You’ve taken the leap into the rough waters of small business ownership, beaming with the excitement of a new chapter in your life and the possible success of your idea. However, getting started is only the beginning. The first year of running a small business can be the hardest times any owner will have to endure. You must learn to stretch cash in creative ways to help you make it through that tough year. So, here are some suggestions you can take to make sure to survive that first year of small business ownership, and ready to take it to the next level.
Have a Solid Business Plan
First things first. If you’ve opted to skip a bank loan or an investor, make sure you have a clear idea and goal in mind for your small business. You need to develop a business plan so that you can be sure your idea is well planned out. While it’s good to have ideas circulating around in your head, putting it to paper can help you to organize your thoughts, create a solid objective and specific sales goals. Do your research and write a business plan that you’ll want to use it to run your business.
Keep Expenses Low
Making sure you don’t run out of money is a certain way to stay afloat. Keep the spending limited to things you absolutely need for the business. It is easy to get carried away and begin to buy various amenities you think you may need in the future, but let that decision be made when the time comes. Focus on the here and now. You can also save money on electricity by conserving the amount of energy you use. Make sure you shut down your computers each night. When it comes to hiring employees, hire only those positions which are unquestionably essential for the company, and stick to contractors and freelancers for everything else.
Review Your Finances Monthly
Your money may be stretched thin in the beginning, so taking the time every month to go over your expenses is a good idea. You want to review your financial statements to make sure your money is being spent in the right places. It is never safe to assume, whether in business or life, so make sure you know exactly what is happening with the finances in your business. It is much easier to stop a cash leak early on.
Know Your Customers
A quick way to go under in your first year is spending large amounts of money on unfocused and poorly-planned marketing campaigns. It is important that you understand who your target market is (something a business plan will also help you with), and that you start small. Research the most efficient and effective ways for you to spend money to reach your niche customer, and make sure you are measuring your results. Hopefully your sales gains will begin to outweigh your expenses.
As an entrepreneur, the more people you know, the better. Anyone you meet at any time is a potential customer or referral, so begin to ask your friends, family, former colleagues etc. for leads on people and businesses who might be interested in your product or service. You also want to attend 2-3 in person networking events a month to build your network. You can network online too via LinkedIn, Facebook, Twitter and Instagram. Joining your local industry association can also provide promising leads and strategic alliances as well. These trade groups also keep you up to date on new businesses that are popping up in the area and any new technology that might affect your business operations. Conducting a direct mail campaign to local businesses and residents in your community may be a good place to start for marketing to build a following.
Be Ready to Adapt
No matter how much you plan, there will always be new and unexpected twists thrown your way. It is best to keep an open mind and be willing to adjust your ideas and strategies with new intel. You never want to fall in love with your idea. It is extremely important to know when something within your business needs to change, that will ensure that you’re ready to make a change when it is needed.
Have a Back-up Plan
It’s always good to have a few options to fall back on if things take a turn for the worst. It is important to plan for success and not failure, but you do not want to find yourself in a situation where both you and your business have run out of money. Make sure you have funds in place to help in emergencies for your household. You need to be prepared to deal with anything that comes your way. In the end, make a commitment to your idea, but also make a commitment to support yourself and your family.
If you consider these steps and write a business plan that you use to run your business, use a budget and stick to it, review your financial statements monthly, get clear about your target customer and stay flexible, you might just survive your first year in business. I wish you the best of luck.
About the author:
Jayson Goetz is a strong believer that you don’t have to be wealthy to live a rich and full life and wants to share tips on how to do exactly this. Whether its saving money tips, smart business hacks, or budget travel, he hopes to inspire others to do more with less.