Our Complete Checklist to Starting a Company
1. Entity structure:
A. Expected growth and size.
B. Industry specifications.
C. Ownership structure expected.
D. Tax ramifications.
E. Compensation of owners. Will it be salaries and/or distributions, and do you expect the distributions to be just proportionate.
F. Type of assets that will be used in the business.
G. If capital must be raised.
H. Expected exit strategy.
I. Expansion plan. Will it be multi-state, international, will you need private equity, do you expect to have a future public offering. Intellectual property.
2. Accounting systems, concerns and decision drivers:
A. Expected size.
B. Inventory tracking.
C. Products and service offering.
D. Do you plan to keep the books yourself?
E. Will you have multi locations?
F. Will you need subsystems?
H. Will you need a strong cost accounting system for manufacturing?
I. If retail, will you be using a point of sale system?
J. Will you have a full service real-time system or do after-the-fact accounting?
K. Will you have multiple users?
3. Human capital:
B. Compensation structure.
C. Functionality needed in the early stage and through maturity.
D. Define your hiring pattern that you expect at various revenue levels.
4. Capitalization/Banking requirements:
A. Banking requirements.
B. Will you raise capital?
C. Will it be self-funded?
D. Do you potentially need a partner with knowledge and capital?
A. Contractual agreements.
B. Entity set-up.
C. Employment agreements.
D. Non-compete agreements.
E. Engagement letters with clients or customers.
6. Revenue streams:
A. Revenue recognition method.
B. Segments or classes.
C. Associated direct cost.
7. Cost and expense structure.
A. Fixed assets needed.
B. Percentage of cost expected.
c. Percentage of human capital expected with their job functions required.
D. List of operating expenses.
E. Full projections.
A. Month-to-month for 24 months and 3 years annual.
B. Painted picture for 1 year, 3 years, 5 years, 10 years.
C. Full assumptions for your projections.
D. Write an executive summary.
9. Draft a business plan.
D. Marketing plan.
E. Risk factors.
G. Capitalization table.
H. Team and capital.
J. Quality of earnings analysis that defines the sustainability of cash flow, internal controls, repeatable income, and cost control.
10. Expansion plans.
A. Distribution channels.
B. Geographical reach.
C. Product mix.
F. Your core business.
G. Defined timing hurdles.
A. Core values.
D. Hiring of the right people.
E. Marketing plan defined.
F. Suppliers required.
G. Are you going to get traction.
H. Delegation. Building a company to sell it in the future.
I. Prevent from being a job shop.
J. Time, devotion in the start-up, but we are focused <Inaudible> and will you be able to ignore shiny objects.
12. Exit strategy.
A. How do you plan to exit. Create a succession plan that indicates timing.
B. Expected earnings.
C. Cash to be retained to supplement exit.