Checklist for Starting a Business for Skills-Based Careers

By Sarah Hicks

Many skills-based professionals dream of starting their own businesses. It’s a natural next step. After all, entrepreneurial thinking is a common trait for many of these careers, and hands-on jobs are among the fastest-growing occupations in the United States, according to the Bureau of Labor Statistics (BLS).

Skills-based roles that can be turned into businesses exist in many industries. Examples include:

• Bookkeepers, who provide financial services to small businesses.
• Auto and diesel mechanics, who keep vehicles running smoothly.
• Graphic designers and technical writers, who build businesses around their creative skills.
• Skilled tradesmen, such as carpenters, electricians, plumbers and HVAC techs, who leverage their skills for self-employment.
• Computer-savvy professionals, such as software developers and IT support specialists, who help other businesses run smoothly.

Careers that lend themselves to starting your own business are plentiful. The difference between those who start a business and those who don’t often boils down to vision and who does the hard work to set themselves up for success. That’s where this step-by-step checklist for starting a business comes in handy.

1. Assess the market — and your skills

The first step is to conduct thorough market research to understand trends, potential customers and potential rivals. What are the needs and demographics of your target customer? Investigate the industry thoroughly to understand who is already in the space. By analyzing the competition, you’ll understand the landscape — including pitfalls and opportunities.

Next, evaluate the demand for your skills in the market. Can you deliver a service or product that’s better or faster or cheaper than what’s currently available?

Finally, ask yourself one more question: Why do you want to launch this business? As Business News Daily explains, defining your “why” allows you to see if you’re starting a business to meet a true need or to placate your ego.

Once you’ve aligned your skills and market demand, you’re ready to take the next step.

2. Write a business plan

Writing a business plan involves several steps.

1. The most important element is defining your business goals. What’s the purpose of your business and who are you selling your services or product to? Some of the work you did in the assessment step will help you get started, but you need to go deeper and spell out your mission and priorities.
2. Outline the inflow and outflow of money, including up-front costs and financial projections. Search for business plan templates online and download several examples to find the one best suited to your situation.
3. As you’re creating your plan and running the numbers, don’t forget to incorporate a marketing strategy to promote your services.
4. Learn from other small business owners’ successes and hear from experts. Verizon Small Business Digital Ready is a resource that offers courses, coaching events, networking opportunities and grants. This free program is designed to give small businesses more tools to succeed in today’s digital world. The information is relevant to many steps in this process, from legal essentials and funding to business strategies.
5. Look at the data. If you understand the statistics, you’re more likely to succeed. The BLS numbers reveal a pattern: Most businesses survive for two years, but after that, failure rates rise. Only about 20% of businesses last 10 years. The primary reasons for failure are cash-flow problems and lack of demand.

The amount of work you put into this phase of the process will pay off because the research forces you to think short-term and long-term. Don’t be tempted to cut corners. Asking and answering the hard questions now will help you overcome obstacles later.

3. Take important legal steps

First, choose the right legal structure for your business. This is a crucial step that will have implications throughout the life of your business, including taxes and personal liability. Once that step is done, it’s time to take care of several other legal tasks:

• Register your business. The structure of your business will determine the amount of paperwork required for this step. At the least, you’ll need to register with your city or county clerk and meet their requirements.
• Get federal and state tax IDs. The next step is checking in with your state. If you are the only employee of your company you may not need an employer identification number (EIN) from the Internal Revenue Service (IRS), but you may want to do this regardless. (Wondering if you need an EIN? Take this IRS questionnaire to learn the answer.)
• Apply for licenses and permits. Many skills-based jobs require a professional license. If you’re already practicing a traditional trade, such as plumbing or carpentry, you may have already taken this step at your local or state agency. Check the Small Business Association (SBA) website to know if you also need a federal license or permit.

4. Complete initial financial tasks

Getting your finances in order involves some of the most important steps in the business creation checklist.

1. Understand your tax obligations with help from the SBA.
2. Set up a business bank account. Choose your bank wisely and make sure it’s aligned with your needs now and in the future. If a personal relationship is important to you, consider a smaller, community bank.
3. Get insurance. The type of coverage you need will depend on the type of business you start, but general liability insurance is a smart first step.

Will you fund your business or will you need assistance? As your financial outlook takes shape, you’ll know if it’s time to get financial support. Grants are one way to get additional money, and unlike business loans, they don’t need to be paid back.

The federal government is the biggest source of funding. Grants.gov is an easy-to-explore database of grants for small businesses administered by different federal agencies. Other sources can be state government or even businesses. For example, once you sign up for the Verizon small business tools mentioned above and take at least two free courses, you’ll be eligible for grants and incentives.

5. Build a smart brand

After you’ve finished the legal and financial tasks, it’s time to focus on your brand. You want to create a brand that reflects your expertise and spells out what makes your business different from the competition.

As part of the brand process you’ll need to:

• Design a professional logo and craft a compelling brand story. These two storytelling devices should be memorable, so invest the time and resources required to make them shine.
• Create a professional website. Showcase your skills and services and be consistent with your messaging, color palette and visuals.
• Use social media platforms and tools for marketing. This isn’t a nicety; it’s a necessity for reaching more people and driving interest. There are plenty of social media platforms to choose from, but not all of them make sense for every business.

Get professional help for any (or all) of the tasks that don’t come naturally to you. These brand elements will be the first exposure most potential customers will have to your business.

6. Build a strong network

Last but not least, you need to build a professional network within your industry.

If you haven’t already, join relevant associations and go to community meetings. Look for opportunities to collaborate with other professionals.

Throughout the process, ask for guidance and seek out mentors. You don’t have to do this alone.

Starting your own business isn’t easy, but if you work through this checklist, you’ll establish a solid foundation to build on, allowing you to focus your energy on the entrepreneurial journey ahead.

Sarah Hicks is an editor and writer with expertise in workforce training and sustainability.