KL Yong operated a marketing communications agency for 18 years before retiring in 2017. He now devotes his time to online writing.
You have completed the business plan for your intended startup.
You have also assembled the best team in the world. Behind you stands a supportive family and many encouraging friends too. As well as a long list of potential clients.
Is your entrepreneurial success assured? Would you be a newly minted millionaire within a year?
No, you wouldn’t.
Bluntly put, too many startup business plans focus on the plus side of things. Things such as, "we would earn $ ... ... revenue per year" or "our projected sales are ... ... (million) units."
Most aspiring entrepreneurs I've spoken to also bragged about having supportive friends, valuable contacts, and so on.
What’s seldom discussed, on the other hand, is the actual background work necessary for commercial success. In other words, the nitty-gritty, mundane, and tedious stuff. This is tragic, and worrying, because very often, it’s the lack of such processes that leads to business failure.
Yes, a profitable venture requires vision, foresight, and ambition, but efficiency and organization are equally important ingredients for entrepreneurial success. Without proper backend work and preparation, any business plan is but speculation. A wild grasp for a loft target, without the instruments for it, metaphorically speaking.
Here’s a generalized business startup checklist with 10 areas that no entrepreneur should ignore. Overlook any, and you are inviting failure.
1. Have an Efficient Bookkeeping System
Business is all about making money. Therefore, what is more important than the system that manages your money?
On your very first day of operations, you should at least have the bare skeleton of a bookkeeping system in place. This must include:
- An efficient creation and filing system for all your bills, receipts, and other financial documents.
- An invoicing system that includes delivery orders, statements, etc.
- A purchase order system to help you keep track of payables.
- A scheduled and systematic process of paying your suppliers and staff.
- A recording system to keep tabs on account receivables i.e. who has not paid you.
Why must your bookkeeping system be functional on the very first day? Because money is exceptionally precious to startups. You do not want and do not need the following atrocities to begin from day one:
- Billing is delayed because you have yet to do up your invoicing system.
- It is wearisome for other companies and individuals to pay you because you keep sending them incomplete or wrongly written invoices, multiple copies of the same invoice, etc.
- You lose the faith of your staff and suppliers because your payments to them are perpetually slow.
- Oh no! You have double/triple paid someone!
In short, ensure your money flow is easy to manage and supervise. There are few things more important in any startup checklist than this. There are also lots of affordable bookkeeping software to make the task a breeze.
2. Open a Corporate Bank Account
Many entrepreneurs deem it unnecessary to have a corporate bank account or to have one immediately. I will not debate their arguments or justifications.
Instead, I’d just highlight that in the course of operating my own company, I've encountered a good number of organizations that are unwilling to pay to a supplier's personal bank account, usually for compliance reasons. Government agencies are particularly sensitive about this.
In other words, whether you need a corporate bank account depends on your client pool. If you’re selling online via a third-party platform, chances are, you wouldn’t need one. If you intend to deal with large corporations, it’s likely a must. You should know what the requirements for payment are before doing any transactions.
Managing a Bank Account
At the same time, regardless of whether you are using a corporate bank account or a personal one, you would be silly not to milk current technologies and conveniences offered. Be it Internet Banking, Phone Banking, or likewise, familiarize yourself with the ways to readily access and check your account. You will be doing this often, especially during the arduous first few months of operations.
While at this, do not forget to consolidate all information related to your account and put that on record too. This will not be just your account number and name, but also things like the bank code, branch code, and swift code.
Life in a startup is hectic, you will never have enough time. You certainly do not want to waste time on the phone or Internet finding out your bank code, just to receive a client's remittance.
Lastly, always have on hand the latest bank fees. Where I'm from, they tend to be tolerable but entrepreneurs from other countries have informed me that financial charges in their countries could easily run into hundreds of dollars
You seriously do not want payment perpetually stalled because your client is appalled by the bank transfer fees involved. Neither do you want that shock at the end of your first year, when you discover you have paid thousands in bank fees. Always have with you an updated list of fees charged by your bank. Refer to it often too.
3. Prepare Corporate Identity Materials
I'm sure many entrepreneurs would consider this a breeze nowadays. As in, one could even get a new company logo designed online within an hour.
Thus, what's the big deal? Why should this even be an item on any business startup checklist?
Again, it’s because your resources are so limited. Your time is your most valuable asset and you want to devote that to building relationships and getting deals, not laying out a letterhead or waiting for a logo so that you could prepare a quote.
In fact, it being so easy nowadays to create artwork, there’s seriously no reason at all for corporate identity not to be ready beforehand.
One more thing. Do not lose artwork files. To not be able to begin on your proposal because you can't find your letterhead, or to have to pay the printer extra to redraw your logo each time you print something, such scenarios are beyond silly.
4. Have Useable Marketing Collateral on Hand
This is often challenging. You are a brand new setup, what is there to show?
You have no testimonials. Vice versa, you have limited products and services, and samples too. Would any potential client be impressed by a portfolio containing barely 50 words?
And yet, you still need to show something. Particularly when approaching large corporations.
Begin by at least having a proper profile. A sensibly written "about us" that isn’t full of exaggerations and brags; instead, concisely describing who and what you are.
Prepare a standard list of your products and services too, a functional one that you can readily update. This could be incorporated with your profile and with some graphic layout efforts, make for a great flyer.
If you wish to take it a step further, include a schedule for churning out updated collateral in your startup checklist too. Overall, what you want to avoid is that horrid situation of you staring at a potential contract, but unable to establish contact because you have no means to professionally introducing yourself. Avoid that by meticulously scheduling and preparing beforehand.
