Starting a business for the first time is no mean feat – but if you’re reading this article, you probably know that already. Nevertheless, the harsh truth is that up to 50% of all new businesses don’t survive to reach five years, most often failing due to money woes. However, there are 5 tried-and-tested tips you can implement in your first year as an entrepreneur that will give your business the best possible chances of longevity.
1. Stay focused
First-time business owners can be easily distracted by different possibilities and opportunities – but before you spend precious time pursuing issues that may be marginal to your original business goals, objectively assess whether you have the resources and capacity to do so.
One helpful tip is to return to your founding values for the business. What was the driving intention behind your desire to go out on your own? What is the ethos of your start-up, summarized in a sentence or two? To help you simplify your priorities, remind yourself of the basic services or products you aim to provide.
The keep-it-simple principle also applies to many other aspects of small business ownership, including how you communicate your business goal to others. Prepare an engaging, unique, concise pitch that will make an impact.
2. Secure your business structure
Setting up a new business can take many different forms. Common ways include working as a solopreneur (working solo), a partnership with other like-minded entrepreneurs, or finding investors to bankroll your company, as well as establishing your business as a Limited Liability Company (LLC).
For small business owners concerned about insurance, the LLC route is often the smartest option. After all, no matter how small the team, the business owner has a responsibility to form a defence for their company. Since LLC offers a shield for assets but doesn’t impinge on business operations in any significant way, many entrepreneurs find this method of company formation an attractive choice.
3. Keep your money management tight
As a small business owner, managing finances is invariably the toughest part of heading a start-up. Set weekly, monthly, and quarterly evaluations to ensure that payroll, GST, and insurance payments are going out as they should - and that client, investor, or loan money is regularly coming in.
For small businesses, taxes are an especially important consideration. Ensure that you have a proper financial calendar and filing system established early, and also decide at the same early stage whether you will manage your tax independently or enlist the help of an accountant. As a word from the wise: many insiders recommend that you do source outside help, as there is nothing that can sink a start-up as quickly as a dodgy balance book.
4. Outfit your space well
You will be surprised by how much an aesthetically-pleasing, comfortable office space can influence the minds of your visiting clients. Especially when it comes to boardrooms and meeting rooms, it pays to invest in quality furniture and equipment which will leave no doubt in your clients’ or customers’ minds as to the professionalism of your company.
5. Be the boss you always wanted to have
The first year is a grind not just for the entrepreneur, but for his or her employees, too – so as much as is possible, be a model worker. Successful business owners readily admit how much they owe their business’ survival to their starting workforce. It’s true that if you have a hardworking, dedicated group of people working towards your goal, your business will enjoy the best chances of success. So be principled, motivated, available, and personable – and set a great example!