The Essential Startup Checklist to Set You Up for Success

20 percent of new businesses don’t live long enough to celebrate their first birthday. 30 percent don’t make it past two years and 50 percent don’t keep their doors open beyond five years. Stretch this timeframe to 10 years and the percentage of businesses that fail shoots up to 70.

Whichever way you slice this information, one thing is clear: the odds are stacked against startups.

Fear not, though!

Fortunate favors the prepared, which is why we’re sharing startup checklist you need to set up yourself for success.

An Idea That Solves a Unique Problem

The first step to starting a successful business is to offer a product or service that solves a real or unique market problem.

Thank of any successful startup you know. Doesn’t it offer a unique product or service?

Let’s take Uber, for instance.

The startup offers an online taxi-hailing solution, so people no longer have to go to a taxi station or flag one by the roadside. These days, the taxi comes to you. Yes, the startup is currently facing a boatload of problems, but with a reported $120 billion valuation, it’s pretty much the definition of success.

Before launching your startup, do a viability test to determine whether your idea and the resulting product/service have a strong market demand.

A Business Plan

A common mistake entrepreneurs make is setting up startups without a business plan. Don’t be like them!

Starting a business without a business plan is a sure way to fail. It’s more like building a multi-story house with a blueprint. It’ll likely crumble to the ground at some point.

As such, spend time on writing a business plan for your startup. Ensure it includes the following:

  • Executive summary
  • Company description – includes founder information ad business model
  • Organizational structure
  • Product and service offerings
  • Marketing and sales strategy
  • Capital needs and profit projections

A good business plan not only serves as a pathway to success but also make it easier to get funding. Potential investors will want to study your plan before making any financial commitments.

Adequate Capital

Now that we’re on the money vibe, another essential item on any startup checklist is adequate capital.

Your business plan will flesh out the amount of money you need to launch the startup and keep it on its feet until it’s generating enough revenues to sustain itself.

However, chances are high you lack enough money to start a business. What should you do?

The good news is there are a couple of ways to finance a new business. You can crowdfund on platforms such as Kickstarter, borrow from friends and family, take out a personal or business loan from an institutional lender, or reach out to equity investors.

Regardless of the source your turn to, ensure you have access to enough capital before opening your startup. Don’t work under the assumption your business will start generating profits soon after opening. It’s possible to burn through cash for several months or even years without turning a profit, so a sizeable stash of cash in the bank will keep you going.

Co-Founder Agreement  

If you have a co-founder, you might want to sit down for this:

Studies show startups with two or more founders have greater odds of success, raise 30 percent more capital, and grow their customer base 3 times as fast. Indeed, Google, Facebook, Apple, Twitter, and several other successful companies were founded by more than one person.

However, co-founding can be a recipe for disaster, especially when disagreements crop up. To prevent future problems, it’s important to thrash out co-founder agreement before you establish your company. This should clearly identify each founder’s roles, responsibilities, and liabilities.

With an agreement in place, it’s easy to iron out issues and even fight off legal challenges in a court of law.

Permits and Licenses

In September 2018, Lime, a $1 billion scooter startup was denied a permit to operate in San Francisco. This is just one of the many startups that go out of business because they’re unable to secure the appropriate permits and licenses.

The lesson here is you need to ensure your business is properly licensed and has the relevant permits before launch.

Also, it pays to do a study and try to forecast how regulatory changes in the future will affect your business. If you’re in an industry that’s prone to regulatory shifts, it’s best to proceed with caution. In some cases, it might be better to abandon your idea entirely than pump money into a startup that can be shut by a change in regulations.

The Right Business Insurance

Entrepreneurship is all about taking risks.

If your startup fails, you’ll lose money. If your product causes harm to consumers, they’ll slap you with a class action lawsuit that can render you bankrupt. If an employee sustains an injury on the job, you’ll have to compensate them for their pain and any loss of income. The risks are endless.

Luckily, you have the power to transfer the risk to another person. All you have to do is purchase the right business insurance. Be sure to learn more about the various insurance products for businesses and identify the ones your startup needs.

Don’t Launch Without This Startup Checklist!

Although the failure rates for new businesses are on the decline, a lot rides on your preparation before launch.

With this startup checklist, you now know the bases you need to cover before your startup opens its doors to customers. And, this list is by no means exhaustive. Depending on the nature of your business, there are other additional details you might need to take care of before opening.

Good luck and keep tabs on our blog for more business lessons and tips.