Making the leap from employee to entrepreneur can be both exciting and terrifying. Your first year in a new business can be tough and full of ups and downs. The more you plan for all eventualities, the easier it will be to problem solve, grow, and continue on your path to success.
Create a Business Plan
If you’re not looking for an investor or a bank loan, it can be tempting to skip creating a business plan altogether. However, this process is a crucial step when it comes to honing your vision.
Although you probably don’t need to create a 100-page document, your plan should be detailed enough to answer important questions about your target market and business model. For instance:
What problem are you aiming to solve?
Whose lives are you trying to improve?
What’s your timeframe for launch, sales, and profitability?
Keep Costs as Low as Possible
Running out of money is one the main reasons new businesses fail, so it’s best to keep your expenses as low as possible until sales start coming in. You can do this by outsourcing work to contractors or freelancers, forgo renting an office for as long as you can, and only spend money on things you really need.
This may sound very straightforward, but it’s amazing how much you can end up spending on things you think a business should have, rather than what you need.
Reinvest Your Profits
One of the hardest things about launching your own company is giving up the stability of a regular paycheck. But in order for your business to grow, the first money you make should be reinvested back into the company to expand your products or services and invest in marketing.
During the first year, owners are often the last to be paid, so it’s best to have a healthy amount of savings to lean on before you quit your day job.
Hyperactivity vs. Productivity
Although it can be tempting to say yes to every customer request, event, or partnership during your first year, being busy all the time may actually hinder your company from moving forward.
Try to be selective about how you spend your time and valuable resources, and ensure the decisions you make fit in with your overall game plan and initial business strategy.
Just because you’ve launched your own business doesn’t mean you have to deal with everything alone. Reaching out to people who have started their own business or to other professionals in your field is a great way to build a network that can offer support and opportunities down the line.
Generally, the more people you know, the better. You never know who could be your next potential partner, customer, or source of inspiration, so check out your local networking events and get to know more people.
Keep an Eye on the Numbers
As resources are probably tight, you need to ensure your time and money are being spent in the right places. Assuming you know what’s going on in your business without backing it up with numbers is a critical mistake, and one which often leads to failure.
Although it’s easy to get overwhelmed by analytics, you can start by selecting 2 to 4 key metrics that you keep track of on a regular basis. For instance, your gross profit percentage for each product, your website traffic, lead conversions, etc…
If something doesn’t seem to be working, don’t be afraid to adapt your business plan to offer what your target audience really needs.
Talk to your spouse or partner about the effects that running a new venture may have on your relationship. If you both understand that business is unpredictable, it will be easier to handle problems further down the line.
Time management is also key to maintain healthy, strong relationships (with both family and friends). It’s easy to devote all your time to your new business and neglect those around you, so try to prioritize your tasks and allow enough down time to spend quality time with those closest to you.
Give it Time
Many new entrepreneurs set their goals for the first year and hope to profitable by the end of it. If they aren’t, it’s often the end of the line. But in reality, many new ventures require 18 to 24 months to get off the ground.
Taking this into consideration from the beginning can help you plan accordingly and go well beyond the one year mark.
The Bottom Line
The first year in a new business can be stressful, rewarding, a rollercoaster full of highs and lows. The good news is that statistically, more small businesses succeed than fail in their first year. The key is to make a plan, spend conservatively, measure your results, and keep adapting to grow your business and drive valuable results.
About The Author: Callum Mundine is the head of marketing at Warble Media – a website design and marketing agency. They are based in Dubbo, NSW, Australia. He is passionate about helping local small businesses thrive online.
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