The 12-Step Startup Checklist

1. Figure out the money.

Ideas are great and all, but money is everything. Here are several things to consider financially for your startup:

SPENDING
Entrepreneur.com suggests that you list spending on starting assets and legal expenses, and then add them together with how much money you’ll need to get started.

• Assets are things you need to use in your business over the long term. For example, store/office space, initial stock and inventory.
• Expenses here refer to how much it costs to brand and legalize your company. You can see the brand and the legalities chapter for more information.
• Last but not least is estimating how much cash you’ll need to have for at least 6 months to cover costs and expenses while your startup is still building momentum.

SOURCES
According Stephanie Hermawan, Chief Executive of Marketeers, there are at least 8 sources of fund for your startup:

• Startup pitch competitions e.g. The NextDev or Tech in Asia Startup Arena.
• Crowdfunding platforms e.g. Kitabisa, Wujudkan.com, Gandeng Tangan.
• Angel investors, high net worth individuals who are willing to invest in your startup based on their interest.
• Impact investors who expect measureable profit.
• Revenue which can also be used as additional funding.
• Bank loans which are starting to have lower interest rates.
• Venture Capitals which make money from shareholding.
• Co-founder if you have any. Two is a perfect number (think Jobs-Wozniak and Hewlett-Packard).

Of course there are still other options such as friends/family and your own savings. Choose to use/pursue whichever fits you and the nature of your startup.

BANK ACCOUNT
Set up a bank account for your company and choose an accounting program soon after. Using your personal bank account for business might seem easier, but differentiating personal and business expenses is going to be a huge problem in the future. Note that to open a company bank account, your company needs to be incorporated. You’ll find more details in the legalities chapter.

2. Create a financial business plan.

This is good not only for convincing investors, but also as a standard of measurement in the future to see if your company is doing well. 4 things you need to create:

SALES FORECAST
According to inc.com, you need to set up a spreadsheet projecting your sales over the course of three years, consisting of:

• Unit sales
• Pricing
• Sales (units times price)
• Unit costs
• Cost of sales (units times unit cost)

EXPENSES BUDGET
Here are the elements of your expenses budget as listed by Entrepreneur.com:

Fixed Costs

• Rent
• Utility bills
• Accounting/bookkeeping
• Legal/insurance/licensing fees
• Postage
• Technology
• Advertising & marketing
• Salaries

Variable Costs

• Cost of goods
• Materials and supplies
• Packaging

Direct Labor Costs

• Customer service
• Direct sales
• Direct marketing 

 

FINANCIAL PROJECTION 
Now you can do your financial projection which includes three documents:

• Cash flow statement
  Project a cash-flow statement broken down into 12 months. Choose a realistic ratio for how many of your invoices will be paid in cash, 30 days, 60 days, 90 days and so on.
• Income statement
  Forecasts for your income for the coming three years. Use the numbers that you put in your sales forecast, expenses budget and cash flow statement. Gross margin is the difference between sales and cost of sales. Subtract it with expenses, interest and taxes, and you’ll get your net profit.
• Balance sheet
  The balance sheet shows the business’s overall finances including assets, liabilities and equity. Typically you will create an annual balance sheet for your financial projections. 

BREAKEVEN ANALYSIS

Based on your three-year projections, you’ll be able to calculate a breakeven point, which is the time when your expenses match your sales. Intuit.com claims that most startups break even in about 18 months, but how long it takes really depends on the business. 

3. Choose a company name.

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Choosing a name for your company can be overwhelming. Here are several tips to ease the process: 

BE MEMORABLE
According to smallbiztrends.com, you want a name that will stick in your target audience’s heads. Don’t pick a name that is long or confusing. 

BE THOUGHTFUL
www.entrepreneur.com suggests that you choose a comforting or familiar name that conjures up pleasant memories so customers respond to your business on an emotional level. 

BE BOLD
According to inc.com, some businesses are so concerned about gaining credibility that they will sacrifice an edgy or attention-getting name. The question is, do you want to fit in or stand out? 

