For many new businesses, the first year is one of the most important. After all, not only is it the stage of your enterprise wherein the feasibility of your business model will be tested. But it is also the time when you’ll be able to establish your team and build a customer base. While a little over twenty percent of startups fail and are unable to make it past year one, it shouldn’t mean that yours will end up the same way. With some careful preparation and planning, not only will you be able to survive your first year, but succeed too.
Create a comprehensive business plan
It is a general rule of thumb always to create a comprehensive plan for any enterprise or venture. After all, outlining your business model gives you a better idea of its profitability. And it will also shed light on problem areas that you may encounter along the way and help you prepare for them. More importantly, it will help you reel in investors and convince financial institutions that your business is worth the support.
Avoid overspending
One of the reasons why many startups falter is that they fail to sustain their operations due to a lack of funds. The fact of the matter is that you’re unlikely to see any profits in your first year. And it is for this reason that you must avoid overspending at all costs. It is a tall order, to be sure, but it isn’t impossible to keep your expenditure as low as possible. One strategy is to negotiate with the desired vendors and suppliers for the necessary products. Another is to learn to shop around before making purchases. It may sound like a lot of extra work. However, you’ll reduce company expenses, save money, and keep the organization in good financial health in the process.
Protect your business
Accidents and errors can lead to both legal and medical fees. While this may appear like a minor detail to larger corporations, it can be financially disastrous for a startup working with limited resources. As such, it is crucial to secure the right coverage and policies you require. And there’s no reason not to do it either, especially when it is possible to insure your business online. So don’t overlook insurance. It give you peace of mind that your startup is protected financially if problems arise. And it will also show your target customers that you’re running a professional company.
Outsource if needed
It is a common practice these days to outsource work, especially for small businesses like startups. These companies rarely have the budget to establish an in-house team for specific tasks, after all. And outsourcing will be able to save you money without compromising on the quality of the work involved.
It can be an incredibly difficult task for a startup to survive its first year. But despite all of the challenges it poses, you can overcome them by creating an extensive plan, limiting your expenditure, protecting your business, and outsourcing when necessary.