The first year for any business is an exciting time and full of promise – but let’s face it – it’s also absolutely terrifying.
The US Small Business Administration (SBA) states that ‘about half of all new establishments survive 5 years or more’ and about ‘one third survive 10 years or more’.
Given these 50/50 statistics it’s not surprising that many entrepreneurs set out with failure on the brain.
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However, it’s vital to have the right frame of mind and set your business goals for success. Here are our top tips for survival in your first year in business:
Preparation is everything
So you’ve made the decision – you want to become an entrepreneur. But what now?
Make sure you have a rock-solid business plan in place before you leave your current employment. Many budding entrepreneurs leave their jobs and aren’t fully prepared; starting day one of entrepreneurship with a vague plan and an enthusiastic, but flawed, business pitch.
It may sound obvious, but make sure that you don’t quit what you’re doing before you know exactly what you want to do – and how you are going to do it.
Set your goals
A detailed business plan is one of the most important elements to starting and running a business; enabling you to establish your vision and define your key aims.
The problems you may encounter along the way will allow you to assess your business model, structure your finances efficiently and target your audience.
One of the biggest mistakes a business owner can make is only planning only for the short term. Creating a long term business plan safeguards you; making sure that you don’t lose sight of your ultimate goals.
A well implemented business plan will work as a measure of your future success, as it can be referred to frequently in order to monitor your performance and help you to stay on track.
Manage your finances
One of the main reasons businesses fail in their first year is poor financial management. So it makes sense to keep your costs low until you are more established and have gained confidence.
Make sure you cut any unnecessary or excessive costs. Think about what you need rather than what your ideal business would have:
How much space do you actually require?
Who you actually need to employ?
Does your business really warrant the latest equipment/software on the market?
A business is unlikely to generate a profit in its first year, therefore it makes sense to focus on cash flow projections.
Forecast your finances and make sure that you look at the expenses and overheads such as salaries, rent, dividends, tax etc.
In calculating these costs, you should come up with an approximate amount you may have to further grow the business or, conversely, the amount you may have to make up through external funding / other sources.
Build a customer network
First of all focus on your customer; they are the driving force behind your business and without them you won’t exist.
The customer’s feedback is vital for your progress so make sure you follow up any queries and suggestions.
Establish the best marketing platforms for you and your customer demographic. Marketing can be expensive and in your first year it’s crucial to choose the correct platforms (not only to drive traffic but also make sure your money is being spent in the right place).
The more people you know the better – anyone is a potential customer and networking is the cheapest form of marketing your business. Don’t be afraid to reach out to people to increase your opportunities.
Keep up to date
Advances in the tech world have opened up a whole new world of opportunities and it’s never been easier to set up and run a business.
Social media is vital to marketing your business – it’s free, easy to use and every tweet or status could generate a sale.
And there are now plenty of low cost or free apps to help you manage your time effectively and analyse your business processes and customer information. With post scheduling, contact management and analytics apps to name a few it’s now quicker than ever to get organised.
Don’t be afraid to make mistakes
Believe it or not, mistakes are a valuable part of the entrepreneurial process and play an important part in the growth and success of your business.
Try and see these errors as opportunities to trial new procedures and use the experience to improve.
All new business owners will falter in some way in their first year – but this is a vital part of the journey to success. The survivors are always the ones who learn quickly, see obstacles as challenges…and even failure as an opportunity to start again with a wiser head on their shoulders.
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