Checklist for starting your own business
Use these notes when you are planning a business start up. They cover the principal matters to be considered when setting up a new business. They are intended to prompt your consideration and provide a starting point for your plan.
There are many other Net Lawman advice and information pages relevant to business start-up. Here is the list.
What is your business structure?
Is it to be sole trade, partnership, or limited company or limited liability company?
Draft a business plan: decide:
- What is your business?
- Who is your target audience – who is most likely to buy the product or service?
- Outline the strengths weaknesses of the business. The strengths are easy. Spend more time on the weaknesses and try to eliminate some right now;
- Why will it work? What is the opportunity in the market place? Why is the opportunity present now?
- Consider stumbling blocks you might come across. Prepare for the worst and plan a ‘plan B’. What might cause the difficulties? How will you deal with them? What will be their effect on the business?
- Make a three year budget and cash low forecast (five might be even better). (Often very difficult at the outset, but banks are more likely to loan you money if they see a well-thought out, medium term plan.);
- Capital requirement and funding proposal. How much? Where from? How long? What cost? How will you make the repayments?
- Who will be the shareholders? Are the minority shareholders happy with proposals? Have you a proper shareholders agreement to record exactly what you have agreed?
- Choose the directors? Are directors aware of their responsibilities as directors? If they are not employees, what will they be paid? What will you are paid?
- Consider the requirements of other staff? At first? Later?
- What space will be needed? ;What will it cost?
Prepare a marketing plan:
- Three year plan required, (as a minimum) to support the business plan;
- Analyse sales by customers / sources of sales and plan for variables. What is you only sell half your expected product in the second month? How will you then make the re-payments on the loan?
- Analyse sales by product or service;
- Remember you might need extra staff;
- Remember GST. It is easiest to work net of GST in all figures, so remember to reduce consumer sale prices to reflect this;
- Look realistically at marketing costs. Do your homework. Be precise.
Assess adequacy of funds and make sure you have finance in place before you commit.
Decide who, if anyone, is to be included
Individuals can be included as a partner, director, company secretary or employee. Remember that an employee has a large package of “rights” immediately, making them potentially time-consuming for new employers. If more than one person is involved, decide precisely on areas of responsibility, method of communication, and matters for mutual agreement.
Decide what will happen if you fall out with any other person involved
Work through each other person in turn, in your mind. What issues might cause a problem? ;If you decide to split the business, who would get what? ;Will the likely outcome be fair? What will happen if you cannot agree?
How much space will be required? How certain is the requirement? What about expansion? What about disaster? Is space available on a short lease, so that you can move to larger or smaller if necessary?
- Fix firm start date around which all arrangements will be made. Then add two weeks;
- Assess telephony requirements and obtain quotations from suppliers;
- Assess requirements for other services and obtain quotations from suppliers;
- Set up a domain name, website host, email contacts for your employees (if necessary);
- Precisely, list the products and raw materials you will need and obtain quotations from suppliers;
- Check delivery arrangements, payment arrangements, availability, and continuity;
- Register for GST. Register for an ABN number;
- Write to banks for quotations. Test them against each other. If you like bank a, but they are offering a high interest rate, try bank b and then haggle for the best of both;
- Appoint accountants and solicitors as required (not necessarily now).
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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