Surviving Your First Year Owning Your Own Business
You’ve probably heard the statistic that most new businesses fail their first year. However, the real statistic shows a much more optimistic number: only 20% of small businesses fail their first year, while 50% of small businesses fail by their 5th year. Despite the 80% chance of success, starting your business is still stressful. Here are four tips to help you survive your first year as a business owner:
1. Develop a business plan.
Writing a business plan is essential to launching your business. It may not feel necessary, especially if you don’t have investors to answer to, but it can help you build a strong foundation. Your business plan is a roadmap for growing your business, important benchmarks, and marketing strategy. You’ll also want to detail things such as launch dates, sales and profitability goals, and your target audience. Your plan should have enough detail to ensure you have a strong business model.
2. Keep your budget tight.
Most new businesses run out of money fast their first year, so take caution with how much you are spending that first year. Ideally, before you start your business, have a year’s worth of salary saved to give your business its best chance at a profit the first year. Hire only the staff you need, and bring on freelancers for any other project. As you bring in profits, utilize that income to invest back into your company, whether it’s the product itself, your marketing efforts, or any software or management tools.
3. Develop strong business relationships.
As the saying goes, it’s all about who you know. Whether or not that’s true, the more relationships you have in your industry, and the more business relationships you develop, the better overall. Consider anyone you meet as a good resource, a potential business partner, or a customer in your first year of business. As you build relationships, be respectful of people’s time and give support as much as you receive.
4. Give yourself more than a year.
If your first year draws to a close, and you do not see a profit, that doesn’t mean that you should shut down your business. Many businesses need more than a year to gain traction and see a profit. While every business launch comes with risk, surviving your first year is easier than you may think.
Launching your business is exciting and scary, but with the right mindset, resources, and business plan, you are sure to see yourself through that first year.
Need help with your business? Schedule a free consultation with us at Davis Thorpe and Associates, and we’ll help you address the challenges getting in your way.