Many have claimed that the first year in business is a real test of survival. The first year shows whether you can survive the hardship and are able to hold the fort. A lot of small-business owners struggle when it comes to managing their business in the early stages. There’s so much to understand and learn. Business related tasks like accounting, managing stocks and liability, managing employees and completing a business tax return often happen in the early years or months of the business. Small business owners need experience and sufficient time to learn and implement these elements successfully.
Starting a business can be a stressful and a risky endeavor. But with proper planning and steps you can avoid business fails and take your business to the next level. The rule of thumb with regards to starting a business is to have one year of savings in your bank account to help sustain you before deciding to quit your full-time job. Mobilize your capital before you start building your business.
Here are five ideas you can follow to make sure you survive the first year of your business.
1. Have a Solid Business Plan
Always have a sturdy business plan in hand. Whether you’re applying for a business loan or plan to use part of your savings to open a business, always have a clear idea what you want and how your business is going to be. Sure, you can’t predict the future, but a well structured business plan goes a long way. A proper plan helps you determine marketing plans and tools needed to run your business efficiently, and the products and services you want to offer. A plan helps you make decisions and can give you more business ideas. So why not arm yourself with a solid business plan before deciding what to do with your business?
2. Manage Your Expenses
Make sure you have enough funds to stay afloat. Segregate your monthly budget for business expenses and non-business expenses. Create a bookkeeping system where you track all the expenses and don’t get too carried away buying unnecessary items for your business. Purchase only things that you will use now, not in the future. You can save money on utility bills by shutting down your computer when you leave the store and making full use of your space. Advertise your company on social media instead of printing pamphlets. When hiring an employee, hire only for positions which are essential for your company’s needs and stick to part-timers or contractors. Managing your expenses brings long-term benefits to your business.
3. Don’t Get Excited By Profits
Your business is booming, and you want to crack the champagne. But do not forget that you need to pay quarterly taxes to the government and your state on the profit you make. Keep aside the profits you received for taxes and marketing purposes to ensure sustainability.
4. Have A Back-up Plan
Never assume you know everything that’s going on in your business. Back everything up. It’s nice to have other options, a parachute, in case things don’t go as planned. Make sure you have sufficient funds to aid your business if it is facing money difficulties. You need to be prepared and stay committed to dealing with any obstacles. You have to make a commitment to your ideas but at the same time make a commitment to yourself and your family.
5. Be Honest With Your Family
If you have a career and decide to start a new venture, your family should know about it. Discuss the risks you’re about to face and how it’s important that you invest time and energy into the success of your business. In business, it’s important that you build relationships with your customers and employees, but it’s important to be fair with your loved ones too.
The biggest lesson to learn is that in the first year of a business, there will always be ups and downs. The first months of running your business are thrilling and exciting. You’ll get excited when you receive your first customer and it’s always a great feeling of achievement. Contrary to what some people believe, small businesses can succeed during the first year. If you’re ready, don’t be afraid to take a leap of faith but be organized in your time and money management and marketing plan. Measure achievement along the way in order to grow your business. I wish you the best of luck!