Survive Your First Year of Business With These Steps
According to the US Bureau of Labor, roughly 50% of all businesses survive at least five years. This may not seem like the most encouraging statistic, but if you sit around and listen to the horror stories of failed businesses, you might begin to believe that startups are billed for failure before they begin.
This doesn’t have to be the case. Check out our tips for surviving your first year of business… and hopefully they take you to year five and beyond.
Spend Only What You Need
Many businesses end up failing because they run out of money. In fact, this is probably the primary reason why businesses fail, no matter what their market is. In order to prevent this, save money wherever you can. You don’t need to hire full-time employees to start out with; consider contracting, instead. In many cases, particularly in the digital world, you can forgo an office for quite a long while. Save on those expenses and your company will thrive.
Reinvest, Reinvest, Reinvest
Particularly if you are giving up the security of a regular paycheck to start your dream business, you may be tempted to take a bit more profit than you should, particularly in the first year. But if you want your business to grow, it’s important to ensure that there’s a large enough cash flow. Pay your business first and yourself last.
Network Like Your Life Depends On It
Your life (at least your business life) may very well. Startups need to band together and work together in order to survive and thrive. Consider becoming part of the local Chamber of Commerce and see if there are any groups tailored to your demographic (for instance, there are many special groups for women entrepreneurs) for support.
Be Patient
Many people believe that if a business hasn’t made profit within the first year, it’s a doomed enterprise. The reality is that for most startups this is not the case. Many times a business will need 2-3 years before producing profit on the regular. Being patient is a key to success with any entrepreneurial vision. Make sure that you don’t throw out a winning idea or concept due to impatience.
No matter what kind of business you are running, make sure that you keep your goals in mind. Any decision that you make should be grounded in numbers, so keep track of your profit metrics and refer back to your business plan (you have one of those, right?) to ensure success.
