According to numerous surveys, about 95 percent of all businesses fail within the first five years of their existence. A massive portion of them fails during their first year or, in this period, commits a grievous mistake that comes to haunt them later on.
Therefore, your first year as a business is vital for both survival and prosperity of your company. So, here are several tips on what you should do during your first year as an entrepreneur.
Start with a business plan
In order to set your company on the right path, you need to write a proper business plan. Here, you need to describe your business, include your market analysis and thoroughly explain your organizational structure, as well as specify the role of management in your company.
After this, you need an elaborate rundown on your product and services, as well as a holistic marketing and sales strategy. Once you have this figured out, you will be, more or less, set. For those who’ve never done this before, there are a lot of great templates online for you to look into.
Decide on your company’s structure
The decision on your company’s structure is a factor that determines the scheme by which you are paying your taxes. For instance, sole proprietorship pays taxes differently than a partnership. Then again, an LLC (limited liability company) has its own rules to adhere to. Either way, this is one of the first accounting issues that you need to settle.
Separate your books
People behind sole proprietorship, especially if it is a one-person startup or a home-based small business, seldom see the reason to separate their personal accounts from their corporate ones. However, this could make it quite difficult to figure out which of your expenses could be listed as deductibles.
In a situation where you’re running your company from home, you might be eligible to deduct a part of your utility bill as a cost of running a business. Furthermore, once your company starts growing, you might have a harder time separating the books in order to bring in partners or investors.
Figure out your marketing
In the present-day world, the success of your marketing campaign is almost a synonymous with the success of your company. Therefore, you need to choose all those means that are bound to give you the greatest ROI.
Social media marketing, email marketing and SEO are the very least you should add to your arsenal, yet, you cannot afford to focus on the digital marketing alone. As for the traditional methods, the most cost-efficient are promotional materials like corporate hats, t-shirts or high-quality custom pens with the logo of your company on them.
Create another stream of revenue
Another problem with small businesses is that people get in too much debt or sell an important asset just in order to launch. What they fail to realize is that their company might not become profitable for at least six months (perhaps even two years). Therefore, they need to find a way to improve their cash flow in another way. The simplest choice is to create an additional stream of revenue.
If your company doesn’t require your attention for most of the time, you can keep your day-job at least for a while. If not this, you could take a roommate, rent out a property or start freelancing online.
Devise a pricing strategy
When it comes to your prices, which is one of the most important factors of your success, you might find it more convenient to devise a strategy, rather than to just set a price and forget about it. If you make an estimate that there are a lot of untapped markets, you could start with a bit higher price and then gradually reduce over the course of the year.
In this way, you will get a new demographic to focus on as soon as you milk out enough money out of the current one. On the other hand, if your finances can withstand this, you could start with a low price to root out your competitors and then dictate the increase later on.
Prepare for the unexpected
Finally, no amount of preparation can ever get you ready for the actual business world. Therefore, you shouldn’t be afraid to adjust on the go. This is also why so many young companies try to diversify their offer in order to see what works the best for their audience. Needless to say, this could also give you a much easier way of pivoting your company, in the worst-case scenario.
Handling just these seven aspects of your business can ensure that you have much greater odds of pulling through your first year as a business without causing a serious mistake. Moreover, this kind of preparation stage lays down the infrastructure for future growth of your business and in this way makes it more scalable.
In other words, you will worth a bit harder in order to eliminate small problems in their root and in this way prevent them from ever becoming a major issue. This kind of long-term strategy is one of the most important traits of successful people.
Identity Magazine is all about guiding women to discover their powers of Self-Acceptance, Appreciation, and Personal Achievement. We ask that every contributor and expert answer the Identity 5 questions in keeping with our theme. Their answers can be random and in the moment or they can be aligned with the current article they have written. In that way, and as a team, we hope to encourage and motivate each other, thus inspiring you to Get All A’s.
1. What have you accepted within your life, physically and/or mentally? Additionally, what are you still working on accepting? Now, we’re talking about resignation, rather stepping into, embraced, and owned.
I’m sure many can relate…the challenges of being a single working mom—an entrepreneur.
2. What have you learned to appreciate about yourself and/or within your life, physically and mentally? On the other hand OR in contrast, are there elements of who you are that you’re still working on appreciating?
I really appreciate the freedom my work allows me. Being able to stay at home when necessary, travel and communicate with people from different backgrounds.
3. What is one of your most rewarding achievements in life? Tell us not only what makes YOU most proud but also share the goals and dreams that you still have.
Definitely building my career and raising my kids.
4. Of course, we all have imperfections, or so we think. In truth, we are all perfectly imperfect. What are your not-so-perfect ways? Likewise, what imperfections and quirks create who you are—your Identity?
My Perfectionism and stubbornness for sure.
5. “I Love My…” is an outlet for you to appreciate and express all the positive traits that make you…well…YOU! In fact, sharing what you love about yourself will make you smile, feel empowered, and uplift your spirit and soul. (We assure you!) Therefore, Identity challenges you to complete the phrase “I Love My…?”
I’m lucky and I Love my life as a mom and an entrepreneur.