The 25-Item Small Business Checklist
Gumption gets you far but a smartly crafted small business checklist AND gumption? Well, that gets you even farther. From research to business licenses, to bank account and bookkeeping, this list will get you started.
What is a Small Business?
The true definition varies by country and industry, meaning that a small business for one industry could be 250 employees, while another could be 1,500 employees. The Small Business Association has created a table of standards that breaks employee count and revenue by industry down number by number. In the end, a smaller business simply comes down to size.
Small Business vs. Startup
Another common question: what’s the difference between a small business and a startup? A startup business is essentially a small business. However, they are usually younger and could be setting themselves up to experience rapid growth. A startup can quickly become a mid-sized business with enough employees and revenue growth, while a small business might not be aiming to grow as rapidly. Approaching the creation of a startup will encounter many of the same processes and challenges as starting a small business.
Small Business Taxes to Expect
Everyone’s favorite topic: taxes. When you’re running a small business, you’re going to have to face them often. Let’s break them down by the big picture:
- Business taxes: Income, self-employment, employment and/or excise tax
- Payroll taxes: Employee, compensation, and self-employment tax
- Employment taxes: Federal Income Tax and Social Security and Medicare Taxes, Federal Unemployment (FUTA) Tax, and Self-Employment (SE) Tax
- State taxes: Initial formation fees, income taxes, and sales and use tax
- Local taxes: Personal property like machinery, equipment, or furniture
- Sales taxes: Sales taxes will vary by state – contact your state authorities
However, there are also tax credits and small business tax deductions. For instance, there are deductions for healthcare, business use of personal vehicles, home office use, training costs, and equipment and software purchases. Perhaps surprisingly, many small businesses don’t take advantage of or even know about these deductions. Be a savvy small business owner and seek these where you can.
Different Types of Small Businesses
Small businesses are usually categorized by their ownership structure. They could be:
- Sole proprietorships: Owned by a single individual
- General partnerships: Owned by two or more individuals
- Limited partnerships (LP): Owned by two partners, one with a general partner and one limited partner
- Limited liability companies (LLC): A business entity that protects owners from personal responsibility
- Non-profits: A business that serves the public good and is tax-exempt by the IRS
- Corporations: A legal entity that is separate from its owners
- Cooperatives: Businesses where owners who also work for the company
These different kinds of small businesses each have their own rules and regulations regarding business operations, liabilities, finances, and legal status. You should have no doubts about what your small business falls under, or else you could face financial or legal headaches.
Small Business Startup Template
By now, you can tell what a small business is and why it’s essential to know where your organization stands. But you want to get to the real reason you’re here: is there an easy template you can follow to turn your small business dream into a reality? Luckily, we’ve put together a checklist to help get the ball rolling and answer your burning questions.
Small Business Leadership Checklist
First things first: tackle the big picture items. This means brainstorming, researching, and planning. It may be tempting to go straight to thinking about money – but that’s a surefire way to set yourself up for failure. So, instead:
Your first step to success is having a strong idea of what you want to do and how you want to do it. Hopefully, it’s something you’re passionate about because starting your own business can burn you out and burn you out fast. This is a big part of the reason why only 1 in 4 businesses will make it to the 15-year mark. 
Create a Mission Statement
This is less a financial model and a detailed strategy session as it is a philosophical manifesto. Remind yourself (and your team) of your values, goals, and the “why” of your business.
Create a Business Plan/Roadmap
Flexibility in a roadmap is key. You’d be hard-pressed to find a business owner who predicted exactly how everything would unfold. Regardless, you need to have a one-year, two-year, and even five-year plan in mind. This will help steer your day-to-day decisions, what projects you prioritize, and give your investors (if any) confidence in what you want to accomplish. For more information on building a financial roadmap, check out our guide here.
Research Your Product
Before you borrow money from your friends and family, make sure that what you’re investing in is worth investing in. How much will it cost? What price point do you need to hit to turn a profit? Can you afford enough quantity to get your margins low enough? How much time and money will need to be invested in updates, maintenance, and support?
Assess Your Needs
Starting a business (even if it’s a seemingly low-cost adventure) can often be more expensive than expected. Create your own small business checklist of potential needs such as manufacturing, web/app development, prototyping, digital assets (photography, graphic design, logos etc.), website hosting, employees, freelancers, and a CRM (customer relationship management) system.
Apart from monetary needs, you also should consider time and expertise. Are you working a 9 to 5 while you grow a side hustle? Will you have the time to do so? Will you be spending the majority of your time learning rather than doing it?
Check Out the Competition
Before you start a business, you need to know who your competitors are, how they’re succeeding (and failing), and how you will add value to the market. Do they have investors? Are there any partnerships that have brought them success? Are they doing PPC (pay-per-click ads)? If so, can you tell how much they’re spending? What does their email funnel look like?
