5 Practical Tips to Survive Your First Year in Business
Despite the ups and downs of the economy one thing has been remarkably consistent over the years: The percentage of new businesses that close within either their first year, first five years, or first decade in operation. Roughly 80% of new businesses can consistently be expected to fail in their first year. Within five years only about half of these will still be up and running and, unfortunately, only about one-third of those will make it to ten years in business.
Of course, there’s an assortment of causes for the deaths of so many entrepreneurial dreams, and some, such as sudden or dramatic industry changes or events such as a national recession, may be unavoidable. A few common (and preventable) culprits, however, can be an entrepreneur’s understanding of the marketplace (competition, pricing, market needs, etc.), their failure to advertise and market the business, insufficient capital, and poor planning both before the doors open and operationally thereafter.
So how does the aspiring entrepreneur better their chances of survival and avoid these common pitfalls? Here are five practical tips that can help a new business owner in any industry have a better chance of long term success:
1: Use Your Network
Everyone starts somewhere and, chances are, throughout your career you have developed a network of contacts across various industries, companies, and professions that can be leveraged in a number of ways to help your new business stay afloat. Whether it’s getting the word out about your new venture or setting you up with great rates on insurance, office space, etc. contacts in your network may be able to help you in more ways than you might imagine. You just have to ask!
2: Stay Focused
In those first few tender months of operation it can be very tempting to chase down ideas, leads, or projects that are not in line with your original business plan but have potential value. Maybe it’s a contract with a large or high-profile client with requirements that you can’t confidently fill or an idea for yet another new venture or service offering that seems more lucrative than the one you’re currently involved with. In either case it’s best to retain your original focus and work toward the milestones set in your original business plan.
3: Charge What You’re Worth
A common mistake made by new business owners is lowering their rates or profit margins in order to gain new clients or projects. It’s easy to think that a potential client is silently judging you based on the newness of your business and feeling apprehensive about paying so much for the services of a relative newcomer, but that’s usually not the case. The thing to remember is that, if you did your homework, you didn’t just jump into your business blindly; you have years of experience backing your venture and it’s perfectly acceptable to charge fair market rates for that experience from the onset.
4: Don’t Skimp on Marketing
This one should be obvious but is arguably the most common mistake that new businesses make. When you first open your doors and you’re not setting any cash flow records it’s difficult to make the decision to pony up money for a proper website, or well-designed business collateral, ad campaigns, professional memberships, etc. However, developing a robust marketing plan based on both the average marketing spends for your competition and your organization’s specific needs and goals will help fill the sales pipeline that will carry you through those first years of operation.
5: Establish Yourself as a Subject Matter Expert
Every small business owner knows that when you start a new business you’re not just marketing that business; you’re also marketing yourself. Entrepreneurs that work to establish themselves as experts in their particular field will find it easier to acquire leads and close sales—not to mention charge a fair rate for their services—thanks to the experience their target audiences perceive that they have. There are numerous ways to build this rapport. Some of the most common include frequent blogging, leveraging a strong, professional social media presence, participation and leadership within local organizations such as the Chamber of Commerce and national trade organizations pertinent to your business, and simple speaking engagements such as lunch & learn events.
If you’re considering your options for starting a new business now is the time to do you due diligence and begin to lay the groundwork for your long-term success. Conducting exhaustive industry research and developing a solid business plan is an excellent start. Additionally, exploring franchise opportunities within industries experiencing consistent growth—such as AtWork—should not be overlooked. Established franchise systems provide the resources and know-how necessary to ensure consistent success from the first year onward and can be a great option, especially for new entrepreneurs. To learn more about how the AtWork opportunity can help you take the guesswork out of starting your own business and give you the resources, training, and confidence to grow a successful business click HERE or call 888-553-1745 today!