Surviving the first year in business.

Given the statistics of businesses that fail one year into operations, the first year may likely be the most challenging for entrepreneurs. There is the reality of starting a business as opposed to the fantasy of a written business plan, the challenges of maintaining operations amidst global outbreak and the task of keeping cash flow positive despite setbacks amongst others. As challenging as surviving the first year in business could be however, it can be successful in the end.

Here are some tips to scale you through your first year in business:

Before Launch

Much of the downtime entrepreneurs experience in their first year could be avoided if certain factors were put in place prior to launching their businesses. One of such factors is measuring the viability of a business idea. Everyone knows that businesses are about providing solutions to problems. However, how do you ascertain if the problem you intend to solve with your business exists in the first place? For example, If you would measure the viability of a food business idea, you may need to answer such questions as what the food service needs of your potential customers are in relation to what you have to offer and how you want to offer it. Be sure your business will solve an existing problem in the best, simplest and most affordable way available.

Build Clientele

More customers means more revenue. More revenue increases your survival chances in your first year in business. Often, entrepreneurs get more concerned with their product or service than their customers. If your food service business were serving students, for example, the most basic concern should not be to add more fancy to your product and service. It should rather be to provide good meals at very affordable prices. The more customer conscious you are, the better you get at serving them; hence, build your clientele.

Be Finance Smart

Many businesses do not generate profits in their first years. If they do, they often do not generate enough to self fund their operations during the first year. An entrepreneur should, hence, be aware of various funding options available to take advantage of to keep operations running in the first year; from savings to grants to approaching investors. Also, you should be in the know of your company’s burn rate and runway. This will help you make timely financial decisions as well as increasing your chances with investors.

Be Open to Change

When starting a business with a great business plan and a model to guide your operations, you often think you have everything perfectly set out until business really starts. The first year will usually present itself with surprises that may require you to adjust those plans if you intend to survive. Being open to change infers incorporating modifications to set out plans from time to time as the need arises. It does not imply you are weak and unstable as an entrepreneur it rather shows you are constantly informed about the latest development with your target market. Often ask yourself, ‘is this business model still profitable to keep cash flow positive?’

Be Courteous

Businesses in their first year should leverage every marketing channel available. Referrals are one of such channels especially considering the development in the digital world where an individual could have the whole world as an audience. Your survival is often dependent on the number of referrals you get from customers who have transacted business with you. Their first experience with you will usually determine if they would refer others to you. Make sure your business offers its service/product with excellent demeanor.

Be Attentive to Accounts

Generating revenues but not profits are the trickiest and feeblest success you could get distracted with on your account statements. How do you measure if your revenue translates to profit? Be sure to keep every expense recorded and compared with revenue. Have a firm grip on your figures and learn how to interpret your financial records. Importantly, don’t mix up business with personal cash flow.

Be Prudent With Finance

Before incurring any expense, make sure it is absolutely inevitable and contributes to your business goals; measure its ROI. In fact, some expenses best fit into the business’ long term goal. Hence, you should focus on what is most needed at the time and translates to more revenue for your business.

Belong to a Community

Mentors are very good sources of timely business advice. Moreover, with all the setbacks that you could be faced with in your first year, having one is invaluable to your survival. Getting one could also be very instrumental to generating needed connections for your business’ lift especially in your first year. But be sure to choose one that has a track record of success, one that believes in you and what you do, and one that can give you frank advice when necessary. Belonging to a community provides similar advantages plus the opportunity to share experiences to learn from and co-develop with other entrepreneurs.

Cheers!