Checklist for Starting a Business

• Occupational Safety and Health Administration (OSHA) requirements?
• Regulations covering hazardous material?
• Local ordinances covering signs snow removal etc.?
• Federal Tax Code provisions pertaining to small business?
• Federal regulations on withholding taxes and
• Social Security?
• State Workmen's Compensation laws?

Protecting Your Business

It is becoming increasingly important that attention be given to security and insurance protection for your business.

There are several areas that should be covered. Have you examined the following categories of risk protection?

• Fire
• Theft
• Robbery
• Vandalism
• Accident Liability

Business Premises and Location

• Have you found a suitable building in a location convenient for your customers?
• Can the building be modified for your needs at a reasonable cost?
• Have you considered renting or leasing with an option to buy?
• Will you have a lawyer check the zoning regulations and lease?

Merchandise

• Have you decided what items you will sell or produce or what service(s) you will provide?
• Have you made a merchandise plan based upon estimated sales to determine the amount of inventory you will need to control purchases?
• Have you found reliable suppliers who will assist you in the start-up?
• Have you compared the prices quality and credit terms of suppliers?

Business Records

• Are you prepared to maintain complete records of sales income and expenses accounts payable and receivables?
• Have you determined how to handle payroll records tax reports and payments?
• Do you know what financial reports should be prepared and how to prepare them?

7. FINANCES

A large number of small businesses fail each year. There are a number of reasons for these failures but one of the main reasons is insufficient funds. Too many entrepreneurs try to start and operate a business without sufficient capital (money). To avoid this dilemma you can review your situation by analyzing these three questions:

• How much money do you have?
• How much money will you need to start your business?
• How much money will you need to stay in business?

Use the following table (personal financial statement) to answer the first question:

Table 1

Personal Financial Statement

____________, 20 ___

ASSETS

• Cash on hand
• Savings account
• Stocks, bonds, securities
• Accounts/notes receivable
• Real estate
• Life insurance (cash value)
• Automobile/other vehicles
• Other liquid assets

LIABILITIES

• Accounts payable
• Notes payable
• Contracts payable
• Taxes
• Real estate loans
• Other liabilities

The answer to the third question (How much money will you need to stay in business?) must be divided into two parts: immediate costs and future costs.

Table 2 — START-UP COST ESTIMATES

• Decorating, remodeling
• Fixtures, equipment
• Installing fixtures, equipment
• Services, supplies
• Beginning inventory cost
• Legal, professional fees
• Licenses, permits
• Telephone utility deposits
• Insurance
• Signs
• Advertising for opening
• Unanticipated expenses

From the moment the door to your new business opens a certain amount of income will undoubtedly come in. However this income should not be projected in your operating expenses. You will need enough money available to cover costs for at least the first three months of operation.

Table 3 (estimate of monthly expenses) will help you project your operating expenses on a monthly basis.

Table 3 — EXPENSES FOR ONE MONTH

• Your living costs
• Employee wages
• Rent
• Advertising
• Supplies
• Utilities
• Insurance
• Taxes
• Maintenance
• Delivery/transportation
• Miscellaneous