What You Should Learn in Your First Year of Business

By Jamie Mercer

AlexanderStein / Pixabay

When it comes to the idea of running your own business, nothing is as daunting as the prospect of what the first 12 months will bring. Often considered the hardest time for any startup, a lot of work has to go into really establishing who you are, what you can offer, how your product or service can make people’s lives better, and why they should trust you.

For over 20 years, the statistics about new businesses have remained pretty much the same: roughly eight out of every 10 business don’t survive past their first year. That’s not a statistic to put you off, but more to emphasize that you’re not expected to get it completely right on your first go – few people do! However, there are some things you can do to help you in your first 12-months to give you a fighting chance at surviving your first year of business. Here are some things you should learn on your journey.

The importance of a business plan

I know, I know. You’d think that everyone starting a business would have thought of this but you would be surprised how many people start their business ventures without a plan in place – especially if they don’t require additional investment or a bank loan to get off the ground.

The very act of writing a business plan allows you to really outline your vision for your business. What issue are you trying to solve, whose lives will be better off, how are people going to find out about you and why should they care?

You don’t need hundreds of pages, but having a detailed plan with realistic time frames, sales and profitability forecasts is vital. Speak with business owners in your niche who don’t operate in the same geographical region as you are planning to and ask them about how they got started and what early issues or successes they encountered. Because you won’t be operating in the same market, these businesses might not see you as a threat and might actually be keen to help you out.

Managing your expenses

One of the biggest hurdles is managing your finances for your business and prioritizing where your money is going to go. New businesses usually fail because there’s no money left.

Some basic advice to consider is to keep your personal and business expenses separate. This can get tricky, especially when you ask whether taking a potential client out for a coffee is a personal expense or a business one. Work out what constitutes as a businesses expense and what is just a personal expense and stick to it.

Keep your receipts and invoices (label them for extra measure if they’re not stored digitally) for your end of year taxes and get a separate bank account for your business and be strict about using that and its associated credit card(s) rather than your own personal ones. Accounting software can make this easier.

Attend industry-specific events

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Source:: Business 2 Community

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