It’s not a bad idea to act as a customer or even be a customer just to see what the onboarding and purchasing process is like. This will give you a good idea of industry standards and might also give you some ideas of how you can improve them.
Decide on Your Name and Business Entity Type
Unless you choose a made-up name, this can be a long and frustrating process. Most likely, the first name you think of will be taken. However, with some creativity and persistence, you’ll be able to settle on something you like.
If you’re really stuck, there are even tools that will generate a bunch of names for you based on a keyword.
Before you invest time and money into a brand name, make sure it is available because a surprise rebranding effort can be expensive and will interrupt the flow of your business.
Small Business Marketing Checklist
If you want to succeed as a small business in today’s world, you’re going to have to ace your marketing. While word-of-mouth is still great, nothing compares to your online presence. Here’s how to get started:
Establish a Value Add
Perhaps the most important and crucial question to address on the small business checklist is “What do you bring to the table that others don’t (or can’t)?” Will it be your stellar customer service, will it be a better-designed user interface, a proprietary piece of tech? Once you establish this value ad or differentiator, you will want to hit on this over and over with your marketing efforts. This brings us to the next step...
Create a Marketing Plan
“Your brand is the single most important investment you can make in your business.” - Steve Forbes
Creating a marketing plan is essential, because regardless of how good your product is--if no one knows about it, it’s not going to get any traction. The plan should cover strategy on how you will reach your target audience from both organic and paid channels. In this, there should be careful consideration as to how investments will be made to get the most out of your marketing efforts and ensure you aren’t shouting into the void.
Decide on a Brand
Besides choosing your marketing channels and who/how much you want to invest in said marketing, you need to decide HOW you want to present yourself as a business. In today’s world, consumers make up their minds about you quicker than ever. Just check out some of these stats:
- The average bounce rate is between 40-55%. That means if you’re doing okay, one out of every two prospective customers who view your site immediately jump ship!
- Out of those that do decide to stay, most of them will leave in under a minute, and many of them in under 10 to 20 seconds.
What does all of this mean? It means you need to have smart design, one that makes your value ad clear from the start. Consumers need to feel confident in your product, know what it is, and that it speaks to them. Even if your focus isn’t digital, these same principles apply.
Someone must be able to experience your brand and within 15-30 seconds should know what you do and how you add value to their lives.
Get a Logo
Your logo is your name, your face to the world. Whether you pay a high-end graphic designer or use a freelance directory site, make sure it defines you and communicates what you stand for.
Sites like Upwork have many designers that can help out with this, or if you need ongoing graphic design help, services like Design Pickle can handle ongoing graphic needs.
Create a Website
Even if you’re not digitally based, you need a website. A website is the modern-day equivalent of a business card, and it’s going to give you a place to control the messaging. Do customers want to know more about you? Other businesses want to partner with you? A news outlet wants to give you coverage? You need a website.
If you’re not well versed in web development, consider using a website platform that doesn’t require you to know custom code. Sites like Carrd.co offer simple landing pages that can be created within minutes to easily explain your business. There are other sites like Wix and Squarespace that offer drag-and-drop design functionality that anyone can use.
Spending a lot of time and money on the initial website may seem like the way to go, but focusing on growing the core capabilities of the business is more important in the beginning. Try not to over-invest in the website because there is a strong possibility that the website will be iterated on many more times. If you have to pay a designer for each iteration, a lot of the budget will get used unnecessarily compared to a DIY platform.
Choose Your Social Channels (Wisely!)
Some brands make the mistake of going as wide as possible when it comes to social media, creating a profile on every platform they can think of. The problem is, when you’re starting small, you might not be able to afford the time or money to hire a full-time content creation team. The fix? Choose 1 or 2 platforms that have the best chance of reaching your audience and dedicate yourself to creating consistent and quality content for those channels.
Once you have an idea of the platforms you want to lean on, get a process together to easily share posts on the social media sites. There are a lot of solutions when it comes to social posting, depending on how much visibility into the analytics you need. If you’re just starting out, services like Publer.io can coordinate posts on a few platforms for free until you decide to ramp up efforts.
Get a Custom Domain Email
help@gmail[dot]com is not a custom domain email. help@yourbusiness[dot]com is a custom domain. It may not seem like much, but having your business name in your email will create a sense of security, trust, and authority with the online public. Making this change isn’t the number one priority in creating a business, but if you plan on sending emails often (which is probably a good idea), then you want to have a custom domain.