5. Create a Staff Claims Procedure
To share, I once had an unbelievable experience at my company. During an exit interview, a staff stated she's leaving because I did not reimburse her transport expenditures within twenty-four hours. Her expectation was to be immediately reimbursed, in cold hard cash.
I have also heard from other entrepreneurs about employees caught pilfering from the petty cash pot. When confronted, those staff claimed they thought it was the way to be reimbursed for minor company expenditures.
Bluntly put, people can be strange. They get weirder when money is involved; particularly, personal expenditures.
Having a proper staff claims procedure, with a standardized form and the need for backing documents like receipts, thus saves you headaches in so many ways. It prevents skullduggery. It also gives your staff peace of mind by assuring them you do not expect them to spend on behalf of the company.
Most importantly, it reinforces the impression that you are a legitimate operation. Such an impression is crucial for staff retention; remember, many people are hesitant about working for new companies. It is also the key to retaining high caliber employees.
6. Have Multiple Sets of Company Registration Documents, Certifications, Etc.
In my country, the most basic of these is a computer printout. For other countries, it might be more complicated but my guess is that it wouldn't be anything more than a stack of papers.
Why should you have multiple sets of these on hand? Because everybody would be asking for them at the beginning. From banks to government bodies, to trade organizations, and so on. Such documents are doubly crucial if you are applying for government grants for entrepreneurs.
Again, the underlying purpose here is time management.
These documents aren't hard to get copies of, the process just requires time. In many cases, the process is also roundabout and tedious.
Having spare copies of them around thus never hurts; that is, unless they are excessively expensive to duplicate. In which case, you can still prepare yourself by at least knowing the procedure and cost beforehand.
7. Compile a List of (Potential) Suppliers
I consider this one of the most important items on any business startup checklist.
Simply put, there is nothing more exasperating than losing a valuable contract because of the inability to secure suppliers. Or not to be able to find suppliers in time.
If you have properly done up your business plan, you should also be able to forecast your supply chain. Establish contact beforehand. Do not leave the searching or the contacting till you are quoting for a job. All it takes is but a few minutes for each vendor.
Take note, though, I am not suggesting that you go about requesting tens of quotations from strangers and religiously filing these away. Such requests plummet goodwill towards you like nothing else could. Instead, devise a tactful and professional approach. For example, a phone call, or an email, maybe even a visit in person.
If potential suppliers are welcoming, ask for sample prices too. At this point, might I highlight the need to be humble while establishing contact. Never, ever, act as if you are the next big guru of the corporate world.
Remember, these establishments are older than yours. Chances are, they have encountered loads of startups that fizzled too; thus there will inevitably be some degree of wariness. Always respect potential suppliers as valuable future partners. Nothing lesser.
8. Have Some Sort of Customer Management System
You could get very sophisticated with this startup checklist item. Or it could be nothing more than a simple Microsoft Excel file to keep track of existing clients and potential ones, inclusive of a schedule for regular contact. The latter being festive greetings, call-ups, a mailed brochure, etc.
The short of it, you're not going to grow if you do not have repeat or recurring clients. To achieve this, you must work towards that dream situation of clients returning to you by themselves, without excessive persuasion.
As difficult as this sounds, the key is to just be regular. To maintain light but consistent contact.
Over time, such efforts add to your company image too. You're not that person who only calls when you badly need business, you are also a “friend.”
Lastly, work out an easy and functional method for you to maintain contact. Something that wouldn't be too much of a hassle over time. Obviously, ensure that "consistent" doesn't slip into being persistent. You don’t want to be labeled as a pest.
9. Prepare Templates of Business Letters, Contracts, Employment Agreements, Etc
Whatever the nature of your startup, you would require all types of professional documents. Some of these could be expensive to produce. For example, those that require professional preparation or endorsements.
Hang on. Are most of these documents still costly? Aren’t the bulk of them free nowadays?
Thanks to the Internet, there are all sorts of free templates for you to download. A note here. Download but have the sense to customize. Ensure that you fully understand the documents too before you go about using them.
It is humiliating, to say the least, if your client or supplier knows more about the document, and points out that you are the one not reading the finer print.
For the latter, you could additionally end up in serious legal trouble if it happens. Expensive legal trouble that could shut your startup overnight.
10. Be Psychologically Ready
Yes, you are ready to begin a business. But are you ready to operate one? To sustain and grow it?
A functional bookkeeping system, a perfect customer management software, you have ticked everything on your business startup checklist. But are you psychologically ready to be an entrepreneur? Are you able to keep to your systems and schedules? Your procedures?
Additionally, are you able to make the sacrifices in family and social life necessary to give your startup the attention it requires? Are you ready for the phenomenal amount of work needed to keep any new venture afloat, and to eventually make profits?
Most of all, do you possess the resilience for inevitable economic downturns? Can you weather failure, humiliation, and abandonment, in the long route towards entrepreneurial success?
Is your passion real? Or just a romantic notion for the moment.
To put it in another way, you are the one who needs the most preparation. The crucial one to check again and again, before operations begins. Everything else is but the gear you’re carrying.
You are ultimately the one who makes the actual journey too. If you’re not truly prepared, nothing else helps or matters.
© 2020 Yong Kuan Leong
Yong Kuan Leong (author) from Singapore on August 23, 2020:
Hi Eric, thanks for commenting. Breaking this into 3 would make for thin content, I doubt people want to read 3 articles instead of one on the same subject.
Eric Dierker from Spring Valley, CA. U.S.A. on August 23, 2020:
Perhaps you could break this up into 3 articles. I just don't have the time to break for a half an hour. Part of my start up -- schedule your time.