You’ve made the leap. You’ve decided to fly solo, pursue your passion, and start your own business – congratulations! Starting this journey can feel both daunting and exciting, but we all agree: the destination is absolutely worth it.
The first year of business is tough. You’ll learn, make mistakes, hit incredible highs, and question your ideas (often all at the same time), and to get through it, you’ll need a strong game plan, and a flexible approach. You’ll also want to try to learn everything you can to start your business right.
If you’re setting out on the first year of entrepreneurship , these ten essentials will help you stay true to your business vision and find long term success.
Navigating your first year in business? Here are 10 things to do:
1. Perfect Your Pitch
Your pitch is crucial – you’ll use it to convince potential investors, sell your idea, and also rally people to support your cause. As a guideline, work on your ‘elevator pitch’: a few quick sentences designed to explain your business within the length of an elevator ride.
Don’t confuse your pitch with a marketing tagline – it doesn’t need to be overly scripted. Simply state the problem your business is trying to solve, and explain your idea. Practice it with friends or family until you’re comfortable, then test and evolve your pitch based on responses you get.
2. Don’t Equate Revenue With Profit
There’s a difference between running a business that makes revenue, and running a business that makes profit – and it’s easy to make the mistake of thinking the former equals the latter. Making revenue is one thing. However, after accounting for labour costs, services, office rent, and your own salary, your business could be in the red.
To put your business in a strong position for sustainable, profitable growth, map out your current costs compared to your pricing to understand your net profit margins – a good target is between 15-30%. Armed with this info, you can adjust your pricing and volume strategy, or production costs, to have a healthy profit margin for sustainable growth.
3. Make Your Finances a Priority
One of the main reasons small business owners fail is because they don’t get their finances in check. In fact:
80 percent of small businesses close their doors because of cashflow problems. – Business Victoria
Set up financial goals for the year with check-in points so you can stay on track. Keep an eye on your cashflow and payment timings (ideally, your incoming revenue should always be more than your outgoing expenses.) It’s also important to always have a buffer in place for any unexpected cases.
Gaining control of your finances can be daunting, so seek help whenever you can. There are plenty of tools online, including the many tools on BusinessTown, to help you sort out your finances.
It would also be advisable to think about bringing a freelance financial advisor or manager on board, to manage this important part of your business.
4. Look Out for Your Health.
When starting out, it’s easy to burn the candle at both ends – after all, you’re bringing your idea to life. However, the stats don’t lie: entrepreneurial burnout is a real thing, and 30 percent of all entrepreneurs live with, or experience, depression .
You and your team’s work-life balance is essential to the long term success of your business. Remember to disconnect, exercise, eat well, and spend time with your loved ones. You (and your business) will benefit in the long run.
5. Take the Time to Build Your Business Plan
Your business plan guides your managerial decisions as you launch and grow your business: it’s a place to structure your vision, unique value proposition, target market, product and pricing plan, finance strategy, priorities, and sales and marketing plan.
Whether you’re applying for funding, or pitching to investors, your business plan is proof that you’ve put in the hard work to validate your vision – so invest the time to build a solid foundation.
For more help on creating your business plan, including a fill-in-the-blanks template, checkout the courses on BusinessTown.
6. Focus On What You Do Best
Opportunities are abundant, yet the right ones are scarce. If you jump at every opportunity or pursue every idea that pops into your mind (we are a creative bunch, after all), you risk losing focus on your vision – which could cost your business time and money.
Be open to opportunities, but evaluate them thoroughly (perhaps with your mentor), and always go back to your plan. If an opportunity aligns with your business plan and goals, pursue it; if not, say no. Another one will always come along.
7. Know When To Say “No” To Something That’s Just Not Working
You’ll make mistakes – it’s a reality of the game we call business. Whether it’s a co-founder, a product feature, a marketing angle, or your pricing, some things won’t work. You therefore need to make the hard decision on when to pull the plug, or change tack.
8. Listen First
“Don’t find customers for your products, find products for your customers.” – Seth Godin
If customers do or don’t like your product, you need to know about it. The best companies are those who listen to customers and adapt their product to the customer. Steve Jobs, for example, said the idea for the iPhone originally started with a tablet, and suggested that it took around 5 years to develop the first iPhone.
Look for feedback, and be open to positive and constructive ideas for your business:
- Launch a beta test with a trusted small circle in your target market
- Email your customers after they receive your product, asking for feedback.
- Read and respond to reviews online, either on social media, Google+, or your industry’s review sites.
By listening to feedback, and evolving your product or services, you’ll set your business up to survive and thrive.
9. Bring on Trusted Mentors, and Know When to Ask for Help
The first year is tough, and that’s why you need to have some trusted mentors on board. Mentors bring value with experience and networking opportunities, and can often serve as a sounding board for ideas or issues.
You can have different mentors for finance, leadership, product development, and so on. You’ll also have mentors for different stages of business – your needs for launching a business are different from growing it, for example.
Finding mentors is easier than you’d think – look in your networks (whether it’s co-working spaces, community events, networking opportunities, or old colleagues), and use your perfected pitch to rally them for your cause.
10. Keep Learning, and Enjoy the Process!
Building your own business is a journey, and you’ll learn new things every single day. Enjoy every moment, relish the wins, and take time to reflect on what you’ve learnt, as well as what’s next.
Over To You
It’ll take hard work and dedication, but you can build a successful business. The first year is all about setting up solid foundations for the future – stay focused, and you’ll reap the rewards.
What are your tips for new small business owners?
About The Author: Jock Fairweather
Founder & Captain of Little Tokyo Two, Jock’s life goal is to reinvigorate the entrepreneurial spirit of Brisbane and to grow a passionate and talented business community.