How to Survive the First Year as a Business OwnerWritten by Mindaugas on August 27, 2018
To survive the first year as a business owner can come across as a difficult process. Would-be entrepreneurs revert back to the staggering statistics that disclose the dismal survival rates of new companies – it can be rather off-putting.
Good news is that you don’t have to let the notion of potential failure decide your outcome. Start off on the right foot – your first year as a business owner is critical, it will set a foundation for the years to come.
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Going through these initial motions may ultimately dictate the chances of your success. Think of this as building the right entrepreneurial habits in the beginning. I am sure we are all aware of the consequences bad habits can bring in both personal and professional life.
Now that I have affirmed the importance of your first year as a business owner, what aspects can bolster the chances of your success? Let’s dive in and see.
Don’t skip the business plan creation process
You may be tempted to skip out on the business plan creation process, but I would suggest that you go ahead and make the plan. By taking some time to create a business plan, you’re able to confirm and perhaps reassess the purpose of your product or a service.
Consider what improvement you wish to bestow upon your customers with what you’re offering. How will you affect the quality of life of your consumers? Are you solving any current or future problems?
A business plan will also come in handy when you’re looking to secure potential loans or bring on-board investors. It instills a bit of confidence in individuals who are parting ways with their cash to provide you with financial backing.
Now this doesn’t have to be an intricate 50 page report about each and every step you want to take for the foreseeable future. Your business plan needs to be clear about the business path you’re looking to take. This may also help everyone involved get a sense of how you wish to proceed with your company.
Branding your business
Branding plays a pivotal role in the overall success – or failure – of any business. With the right branding strategy, you can create paying customers and turn them into brand promoters.
Marketing and promotion are an integral part of business operations, but it only scratches the surface of your overall branding approach. You want to cultivate association between your business and its core values.
From the basics, such as your mission statement, to the more nuanced like the production of goods – it all impacts the perception of your brand. Adjectives usually start flooding your brain after hearing a brand name – charitable, ergonomic, user-friendly, etc. How would you want your company to be viewed by your audience?
Re-branding is an expensive undertaking. Be sure to start formulating your brand the right way from the get-go.
Reduce operating expenses whenever possible
By that I don’t mean that you should sacrifice quality to reduce your expenses. New businesses tend to get hopped up too quickly and start succumbing to frivolous spending, throwing money at anything that promises to fulfill their needs, only to come up short.
Be smart with investment and cash allocation. Many new businesses don’t withstand the test of time due to fiscal irresponsibility.
Hire only the necessary individuals – you may even rely on outsourcing and freelancers to get some of the work done. Hold off from renting an office space if it’s not required – this is a considerable business expense. Keep your wits about you and fork over your cash only on necessities.
Keep reinvesting into your business
This may be a hard pill to swallow, but usually in the first years of business, entrepreneurs don’t line their pockets with cash. You need to reinvest the money you make in additional product development, marketing, and your employees – if you have any.
Have adequate savings that will support you while you get the business off the ground. A new company tends to go belly up when insufficient investment is being made to induce growth.
Have your customer in mind
You’re not paying the bills, your customers are. Consider what your product or a service is bringing to the table from the customers point of view. It’s in your company’s best interest to hone in on the customer to see how else the product can be improved or elevated.
The first year may consist of tweaks and alterations to your product based on feedback gathered from your customers. It’s possible that you may have initially overlooked some key faults or inadequacies – keeps your eyes and ears opened to see what customers have to say about you.
Give consumers an easy way to provide you with feedback and reviews. Many social media platforms give users the ability to grant star ratings, leave reviews and share comments or concerns about the business they had encountered.
Your website may can also host a feedback box. Just another way to gather valuable intel about how well you interact with the consumer and if your product fulfills their needs.
Building professional relationships will never go out of fashion. You need to network aggressively in order to cultivate beneficial partnerships. The more people you know that you can trust, the better off you will be.
Who knows what people you may come across – valuable vendors, investors, partners, or even customers. As you start to reach out more, you’re increasing the chances of valuable opportunities arising that will benefit your venture.
Try and take part in networking groups and events, they can be found almost everywhere. You may even get proactive and organize one yourself – if your community lacks a networking group. It’s a great way to get acquainted with like minded locals that share your entrepreneurial passion.
Keep in mind that networking is a two-way road. The relationships you build need to be mutually beneficial – you can’t expect to get all the help without offering anything in return. You will need to give back in order to reap the spoils of networking. .
Gather and measure
We live in the digital age where information and data are more valuable than gold. Having the ability to effectively collect and interpret consumer information amplifies the chances of your success.
Website heat maps, click-through rates, time spent on web pages, social media engagement, past customer purchases, and many other metrics can be gathered and can be analyzed. This data can not only help you develop a more attuned customer experience, but help forecast future consumer behavior.
The decisions you make that will ultimately decide the fate of your enterprise need to be backed up by data. Data driven decision making! How great is that?
Managing all the data is not always easy, so settle on a few key metrics you want to focus on. A little bit of tunnel vision in this regard can keep you from getting overwhelmed with information which may cause more harm than good.
For better or for worse – whether you’re taking off quickly, or are incurring losses, you need to stay level-headed and composed. More trouble can only arise when emotion takes hold of the decision making process.
Be ready to consider all possible alternatives when making a decisive choice. Events can unfold rather quickly that could necessitate swift resolutions – think rationally and avoid bringing emotion into this.
Organization skills are invaluable to have as an entrepreneur. With so much going on, and so many people to communicate with and documents to deal with and meetings to attend to – and all other business related matters will test your organizational skills. As you get bigger, more gears will need to be turning to get your machine moving.
If you haven’t already, get organized as soon as possible. You want to create a ergonomic work flow for yourself and everyone involved.
Consider getting a mentor
Getting a more seasoned individual involved can also improve the survival rate of your business. What I mean by this is getting some entrepreneurial help from a mentor who’s been in your shoes before.
The first year of business comes with a lot of unknowns; things you may not have had the chance to encounter. Reading on how to solve problems may not always lead to concrete answers -someone offering guidance, leading by example can be your salvation.
Having an individual by your side who braved these waters prior is an incredible asset to have. They may endow you with their experiences, knowledge and connections that will make conquering your first year of business a breeze.
Conferences and various aforementioned networking events are a great way to meet a potential business mentor. Don’t be shy, go talk with seasoned entrepreneurs and see if they will lend you a hand.
It’s up to you now
The ball is in your court. Use the first year to build good entrepreneurial habits and a solid foundation for your business. Consider the information I have disclosed here today, it may bolster your venture so it continues to thrive for many more years to come.