Setting up a business is exciting, and it is also a time to be careful. There is a lot to get right — from choosing the billing software you will run the finances on to hiring the right people — and skipping the unglamorous parts is how businesses that had a good idea end up closing anyway.
1. Research your industry
Know everything there is to know about the industry you are entering — not just the work, but who the customers are, how they buy, what your competitors are doing, and what the margins actually look like.
Part of that research is the admin side: how invoices work in your industry, what your customers expect on one, and which invoicing software you will use to manage the money. Deciding it now is easier than deciding it during your first busy month.
2. Write a business plan
It maps your goals and keeps you pointed at them. Its real value is showing you when you have drifted off course while everything still feels fine.
3. Get the right insurance
What you need depends on the type of business. This is the item most often postponed and the one where postponement is least recoverable.
4. Choose the right business structure
Your structure affects both your tax position and your personal liability. Worth an hour with an accountant before you register rather than a restructure afterwards.
5. Register your business
Register with the relevant authority for your country once the structure is settled. It makes the business legitimate and keeps you compliant with the rules that apply to it, and it is what lets you open the accounts and get the credit terms the rest of this list depends on.
Registration — and much of what follows it — tends to require financial figures, so keep your records current from the first day of trading rather than assembling them under deadline.
6. Get a business licence
Depending on the type of business, operating lawfully may require one. Check before trading, not after.
7. Open a business bank account
Separate the business’s money from your own. Mixing them makes bookkeeping painful, makes your tax position ambiguous, and makes it impossible to see whether the business actually works.
It is also what makes bank statement import useful rather than a mess of personal transactions.
8. Find the right location
If your business depends on customers reaching you, convenience and amenities matter. If it does not, premises may be the biggest avoidable cost on your plan.
9. Hire the right people
Your employees are a crucial part of the business, so take the time to screen candidates properly and hire people who genuinely fit it. Early hires shape the culture more than any later ones, because they are the culture.
10. Promote your business
Nothing on this list generates a single sale. Marketing is what turns a business that exists into a business that trades — see 5 creative ways to market your small business.
And before your first invoice
Whatever else you compromise on while getting started, do not compromise on the finances. Set up how you will quote, invoice and chase before you need to — it takes an hour at the start and is painful to retrofit once you have customers waiting. See create an invoice.