You may have heard this statement before: it is incredibly difficult for any business to last through its first year.
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In truth, that's a myth. With the exception of a few specific industries, studies from the Department of Business Dynamics Statistics at the U.S. Census Bureau show that 70% of new enterprises reach their second birthday. And about half of them survive five years or more.
But if you're an entrepreneur trying to launch a new business (maybe for the first time in your life), learning on the fly and trying to avoid major mistakes can cause you a lot of stress. So knowing what to expect and how to handle rookie year obstacles can certainly go a long way toward giving you a little peace of mind.
Here are some tips for surviving your first year in business:
It can be hard to get a loan as a new business, so you should consider funding sources other than the bank. Savings, family members, and retirement plans can provide you with some much-needed cash.
Avail yourself of resources
There are lots of agencies who want to help you succeed as a business and are willing to help you do it. So be sure to check out the U.S. Small Business Administration, SCORE, local or state governments, local universities, and even your local library for entrepreneurial information.
Identify what makes you special
You can go a long way if you can determine why your enterprise is different from its competitors. Then you should adapt your marketing strategy to leverage that advantage.
Stick to your business plan
Make sure you're doing what you need to do to break even (or, in some cases, just meet payroll). Be wary of trying to take your business in another direction before it is even on track.
Announce your presence
You'd be surprised how many entrepreneurs throw open the doors to their new businesses and just assume that customers will show up. Set aside a marketing budget and determine how to position yourself in the marketplace – and then tell everybody about your business!
Don't be afraid to negotiate
Many expenses associated with a new business, like your lease or your website, are negotiable. Think outside the box and try to tailor a financial arrangement which suits your needs.
Get good support
Obtain the services of experts, such as a business tax accountant, a commercial real estate broker, and a small business attorney. Don't just assume that the people who have filled these roles for you as a non-business owner are qualified to do the same for your startup.
Know what you're worth
It may be tempting in your initial year to undercharge customers for your products or services in order to secure new business. While this approach can have benefits, make sure that you don't undervalue yourself. Not only could this hurt the bottom line, but it may also raise doubts in the minds of the public about how valuable your offerings really are.
In your first year of business, anticipating a problem or issue and then overcoming it can lift a huge burden off your psyche. It can also boost your confidence and create momentum. And it helps to create a foundation of success that can benefit your enterprise for many more years to come.