Every year I do an annual clean up of files and folders and general maintenance of my primary machines and backup solutions and what inevitably happens is that I discover old documents or WIPs (“Works in Progress”) that need to be captured in a more discrete and better fashion.
What I’ve done in the past is revisit some of these documents, tidy them up, and then store them for future use but I feel as if my blog should be / could be a better place for storage, as well as an opportunity to help others (if it makes sense).
Once upon a time, when I was building my first few companies, I sat down to write out a “checklist” of sorts that I could use for the future.
In time, a lot of this information became second nature and I no longer felt like I needed a checklist but it was a great place to start and was enormously helpful when communicating with partners or other stakeholders, especially new ones that you are still trying to learn to communicate with.
And to be honest, I eventually discovered that I found greater success by just getting started than by working through any long checklist, but, needless to say, some of this is still super-applicable and very helpful!
So, here’s a Startup Checklist that I’ve used in the past that you might find helpful and a few notes that I’ve made to myself as I’ve gone through the process a few times.
Please note, some of my personal comments are old-ish and may not be as useful as they once were when I started building my first company back in 2006/7.
Startup Business Checklist (of Sorts)
Summarize Your Idea
Make sure your idea is focused so that you can express it clearly in 50 words or less.
Test Your Idea
Market research doesn’t have to be complicated or expensive, but it’s critical that you get a sense of the waters that you’re entering. Testing your idea with potential customers and others who can provide some constructive feedback is always helpful, even if you don’t do too much. Be prepared to be surprised and maybe even shocked with some of the responses. You don’t have to accept or even change anything you’re doing but you should be prepared to do so.
Protect Your Idea
I don’t sign NDAs and I don’t expect anyone to sign one from me. That being said, be discrete about the right type of stuff to the right people. Remember, execution is everything, so spend most (if not all) of your time building, testing, and learning from users.
Create a “Business” Plan
Most business plans suck but they are still important as calibration exercises. They don’t have to be longer than a page and the process of codifying some of your core thoughts before you start is cathartic and incredibly informative, even if it’s just for yourself.
Often times I’ve surprised myself when I’ve written my idea out to discover how ridiculous my original, in-my-own-head thoughts are and how ridiculous they might sound. The process of writing out a few sentences and a paragraph (or two) has made a world of difference.
Choose a Structure
For legal and financial purposes. Don’t be an idiot, get this done and get some real help. Sole proprietorship, partnership, incorporation, LLC. Whatever. Do it.
Designate a Registered Agent
States require that you have an “agent” of the corporation or LLC. There are laws around this so make sure you get this right.
Lock In Your Location
At one point I really cared about this but most of my work has been online, but this is still important for incorporation (like Delaware) and even raising venture capital. Every state has a different corporate income tax, personal state tax, licensing fees, and capital requirements. Don’t become an expert, just know what’s what.
Focus on Funding
Like the business plan, make sure you have an idea of how you think you’ll make money. Emphasis on “think” and it’s okay if the honest answer is “I don’t know… right now.”
Build a Team
People is everything. You’ve learned this time and time again. In fact, it’s more important than the “right” idea. Make sure to work in an environment where trust is fundamental. You will eventually build an entire philosophy around this.
Pin Down Your Company Name(s)
Your name is important and getting the .com is even more important. See Paul Graham’s thoughts on this.
Setting Up Shares
If you plan to incorporate as a C or S status then you have to create articles of incorporation. You can get professional help on this, by the way.
Compliance (in 5 Steps)
- Keep your corporation or LLC in good legal standing.
- Keep proper corporate records.
- Do not commingle personal assets with business assets or make personal use of business property.
- Operate your corporation at “arm’s length”.
- Always identify your business by a corporate name.
Cash and Credit Management (in 5 Steps)
- Age your receivables.
- Calculate your collection period and apply the “40-day/30-day” rule of thumb to see if you have a problem.
- Identify slow-paying customers.
- Pursue delinquent accounts vigorously.
- Identify fast-paying accounts and try to increase their number.
Chart Business Progress
You won’t learn much at first about business metrics but the more you grow the company (and mature as a founder) the more important these things become. Measuring things like:
- Sales growth (number of calls, close rations, etc.)
- Cash management (accounts receivable/payable, cash balances, inventory levels, future projections)
- Customer feedback scores (e.g., service ratings)
- Employee feedback scores (periodic surveys measuring morale, commitment, communication, etc.)
Set a Starting Date
Just because you can and you should. You’re building a story of how you built a company and the date for some of this stuff will be important for you much later.
Document the Journey
Clearly you blog a lot so you should keep doing that.