10 Essential Tips for Surviving Your First Year of Small Business
After listening to so many stories of successful entrepreneurs, you have decided to leap into the rough waters of the small business ownership. Now, you must be beaming with the excitement, after all, you are starting a new chapter in your life in order to get embrace success in your life.
But never forget, getting started is only the beginning. You will encounter various problems and even success in this long journey, especially in the very first year of the business.
In the growing period of the business, you will come across with the hardest time, whether it’s about marketing, branding, or attracting more customers toward your business. In order to complete all the tasks with full dedication and enthusiasm, you have to learn to stretch cash in every creative way to help you make it through that tough year.
If you have heard of the naysayers, you would yourself have realized that 90% of the new businesses are destined to face the failure stage. However, the reality is much much brighter than this saying.
As per the U.S. Bureau of Labor, 75% of new businesses survive in the first year, 69% survive the first two years, and 50% make it to five years. And, around 82% small business fails due to cash flow problem. So, It’s like you have 50-50 chances of surviving and reaching the goal. Still, don’t sit back and let chances dictate the way of getting success for your business.
If you are looking for some tips for surviving in the very first year of your business, then this article would help you to achieve your goal and vision.
10 Essential Tips for Surviving Your First Year of Small Business
Here are some tips you can take to make sure to survive that first year of small business ownership, and ready to take it to the next level.
1. Produce a Solid Business Plan
The first thing for surviving your first year of small business is to produce a solid business plan. The business plan will help you to build a path like how you are going to achieve the success of your business.
In the business plan, you need to make sure that you are adding a clear idea and goal for your small business. When the business plan is crystal clear for you, then you can follow those ways without any second thought.
There is no denying the fact that it is good to have ideas circulating in your head, but if you got confused on the roundabout of the road. Like which way do you want to choose? Right or Left?
That’s why, rather than keeping every business idea in your mind, it would be better for you to put all those ideas on paper so that you can stay well-organized your thoughts, and visions.
2. Keep Your Expenses Low
Finances are the backbone of every startup. If you want to have a robust spinal cord for your business, then you should always keep an eye on your expenses. As we all know that new business typically fails when they run out of the cash, just pay attention to keep your costs as low as possible until you build out your products and services in the market.
More importantly, hire those people only who you need desperately, otherwise, it will be better to hire freelancers and contractors for the rest of your business. Also, you can start your work by taking virtual spaces in various organizations. It’s not mandatory to hire a full space for your business. In short, spend money on the things you need, not the things you think a business should have.
3. Reinvest Back in the Company
If you are thinking of leaving your job because of your dream to set up a business in the competitive marketplace, then always keep in your mind that you have plenty of money. Further, when you will earn a profit from the entrepreneurship, then don’t waste your money on your expenses whether it’s your personal or professional.
In fact, pay attention to the stability of a paycheck and then reinvest back into your company’s assets. You can also spend on the improvisation of products, and services of your business. And believe it or not, there will come a time when you will be the last ones to be paid during the first year.
4. Review Your Finances Monthly
The next tip that you can add in your business plan in order to survive for the very first year of your startup. Since in the above-mentioned tip, we have mentioned about keeping a borderline between your personal and business expenses, so this tip will let you know the importance of maintaining a record of your monthly finances.
When you don’t know in which sector you are spending, then do you think, you can do your business in the marketplace? Yes, that’s the main point! You need to fix sometime in order to review the expenses of every month.
The main idea of skimming and scanning of the financial records is to make sure that you have spent the money in the right directions and places. Always do double-check of every financial statement so that you can nullify all the chances of wasting money. It is much easier to stop a cash leak early on. For ex: If you’ve a construction and real estates startups, knowing how preliminary notices and liens work can save your cash flow.
5. Stay Contacted with your Networks
In order to survive at least for the first year of your startup, you need to have more contacts. The more people you know, the better will result. Whether you are meeting the people at a business conference, dinner parties, coworking spaces, leverage those networks as much as possible.
Who knows, when you meet someone in your life, can do wonders in your life. They can give your reference to their colleagues, partners, and even their fruitful contacts. If they find your business worthy, then you can help you to grow your business.
Moreover, you should always attend 2-3 in-person networking events a month to build your network. Also, you can embrace your network with them through LinkedIn, Facebook, Twitter, and Instagram. Contacting your local industry associations can also help you to get promising leads and strategic alliances as well.
The benefits of leveraging your contacts for your business is not limited to just attracting new opportunities for growing your business, but also to help you to remain up to date for new companies that are popping up in the area and any new technology that might affect your business operations.
6. Have a Back-up Plan
Another connected tip for surviving in the very first year of your startup is always to have a back-up plan. If things take a turn for the worst, then at least you have a few options to fall back on. This tip is the most important in order to plan for success, not for the failure stage.
As a matter of fact, no one wants to find himself stuck in a situation where their business run out of money. Therefore, make sure that you have some funds in your place in order to help in emergencies for your business and personal life.
Starting a business is like taking a ride on the roller-coaster, the more you have backup plans, the more you will feel safe. But still, in the end, commit to your idea, but also commit to supporting yourself and your family.
7. Be Ready to Adapt
No matter how you are planned to make your business success, there will always be new and unexpected twists that would come to your way. In order to keep the flow of your life and business smooth, it’s best to have an open mind and be willing to adjust in every idea and strategy.
Change is an inevitable truth. Whether you are starting a new life or a business, you will have to face the changes either it is the positive or negative direction. When you think you need to have some changes in your business plan, then don’t feel upset or worried, just bring that change in your business and do well.
8. Focus on your Customers
Your job is not just limited to create brilliant products or services for your business; you are also required to help your customers. Always stay connected with their needs and requirements.
And based on their feedback, you can adapt everything. When you build something that people actually need and want, the flowchart of sales will automatically increase over time.
9. Don’t mistake Hyperactivity for Productivity
No doubt, in today’s work culture, all are busy doing various activities. But did you ever feel like asking yourself, how much of this business is actually moving the company in the forward direction?
In the earliest period of your business, you need to be very selective in how you spend your time and resources. Several business owners burn at both ends, yet only move sideways and not forward.
10. Make a Longer Runway
And last but not least, work for your longer-plans in order to survive for the very first year in the marketplace. There are some cases when entrepreneurs give some time to themselves in order to check whether they are doing good. Then if they can’t generate revenue them they decide to switch off everything.
This is not the right way to run a business. Sometimes, many companies took more than one year to reach profitability. So, one of the best ways to last beyond the year mark is to recognize and plan for the fact that it may realistically take 18-24 months for your business to get off the ground.
Are you ready for surviving in the first year of your business?
Starting a business is a stress-inducing and risky endeavor. The more you keep your arms open for various opportunities, the more you will attract success to your place. But never forget that there will be some time when you have to face the stage of struggle, fear, and failure.
Don’t be afraid to take the plunge, be conservative in your plans, measures, investments, and then adapt things. And just follow these mentioned above steps and write a business plan so that you can use that in order to run your business.
Moreover, just use a budget, and stick to it, review your financial statements monthly, get clear about your target customer, and stay flexible, you might just survive your first year in business.
Like what you're reading? Get fresh tips to start & grow your company.