Small Business Startup Tax Checklist
Here we are at our favorite topic again – taxes. Getting your finances right from the start will ensure tax headaches down the line and prevent you from getting into potential legal trouble. Here’s what you need to do:
Implement a Bookkeeping Solution
Bookkeeping lets you see where your money is going and how it’s being spent. Done right, it can also help you secure more financing--something most small businesses desperately need. It also happens to be one of business owners’ least favorite tasks. Wouldn’t it be nice if you could automate it? Well, you can. There are a number of online bookkeeping services like Decimal that offer you the ability to sync up your bank account to their software while a remote team of accountants meets your bookkeeping needs and finds ways to improve your accounting operations.
Open a Business Banking Account
A lot of people start out using their personal cards for business purchases. Not that this is necessarily “wrong,”--but it’s bad business practice. Separating your personal purchases from your business transactions will help you have cleaner books and an easier time doing your taxes. It also helps you compartmentalize and organize your expenses. You know exactly how much capital you’re sitting on at all times, never having to worry if you can use that money for business needs or if you were saving it for your mortgage.
Without splitting up the accounts, there will be a lot more time spent reconciling charges as well as trying to remember which was a legitimate expense for the business.
Small Business Legal Checklist
Legal issues go beyond just handling your taxes. It means dealing with all the other fun stuff like licenses, certificates, trademarks and patents. Let’s break it down:
Get a Business License
Each state has its own set of rules, but wherever you plan on operating, you need a business license. Without this, you’re not going to be able to sell anything. Don’t believe me? Just ask the kids who had their lemonade stand shut down in Texas for operating without one!
Obtain the (Other) Proper Licenses
Certain industries will require additional certifications and licenses, such as the food and beverage industry. Other industries, such as the firearm industry, require federal approval from the likes of organizations like the ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives). Know your industry and don’t be afraid to connect with others who have “been there done that” and can help you navigate the system.
File for Trademarks/Patents
Boring but essential if you have any inventive products or names you don’t want your competitors to copy. Depending on your product, securing one of these could be the make-it-or-break-it step in creating a successful business. If you need to know more about patents and trademarks, visit the USPTO website.
Get an EIN (Optional for Sole Proprietorship)
EIN stands for Employee Identification Number. According to e-FORMS.US, here are four things that obligate you to get an EIN:
- The Entity has hired or plans to hire employees
- The Entity needs to open a business bank account
- The Entity needs to file Tax Returns
- The Entity needs to comply with State and Federal regulations
At times, sole proprietorships may just need to use their Social Security number.
Get Business Insurance
You don’t want to invest dozens of hours and your life savings into a business only to have it burned to the ground with nothing to show for it. Some insurance policies can even help protect against 3rd party lawsuits.
Small Business HR Checklist
Plan to take employees on board? It’s human resources time. HR will go hand-in-hand with legal and financial concerns and are just as important as the creative aspect of your small business planning.
Obviously, not for everyone (especially if you’re a freelancer), but definitely something worth considering. If you do hire, you’ll need that EIN number we discussed, you’ll also need to set up some type of payroll system, and you’ll also need to get your paperwork in order such as a W-4 and I-9.
Small Business Launch Checklist
You’ve done all the administrative work. Now comes the most exciting part…launching your small business. Of course, your enthusiasm shouldn’t stop here. After the launch comes the highs, lows, and the learning.
Create a Strong Plan, Execute
Momentum is huge. Before you launch your business, you should think about how you can make it a PR-worthy “event.” Do you have a list of PR contacts? Have you prepped your family and friends? Do your social media channels already have a substantial amount of content and look like they are worth following? Or do they look empty?
If you have a complicated or tech-heavy product, you might consider adding beta users and testers ahead of a launch so that by the time that day rolls around, you’ve ironed out all of the kinks.
Leverage Personal Contacts
Unless you have a large network of contacts, you’re likely going to need to reach out to family and friends--not only as potential customers but as spreaders of the word. Even if they aren’t interested in your product, ask them to share with their personal networks. These will likely be your first customers.
Hustle, Learn, Hustle
Even after all of these steps are completed, your business hinges on your ability to work hard, adapt to the market, and work hard some more.
Ready to Get Started on Your Success?
Looking at the above checklist, you may be thinking that starting the process of turning your small business dream into a reality is long and stressful. The truth is, it doesn’t have to be. There are resources out there to help you handle the important (but not as exciting) parts of your business.
Decimal handles all the accounting concerns for your small business, including bookkeeping, payroll, bill pay and even technology setup and support. It all starts with a free consultation where we get to know your business and craft solutions based on your unique needs. It’s time to turn your focus to success – and that starts here.
1. Deane, Michael. “Top 6 Reasons New Businesses Fail.” Investopedia. October 29, 2010.
2. Zaru, Deena. “Texas cops shut down girls’ ‘illegal’ lemonade stand.” CNN. June 11, 2015.