Surviving your first year in business isn't a piece of cake. The first couple of years are not very rewarding for small businesses in terms of profit, that is assuming that they make any profit at all. Sooner or later, your business will require an investment so that it can grow by expanding the range of services and products it offers, venturing into new areas and establishing itself in hitherto untapped territories, or even hiring people to help you function better.
It is important to understand at the very outset that you can’t expect any profits or returns without first investing some capital in your business. Basically, you must keep in mind the saying – “No pain, no gain”.
So, it is highly advised that your bank balance reflects at least a year’s worth of money before you leave your job to start your own independent business. Also, it is recommended that you raise the required capital before the official launch of the business if personally funding and financing your business is not a part of your plan.
1. It Pays to be a Person with a Plan
It would be extremely reckless to hurtle head first into business without having charting out a clear path in a certain direction first. It is imperative to formulate a business plan that has the strength to take you through the first year of your business while also having the ability to adapt itself to circumstances and change accordingly. In other words, it must be strong and flexible and not rigid.
It is important to remember that in business, as in life, things are wrought with uncertainties.
You might have to take on a big project, your equipment could get damaged; there’s no end to the things that could go wrong, and as the business owner you must be well-prepared to take on anything that comes your way. You don’t require to develop a 100-page doc, but your business plan should be effectively detailed to determine if you have a perfect target market and business model.
2. Manage Your Finances
When gearing up to launch your own company, it is imperative that you know the cost of starting a business. The rule of thumb is to add up the cost estimated total expenditure and then to double that number. You must include the costs of supplies, rent, business registration, wages, etc. It is essential to understand that you must hire individuals you desperately require, use freelancers or contractors for the rest. And, in general, spend your expenses only on the services and products that you require, not the things you think business must have.
3. Avoid Trouble on the Home Front By Being Honest About Your Business
You need all the support you can get when starting your own business, which is why it is extremely important, to be honest with your family and keep them in the loop. For instance, you must inform your spouse or partner that you might have to rely on their income until your business takes off and approaches some level of stability before you quit your job.
4. Keep In Mind That Profits Are Taxable
Making money and earning profits is something, you should be proud of, without a doubt. However, you must not forget that for any profits that you make, you will be required to pay taxes accordingly, to the government.
5. Take Care of Personal Finances
Like most business owners you might work for free, or at most, a small salary before your business takes off and is firmly established, you must not forget to take into account your personal expenses outside of your business expenditure, and cater for the same accordingly.
6. Create a Customer-friendly Brand
You can’t make sales without any customers, the same way you can’t make an omelet without cracking an egg. Thus, to build a customer or client base, you must create a brand that prioritizes the needs of your customers above everything else. People will be more willing to buy from you if your brand’s message and values align with their own, and they are able to identify and relate to your brand, what you stand for, and what you are selling.
7. Build a network
Every business requires a network of people to handle its numerous facets. You need lawyers to help out with legal matters, insurance agents to inform you of the kinds of coverage you need and third party recruiters to help you develop sourcing strategies seeking out the employees you need. Thus, it is important that you build a network and forge relationships with people who can help your business take off.
8. Embrace Digitisation
Automation is not all bad. In fact, automating certain tasks like accounting will improve the accuracy of your calculations and the credibility of your books.
9. Keep Track of Your Progress
Recording data and using metrics on a spreadsheet or even using a software program will help you understand how well your business is doing by measuring your progress.
10. Reinvest in your business
A mistake that a lot of newbies tend to make is not reinvesting in their companies. You need to remember that your business won’t grow unless you reinvest at least half of what you have earned back into your business.
11. Be Ready with Your Elevator Pitch
Pitching your company to potential customers and partners is essential to make sure that your business gets established. However, as detailed and well-thought-out as your plan might be, you’ll most likely have to keep it short and crisp to make an impact and capture their attention. Your elevator pitch should, thus, embody the basic essence of your brand and what it stands for.
12. Your Logo is Your Brand’s Identity
Your brand’s logo is its identity and tells your story. It must embody the character and personality of what your brand stands for and evoke a certain emotion in people so that they associate your logo with your brand and realize how your values align with theirs.
13. Customers Should be able to Relate to Your Website
Your website must be engaging so as to encourage customers to patronize your business. A well-designed website also increases your brand’s credibility by enhancing transparency with regard to your operations and providing information to your customers.
14. Stress on the Press
The importance of press coverage for a foundling business can’t be stressed enough. Press will help you increase awareness about your brand and what you have to offer.
15. Social Media is Your BFF
Embrace social media and all the advantages it offers, such as cost effective brand promotion, and advertising. It is the best way to reach the greatest number of people in the shortest amount of time.
16. Pay Special Attention to Your Email List
Setting up a marketing campaign that relies on your email listings is another very cost-effective means of promoting your business. It’s a phased approach that will gradually help you build a bigger client base while also giving a sense of exclusivity to the customer.
17. Health is Wealth
Setting up a new business can be pretty hectic but you should take care not to work yourself to the bone and let it take a toll on your health. After all, you’re the pivot around which your business revolves and if you suffer, your business will too.
18. Hyperactivity Does Not Equal Productivity
“Too many cooks spoil the broth”- This saying holds true in business as well. Horizontal growth, meaning more partners or investors, need not necessarily result in the forward growth of your business. Don’t go after every opportunity that comes your way. Pick and choose what is right for you. During the initial years of your business, you require to be very choosy in how you spend your resources and time. When considering each marketing or even initiative, think about how it fits into the overall game strategy.
19. Perseverance is the Name of the Game
Many businesses give up too early, in the sense that if they find that their business hasn’t taken off in a year’s time, they shut shop. However, you have to realize that there is no fixed time period for such things and the many variables in business could end up in it taking longer for your business to get established, so, don’t lose heart and persevere, and who knows, you might be pleasantly surprised that you held out for just a little longer.
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