How To Survive Your First Year As a Business Owner

collaborative post // The first year of operation can be very tumultuous for many new business owners. Statistics show that approximately 20% of small businesses fail within their first 12 months of operating. Several factors could account for that, from an inability to break even and low returns to lack of funds and poor management.

However, avoiding these issues may seem impossible for a new business owner. Fortunately, so many businesses have survived their first year, and so can you! So, what steps can you take to ensure your business grows past its first year if you’re starting a business? The following tips should help.

Ask for expert advice

The first year in business is tough. Therefore, it helps to have trusted and experienced mentors or advisors on board. These experts bring a new perspective, more resources, experience, and fresh network opportunities. Different experts or mentors can help various aspects of your new business, ensuring that you don’t make avoidable but costly business mistakes.

For example, you can have financial experts, product developers, experienced leaders, legal minds, etc. For instance, legal minds like Hunt & Hunt Lawyers can offer day-to-day legal support and strategic advice to help you manage issues and opportunities in your business.

But you can also benefit from the advice of experienced friends, family members, and loved ones who already run successful businesses. For example, you’re going to need to learn a lot about taxes and you’re going to need a company UTR number. You can apply for a utr number by phone before you seek out additional advice.

Have an accurate sense of your financial needs

Your business plan should give you a clear idea of how much you can expect to spend during your first 12 months in business. But there are always two major spending traps you’ll need to avoid – underspending and overspending. The main mistake that leads to overspending is a miscalculation of business expenditures.

Some new business owners also end up misjudging their costs, spending more than their budget allows as a result. And the main reason why many new business owners spend less is that they mistakenly assume that being frugal will give their business a chance of financial survival. 

An accurate sense of your business’s financial needs involves estimating the actual cost of funding your business in its first year. 

Engaging with your customers and clients

Customer engagement is an incredibly important factor to consider and work on if you are looking to help your chances of survival in your first year of owning a business. Customer engagement can happen both online, and in person, as well as full-on, and subconsciously. It all just depends on the type of business you own and the strategies you prefer.

For example, online engagement often focuses a lot on social media interactions and advertisements of one kind or another. These are both used to contact, promote, and attract both new and old customers to your business.

If you own a brick-and-mortar style shop, then you will regularly have customers on your premises. This makes face-to-face engagement a lot easier than if you were to own a purely online business.

However, this is not the only way in which you can keep your customers interested and engaged while they visit you. If you sell physical products then a technique that has been used for many years is to display said items in something like an acrylic display case for your customers to easily see, while at the same time keeping your products safe, and clean.

There are a lot of different ways in which you can actively engage with your target audience, but it is down to your judgement and research as to how you approach it. Will you be a go-getter that openly flaunts your products and services to all? Or will you take the path of subtlety showing how confident you are in your product or service, and let the quality of your brand do the rest?

Take enough time to rest

When starting a new business, waves after waves of responsibilities can sweep you into overworking yourself. You need to put in maximum effort for your new business, granted.

But there’s almost a thin line between maximum effort and overworking yourself. And unfortunately, many business owners cross that in their first year, breaking down early. Not only is overworking yourself detrimental to your health, but some studies show that it can also lower your productivity significantly. 

So, regardless of your new business’s demand, take time out to rest. Get at least seven to eight hours of sleep each night, take proactive breaks and day-offs, and try meditating for about ten minutes each day. 

Focus on excellent customer service

Your customers will keep your business thriving. Some surveys have indicated that most businesses that survived their first year and beyond did so because they had a loyal base of satisfied returning customers. Your ability to adapt your products and services to suit your client’s needs is a proven way to not gain new customers but keep the ones you already have returning.

And with your customer base growing, you can expect your income stream to continue flowing, reducing your chance of going out of business (at least, as far as having customers is concerned). 

Have a long-term plan

You need to make a commitment to keep your business thriving long-term and have a plan to back it. Decide that you want to stay in business for at least five years, and let the guide adopt all the plans and business strategies. Even the smallest business decisions should be able to fit into that long-term big picture.

Some partnerships and business opportunities may sound like good ideas short-term but could come back to stall your business growth. So, don’t look for opportunities for the sake of instant gratification. Have a long-term plan in mind and stick to it. 

Identify the right partners from the start

Unless you’re already financially secure, you’ll need some funders or financers to help you launch a successful business venture. Picking the right partners is important for two main reasons. One, working with too many partners can dilute your revenue, leaving you with less than your work deserves and confusing your business strategy in the process. And two, bringing in the wrong partners can easily destabilize your business.