5 Tips You Need to Thrive in Your First Year of Business
You’re just about to launch a new startup. You’re ready, excited, and wholly focused on your grind; however, some of you are still a bit nervous about how it will be in the first year.
If you can relate to the scenario above, this blog is for you and you. The most frequent question that new, emerging business people ask is — “How am I going to survive the initial period of opening up shop?”
Yes, it would help if you had a business plan, but that’s what everyone suggests. What about the finances? How do you manage the costs and still make a little profit, or is it even possible in the first year? There are levels to surviving the initial period, and this blog takes you through the whole process, layer by layer.
1. Don’t confuse revenue and profit as equal.
Some businesses generate revenue, and some make profits — as a beginner, it’s common to confuse both as the same. Your startup can make revenue in the first or even the first few years, but you wouldn’t have much runway left after deducting the underlying expenses. This part is where profits come in. Be smart, play safe, and map out a pricing strategy that brings at least 15-25% net profit margins to run a sustainable business.
2. Get your finances in check.
This tip is similar to our previous suggestion; finances fuel your startup’s engine. If you sort out this part of the business, your ship will soon sink. According to a Business Victoria study, the reason why 80% of businesses close revolves around financial discrepancies. That said, your company must have its own financial goals and check whether the expenses surpass the revenues.
3. Sort out the legal logistics.
Better believe, the last trouble any entrepreneur wants is dealing with law-related headaches. Make sure to keep your legal logistics in order before you get started, as it helps avoid any future trouble from the legal department. These logistics include choosing the proper business structure (solitary / LLP / partnership), adhering to the corporate and state taxation rules, selecting a legally vacant trade name, etc. – and that’s just the tip of the iceberg.
4. Start networking ASAP.
Now that you have understood the basics, let’s delve into the role of networking in business. Building a solid network in the first year, if done right, can bring you closer to so much growth and opportunities from like-minded people who trust your vision. You’ll always have people you’ve known for years via offline communities; stay in touch with them. If you haven’t already, create an online business profile ASAP, preferably on LinkedIn, Instagram, and Facebook, and get busy. Also, LinkedIn lets you search people based on location and industry — what does an entrepreneur need to start networking?
5. Master your pitching game.
You’ve probably binged on a few Shark Tank episodes back in the day — now, it’s your time to dive into the deep water. Although the biggest challenge in year one is encouraging your investors to put their money into your startup, it is still totally accomplishable. Preparing a mind-blowing, short, and to-the-point elevator pitch must be your priority numero uno when it comes to selling ideas and convincing potential investors to chip in. Please keep it simple, state the problem your idea targets to solve, and close the pitch like a boss.