If you are starting a new business and planning to be successful in the first year of business, it is important to have realistic expectations. You may get lucky enough to have another company, possibly a major corporation buy your business in your first year, but for most, there is a lot of hard work involved.
Very few businesses actually make a huge profit in their first year and not all are successful. Businesses grow by selling products, services, and expanding into new areas that are often not dominated by the mainstream market. Unfortunately, if you build it, they will not come immediately, because they don’t actually know you exist. You are a like a needle in a haystack with lots of competition, and if they are not buying your products, they are likely already buying from your competitors.
With a majority of businesses failing within their first year, here are a few tips to lean you for success in your first year of business.
1. Write A Business Plan
Before you start anything, you should outline a business plan. List all steps and processes involved to help you understand your vision for your company. Writing out a business plan allows you to envision things happening before you have done anything. If you have any doubts about anything, than research what you might be confused about in order to resolve your hesitancies.
There are many cost-effective solutions to help you start your business. Of course, you will save the most money by doing everything yourself, but there are many online organizations that ask you to submit your business information. They will do all the work for you, including registering your business, establishing an LLC or other type of business, and ensuring that you get your EIN from the IRS (if you live in the United States).
Your business plan should also explain the type of problems you are trying to solve, how you solve these problems, how much it costs to solve this problem, and how you are going to profit. You will also want to establish the type of audience you will need to target, including age group, location, gender, and any additional information that may help you. The reason for doing this is for marketing purposes at a later time, in which you may need to pay for advertising and reach a specific group.
Finally, you will want to establish two timelines. A generous one and a realistic one. The generous timeline is where everything goes right, you set prices, everything gets shipped on time, you even order at your envisioned price, you have a set amount of customers buying each day, you make amazing profits, meet deadlines, and you do amazing your first year.
The second timeline is your realistic timeline: the one where things go wrong. Not all the time and not everyday, but you have to understand what failure may start to look like. In this timeline, things were a bit more expensive than you thought or the bank loan did not go through. Your ideal number of customers is much lower than you expected. While you are profiting, you are also losing money as well, you might miss a deadline here and there, and for your first year, you realistically just did “okay”, meaning you are not going to brag about it and despite your hard work, there isn’t a whole lot to show for it.
These two timelines will help you be optimistic because what is life without optimism? Things can go very well. However, reality needs to be taken into account too, where losses are likely to be imminent. At least when you take everything into account in your business plan, you will have a head start on what to do should reality take a turn for the worst.
2. Cut Corners For Savings
You might think this is terrible advice because cutting corners often implies that you are cheating or trying to make things easier for yourself without putting the hard work in. In fact, quite the contrary, you will want to work hard so that you can cut corners. For example, if you are ordering from a company who is charging you a set price, but they have offered you a discount for ordering a great amount: than order the great amount.
You will only do this once if you see your product as being successful. Trying to work out deals with other companies to keep providing them with business so you can also stay in business will help you in the long run.
When it comes to hiring people, you will want to only hire people you need. Look for freelancers, contractors, or short-time employees. Only keep full-time employees where necessary. You can also save money and time by having your employees work remotely, while also tracking their times. If you feel that an office will be best for you and your employees to work, than don’t buy what you think an office needs, instead, buy what is absolutely necessary. There are plenty of online businesses that cater specifically to companies like yours and will sell you furniture and other equipment for cheaper, including refurbished and recycled.
3. Reinvest In The Company
It is unlikely you will be paid a whole lot in your first year of business. If you are making any money, it probably means you’re doing wonderful. If you aren’t, it probably just means you’re on track and need to work harder. Any money you make in your first year needs to be reinvested back in the business.
It should be invested in making your business more efficient, either through ordering products or services at a discounted rate, hiring freelancers or contractors for a multi-contract, or even in the education and training of your own employees. More specifically, the most important investment you will make in your first year of business is the time you take to document your business practices.
After your first year, you will want to examine what you feel is efficient and what you feel is costing the business more than it is worth.
4. Time Is Money, Creativity Is Productivity
During the first year, you need to be very selective in how you spend your time and resources. Whether it is coming up with new ideas, taking on new or existing challenges, or making existing processes more efficient. Often times, startups may get stuck in a loop, focusing on trying to solve a single problem, rather than looking at whole solutions.
You cannot possibly agree to every request that comes your way and please everyone, but you can take note of the most common requests. When considering each customer request, event, marketing, or partnership opportunity, think about how it can be measured into the overall business routine. When you keep making a note of where you are, where you are supposed to be, and where you want to be, you will be able to remain focused on the where the whole picture of the business should be.
5. Focus On The Customer
When you build something that people actually need and want, sales will ultimately follow. Keeping in touch with customers from the moment they sign up, understanding how they are feeling after their first week, and continually following up, even once a month or every few months, could make all the difference in knowing how you are actually doing. Your customers will definitely let you know if you just ask them.
You can usually determine this by waiting and examining your churn rate or you can take a proactive stance and email them or provide a feedback form within their user account, actively replying and letting them know you are taking their concerns into consideration.
Your customers are your priority and checking in with them every so often, even offering coupon codes at random times for taking surveys or just filling out feedback could definitely build loyalty and a positive attitude towards your business.
6. Establish A Network
As mentioned earlier, the longer you are in business, the more likely it is you will establish good and sometimes even bad relationship with people and organizations. For the good, you may be able to get a discount for being loyal or purchasing in bulk. They may put in a good work or help promote you, such as sending a celebrity a product of yours or doing them a service and having them do some “mentioning” of your business can go a long way.
There is also the bad, in which you may burn a bridge. If you can avoid this, you should do so at all costs. However, sometimes there’s just no getting around upsetting or angering someone within your network. Once you are unable to repair a damaged relationship, it may no longer be revived.
It is important to remember that in order to be the most successful in business, it is often not what you know, but rather who you know. Whether you need to grab a business card or write down notes on how a person or company can benefit your business, it would be wise to establish lasting relationships and offer something in return in your B2B relationship.
7. Business For The Future
Always be honest with yourself and your employees. If the company is lacking something or you feel the company can do better, than don’t hesitate to start communication or a meeting with your employees. Never badmouth your employees to another employee. Rather, if there is something that needs to be discussed, directly address the employee without concerning others.
Don’t cut corners by cheating or taking the easy way out, but cut corners if it means you can save money by not buying everything you feel you should have in your first year of business. The future of your business lies in the practices of what you do today.
All of the above points may lead you to be successful in your first year of business if you apply them correctly. You should follow your business plan and test your ideas. Quarterly, you should focus on what is going right and work on where you feel the weaknesses of your business are occurring. To be successful requires a lot of hard work, patience, and goal-oriented visions. While it may seem overwhelming at first, once you establish a routine, an honest sincerity and belief in what you are doing, and put on a friendly face, you’re more than likely to get somewhere! Good luck in your first year of business!