Entrepreneur’s Checklist, note that this a starting point but by no means totally exhaustive, however, it should prove useful to give you an idea of the issues that need be considered in commercially launching a product into the marketplace. Always see an expert in the following issue areas to make an informed decision.
- BUSINESS ENTITY FORMATION OPTIONS; C corporation, S corporation, Limited Liability company (LLC), and the choice of jurisdiction for business registration, you can also start as a sole proprietor or have a general partnership and change your choice of entity at a later date.
- Choice of entity is based primarily on your tax situation, i.e. the total amount of your income, the nature and sources of that income, wherein the choice of entity can minimize your total tax obligation.
- How are you are going to raise capital for your company; stocks, venture capital, angels, merger prospects, loans, personal funds, etc.
- Liability issues for your business, although generally Corporations and LLC’s protect you from personal liability from the business, they are by no means absolute as defects in the administration and management of the entity can cause you to have personal liability.
- Disposition and number of owners and employees including the desired relationships between the aforementioned parties in ownership, financing, operating, and succession plans.
- BUSINESS PLAN, used primarily for raising capital and secondarily to provide a “roadmap” for the business owner to follow in executing their vision into reality.
- The business plan doesn’t have to be the Magna Carta cast into stone, it should be an evolving document that is not excessively detailed, but concise and to the point, 20 pages or so should be enough.
- Write the plan for whom your presenting it to, i.e. the primary purpose stated above.
- Have a table of contents.
- Address negatives for your business or product, remember there is a downside to everything somewhere.
- Include a timetable or schedule for everything, be realistic remember things tend to take longer than you think.
- Have financial projections including revenues, expenses, capital purchases, i.e. a complete budget.
- Provide information on your company’s human resources team expertise, also outside consultants (legal, financial, marketing, manufacturing, etc.), this is very important to potential investors.
- What is your basis for competitive advantage? This would include proprietary technology, your particular teams expertise, your market position in relation to competitors, manufacturing advantages, customer profiles, etc.
- Leave investment returns and ownership of investors open to negotiation.
- PROPRIETARY TECHNOLOGY
- Create a portfolio of all of your intellectual assets, including your teams expertise, pending and issued patents, trademarks, and copyrights, also trade secrets, and other items such as customer goodwill, reputation of the company and products, etc. In addition, confidentiality agreements (inside and outside), license in and / or out agreements, policies and procedures for protecting your intellectual assets, and any other “know how” your company possesses to show your diligence in this area.
- Remember that your business plan is a trade secret also.
- Disclose affiliations and partnerships with others that give you access to outside proprietary technology.
- Be aware of your markets activities to watch for infringers of your technology. Look at infringement abatement insurance for plaintiff and defense.
- OPERATIONAL ISSUES
- Real property (office and factory), lease versus buy; generally if your needs are somewhat uncertain for the future as far as location changes and amount of square footage, it is usually best to lease at least initially. Other real property factors to consider are, insurance for your companies personal property, subletting, assignment, improvements, etc.
- People who work for you; issues include clarity on the workers status, an employee or an independent subcontractor. An employee (hourly or salaried) will require taxes to be withheld, have worker’s compensation insurance, come under minimum wage and overtime laws (for hourly). Employee compensation can also be in the form of stock (having ascertainable value). Employees can further be split into “at will” or under employment contract, most employees are “at will” meaning that either employee or employer can terminate the relationship at any time without cause (assuming no otherwise illegal discrimination). An employee under contract will have rights for the length of the employment and compensation. Confidentiality agreements to protect your intellectual property should be executed with all individuals who perform work for you, including independent contractors and all employees. In addition, other factors to consider in confidentiality agreements are non compete, non solicitation, intellectual property rights for prior to employment, during employment, and after employment has terminated should be determined. Also, be aware of immigration, sexual harassment, plus medical insurance, layoff, vacation, and holiday compensation, and the like that need to be confirmed for any applicable laws.
- Establishing an infrastructure which includes accounting and financial systems, inventory, payroll, cash flow, income statements, balance sheets, payables, receivables, customer, market, and competitor data.
- Product design issues, certification by various agencies, i.e. UL, Factory Mutual, ISO, and the like.
- Managing suppliers and having alternates, watching supplier quality.
- Understanding manufacturing capabilities, at which manufacturing quantities does your process change and the relationship of manufacturing quantity versus cost. Plus quality control of manufacturing.
- Understanding shipping issues unique to your product related to distance shipped, size, weight, type of packaging, and domestic versus foreign particulars.
- Obtaining product liability insurance, large retailers will require this. Also freight insurance and engineering design errors / omissions insurance.
- ESTABLISHING A MARKET PRESENCE
- Do your research to determine a brand name, logo, color scheme, packaging, etc. to identify yourself to your market. Also, protecting your identity with federal trademark registration. In addition, determining your promotional plans and sales support materials. Understand all warnings, notices, standards compliance (industry and / or legal), and warranties / disclaimers.
- Obtaining bar codes, see www.uc-council.org
- Selling your product; Internet, employee sales people, representatives, distributors, channels of distribution, retail outlets, etc.
- Consider private branding and becoming an OEM.
- Consider selling to the government.
- Also consider going international, don’t forget that intellectual property protection, i.e. patents, trademarks, and copyrights are on a country by country basis, thus you may consider for instance foreign patents, note that there are strict rules on having to file all of your patents worldwide within a year. Plus, don’t forget to check if there are any international standards compliance issues, reference ISO, etc.
- Mine your customers for data to improve your product and service, such as focus groups, surveys, etc.
- Know your competitors or in other words your customer’s alternatives to your product or service, even if they are not direct competitors, this will be a major factor in your understanding what price level your product or service will be at.
- Getting the word out to the public on your product or service; advertising, promotion, press releases, publications, trade shows, telemarketing, etc.
- Always make a professional appearance, use skilled photographers, high quality printing, and well organized presentations, don’t come across as an amateur.
- Network in your industry, learn from others who have been there, avail yourself of all opportunities such as licensing and sale of your know how.