the corresponding Internet domain name available for your business name?
Are the corresponding social media handles available for your business name?
What type of legal business entity is best for your business (ex: LLC – single-member LLC, multi-member LLC taxed as a Partnership, LLC taxed as a sub-chapter S, Corporation – C-Corp or sub-chapter S)?
What will be the designated role (ex: job function or area of responsibility) of each owner?
What does each owner bring to the table of the business venture?
How will the business be managed (by the owners, by designated managers, by owners and designated managers)?
How much starting capital do you and your partners have to invest in the business?
How much capital will you and your partners need to invest in the business to cover startup costs and at least the first three to six months of business operating expenses?
If you and your partners don’t have the necessary capital, how will you and your partners secure the necessary capital (ex: bank loans)?
Do you and your partners have a solid credit history and a good/excellent credit rating? Do you and your partners have collateral, if necessary?
When do you expect to officially begin business operations?
Will the business operate in a single state or multiple states?
Where will the principal office for the business be located? Will there be a single office location or multiple office locations?
Will you require commercial space for your business?
Will you be hiring employees?
Will you be using independent contractors or external personnel?
What resources will you require to operate your business (ex: supplies, equipment, software)?
Do you currently have or are you working with existing clients?
Who are your target clients or customers?
What’s your business plan or strategy for acquiring new clients or customers?
If your business requires inventory, how do you plan on acquiring, storing and securing inventory?
Will your business be required to collect sales tax?
Does your business operate within an industry that has industry-specific or governmental requirements (ex: certifications, memberships, licenses, permits, insurance)?