First Year Fears: Getting Through Your First Year in Business
Creating a successful business is no mean feat, and getting through your first year can be particularly tricky. There are lots of pitfalls that can trip up an entrepreneur, especially if this is your first venture. You have to deal with everything from sourcing stock or materials, warehousing, transportation, marketing, insurances, recruiting and employees, your app and website and so much more. At the end of it, you need to be turning a profit and keeping both your workforce and your employees happy. It’s a lot to take on, but if you can get through that first year you maximise your chances of success. If you’re a new business first starting out or are getting ready to launch, here are a few ideas
Even if you have plans of becoming a big business, starting small can be a smart move. You could begin by running your business from home, or by renting a small office with the minimum number of employees needed. This gives you a chance to ensure your business model works, and that people are buying what you have to sell. You can make tweaks to your marketing, website, products and more and it will be much easier when you’re not dealing with thousands of products, lots of employees and much more. You can let it grow organically and don’t need to sink all of the cash you have into it. That way you don’t risk losing the lot if things don’t do as well as you thought. Other ways to keep your business small is by renting instead of buying. From your premises to your equipment, that way you don’t have large upfront costs to deal with and don’t have to worry about selling (and potentially making a loss) if your business doesn’t work out. As things go along you could always save and buy, but to start with keep it small and avoid forking out too much cash.
Think About Health and Safety
Health and safety can be a minefield as a business owner. Something as simple as a slip on wet floor, a trip on loose carpet or a fall down stairs that haven’t been properly marked could lead to a finger being pointed at you. If your staff aren’t properly trained or something goes wrong, you could end up with a lawsuit on your hands which could bankrupt you and be the end of your business. Your first step would be to get liability insurance, this would protect you just in case the worst were to happen. You need to make sure you and your staff are properly trained and certified, it could be training to get your OSHA card if you work in construction or a food hygiene certificate if you work with food for example. One small mistake could mean big trouble for your business, and so health and safety needs to be followed to the letter.
You might be under the impression that it’s bigger and far more established companies who outsource, rather than bootstrapped startups like yourself. However, it can actually be an excellent way to go about things when you don’t have much money upfront. You will have to pay the third party company, however it means you don’t have to pay and hire additional workers yourself, or buy as much equipment. You don’t even need to source materials since this will all be taken care of. Outsourcing can save you money on things like recruiting and training, which is a good saving as these can be expensive. Later down the line you always have the option to bring some of these departments in-house if you wanted to, but in the first year outsourcing is a great way to get tasks done to a high standard.
Budget Your Money Carefully
In regards to your business finances, it’s very important that your money is in order. You need to make sure that exactly the right amount is being spent in each area, and that you aren’t overspending. This can lead to a slippery slope of debt and trouble which could land you with fines, penalties and bankruptcy. You could either use business budgeting software, there are lots of different programs on the market. Or as mentioned about you could go down the outsourcing route and let a professional company take care of this for you. That way you can ensure everything is completely accurate and there are no discrepancies. Not only do you risk going bust if not, but come tax time you could end up in serious trouble if your finances are recorded wrong. If the government believes your tax has purposely been handled wrongly and you’ve not paid enough, you could be fined or even sent to prison.
Search For Investors
Money is one of the most difficult elements to get right as a startup business, but if you have a promising idea but just need cash to get started then one option would be to pitch to investors. If they like your idea, they will help you with the money you need to get started, along with valuable advice. In return, they get a percentage of your business and earn this back each year as you make a profit. Giving up a share of your company can seem like a big risk, however for the cash needed to start up and the advice they can provide you (investors are usually successful business people) it’s almost always worth it. This can be why starting small is a good option, if you can prove on a small scale that your business works and you’re making sales, then this can give investors the information they need. There’s fierce competition for this kind of help, so you need to be able to stand out.
Once you make it through your first year of business, you increase your chances dramatically of going on to be a success. Be careful and methodical and utilise all of the help you can get.
What advice would you give to a bootstrapped startup in their first year?