BE ORIGINAL
This goes without saying, but the name shouldn’t already be taken by another company. Check for its availability on Google or www.dgip.go.id, where you can also register it. Here are a list of things you need to prepare for most trademark registration processes in Indonesia:

• Basic applicant information (name, address, nationality)
• 30 samples of the trademark sized 9 x 9 cm maximum and 2 x 2 cm minimum.
• A list of products or services that use the trademark
• Applicant’s statement of ownership (Surat Pernyataan Kepemilikan)
• A copy of applicant’s KTP
• A copy of company NPWP 

 

Stuck with the naming process? Some branding consultants offer brand naming as one of their services. Drop your message here. We’d be glad to help. 

A free printer-friendly version is available for you to download here.

 

The brand

4. Know yor purpose
5. Hold your values
6. Develop a visual identity

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4. Know your purpose.

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Instead of defining a vision, more and more startups are building their companies around a core purpose. It’s more than being the best or the biggest; it’s what you and your company value highly. It’s more than what the company aims to be; it’s how it relates to the consumer and the society. 

In his online tool Vision Framework, American business consultant and best- selling author Jim Collins points out 7 questions anyone should ask themselves when shaping their company’s core purpose:

• Do I find this purpose inspiring?
• Can this purpose be valid in 100 years?
• Does the purpose help me think about expanding the company’s range of activities over the next 100 years? (we’re talking products, services, markets, industries, and strategies)
• Does the purpose help me to decide what NOT to pursue? (For example, HP would not pursue markets where there are no opportunities to make a technical contribution).
• Is this purpose authentic, not just words that “sound nice”?
• Would most people in the company be enthusiastic (NOT cynical) about this purpose?
• When telling my children or loved ones what I do for a living, would I feel proud about this purpose? 

Your core purpose is one that best meets the above test questions. 

5. Hold your values.

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Again, instead of missions, companies are moving towards building a set of core values to be held by anyone in it. Good core values are those that stem from your company’s core purpose yet can be applied to any industry, and also those that focuses not only externally but also internally.  

Write down a list of core values for your company and test each of them against these 7 test questions:

• If I was to start a new company of any industry, would I build it around this core value?
• Would I want my company to continue to hold this core value in 100 years, no matter happens in the outside world?
• Would I want my company to continue to hold this core value, even if in the future it became a disadvantage?
• Do I believe that people who don’t hold the same value don’t belong in my company?
• Would I personally continue to hold this core value even if there’s no reward?
• Would I change jobs before giving up this core value?
• When I have more than enough money for early retirement, would I keep this core value and be productive?

To give you a better picture, here are the core purpose and values of two of the world’s most successful companies.
 

SONY (1954)

To experience the sheer joy of innovation and the application of technology for the benefit and pleasure of the general public

• Elevation of the Japanese culture
• Being a pioneer; doing the impossible
• Encouraging individual ability and creativity
   

HEWLETT-PACKARD (1950s)

To make technical contributions for the advancement of science and welfare of humanity

• Respect for the individual
• Affordable quality and reliability
• Collaborative creativity
• Community contribution and responsibility
• Profitable growth 

 

6. Develop a visual identity.

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Your logo, colors, and other elements can help people easily understand what kind of company they are dealing with. Here are several suggested steps based our expertise that are needed to achieve a solid image that best represents your company. 

1. KNOW YOUR CORE IDEOLOGY
This is the first, most crucial step in the overall brand creation, but you’ve already got it covered in the previous steps.

2. LOOK AT YOUR COMPETITION
Learn from other companies that you might consider as your rivals to determine what makes yours different than others.

3. HAVE A LOGO CREATED
A logo lets the consumers recognize your company. It is constructed based on the core ideology through careful selection of design elements.

4. PLAN ITS CONSISTENCY
Your website, social media pages, mobile app, print materials, packaging, and anything else you can think of should communicate one cohesive identity. In other words, your company should maintain a certain look and feel across all platforms. A Graphic Standard Manual is a set of guidelines that ensures the consistency of your company’s identity. 

Contact a branding agency to assist you in putting together a visual identity for your company. You could drop us a message through our contact page.

Get all 12 steps in a free printer-friendly version, available for you to download here.