If you’ve just recently opened a business or have the wheels in motion for starting one, you know how much work goes into making a go of your own venture. According to the U.S. Bureau of Labor Statistics, about 75% of new businesses make it through their first year, 69% survive two years, while only 50% last five years. Needless to say, the first few years after opening a business can be harrowing, and you’ll need to be prepared to endure a bumpy ride. So what are some entrepreneurial secrets for success? Here are some tips on how to survive and thrive in your first year:
Enlist the Help of Your Community
“The first year was really about enrolling my community in what I was doing–friends, family, former co-workers–so that they could all talk about what I was doing to others,” explains Natalie Sakai, owner of the creative production company Contagious L.A. “It was a way of getting them excited by inspiring them with my leap, while also asking for help at the same time.” Don’t be shy about spreading the word to others about what you’re doing and what your vision is. By being enthusiastic about your venture, you’ll get others pumped, too.
You’ll also want to get your hustle on. Sakai suggests cold calling and meeting with as many people as possible. “Turn every meeting into another meeting,” suggests Sakai. “That’s how you’ll expand your network infinitely.” Leave no stone unturned, as you never know what opportunities could stem from an initial meeting.
Surround Yourself With People You Love Working With
“One of the most important things you can do is build a VIP team to help you build your business,” says Jay Bean, founder and CEO of the marketing platform FreshLime. “No matter what you think, you can’t do everything alone and you shouldn’t try,” explains Bean. “They will become a little bit like family in the process of starting a company, so make sure you trust them and hold each other accountable for all the tasks leading up to building a successful company.”
Take your time in finding the right team members you enjoy being around, love working with, and can trust. And while it may be difficult, don’t be afraid to let somebody go if things don’t pan out. As you’re laying the groundwork and learning how to manage your business in the first year, it’s essential to have a stellar team that is equally committed to your company’s success.
Listen to Your Clients
“The first year is all about listening,” says Jordan Passman, founder of Score a Score. “It’s about hearing what your clients want and adapting to their feedback. Success is the ability to accommodate their preferences and requests.” The more you pay attention to what your audience or clients want, the more you’ll be able to make tweaks to your business. So don’t be afraid to experiment, try out a bunch of things, and see what sticks. If you think of your business as a sculpture that is constantly being molded, you’ll be able to evolve and cater to the needs of your clients.
Keep Your Finances in Order
“Once you have your money organized, you can focus on your business,” says Nick Braun, CEO of PetInsuranceQuotes.com. “Financial preparation means creating a budget of the business costs and estimated revenue so you can determine how much your burn rate will be,” says Braun. “Then take that number and double it.”
And don’t forget to factor how much you’ll need to live off of, says Braun. If you’re bootstrapping, figure out how much you need each month to live on a barebones budget and set aside enough for a year. If you can’t swing it, try setting aside enough for six months, or for three months at a time.
Besides having a savings, you’ll also need to have a good line of credit. “To get through the struggle, have a good amount of capital saved and available through credit cards and whatever means possible,” says Zack Miller of Hatch. “If your company is truly something that people value and want, then you have to just get through.”
If you have questions about how to best prepare financially for your first year as a business owner, you can reach out to your local credit union branch to learn about what options, resources and tools are available.
Keep Your Overhead as Low as Possible
Sakai kept her businesses afloat the first year by cooking at home as much as possible, meeting up for coffee instead of going for a round of drinks with clients or having pricier lunch meetings, and working from home. “It was all about creating a lot of smoke and mirrors from what I already had,” Sakai explains.
It’s a prime opportunity to flex your frugality muscles and be resourceful both with your business and in your personal life. And when you rake in more clients and have a more constant stream of revenue, you’ll be better primed to make the most of what you have.
With a bit of grit, know-how, and preparation, your business will well be on its way for a successful first year. “While the first year is difficult, it’s also incredibly rewarding,” says Passman. “The first taste of success, even small, will keep you excited and insatiable for more.”