How To Survive That Difficult First Year As A Startup
For many, the first step to financial freedom is creating your own business. It’s a worthy pursuit. Get it right and you can turn a small idea into a multi-billion dollar company. There are hundreds of success stories out there to inspire you. Most monster companies began as a simple idea before turning into financial giants. There is no reason that your company couldn’t be the next big success story.
In this digital age, it is easier than ever. The internet has created a level playing field. It is an arena where anyone can start a company. Anyone can create a website and social media pages. You can sell your wares and offer your services from the comfort of your own home. Indeed, many successful companies have started from a bedroom or a living room. However, for every success story, there are plenty of failures.
The first year is often the hardest. Getting a business off the ground and financially stable is one of the most difficult things you will ever do. It can be especially painful when you are so emotionally connected to the project too. The key is sheer perseverance and passion. Never underestimate the power of these two elements. Aside from passion and hard work, there are a few tips you can follow that will help you through the first year. We’ve collected some of the best for you below.
Research and preparation
“Failing to plan is planning to fail”. The old idiom rings true when it comes to startups. The key to a successful first year is planning and research. Before you even embark on your ‘first year’, it is not uncommon to spend a year planning. Use that time to discover whether your idea is viable. Find out whether it has longevity and develop that idea into a full strategy. An idea alone is not enough. Take the time to find out if there is a market for your idea. How will you reach that market? How can you convince people that they need your product or service?
The key to a successful first year is to attack it with full speed. You need to anticipate the problems and have the answers before they even crop up. You can’t afford to trip up in the first year. You need momentum and that comes from planning ahead and researching. Spend as much time as you need here until you are confident.
Capital
The bane of every CEO’s life is his company’s balance sheet. If there’s one thing that will keep you awake at night, it is lack of money. Worrying about financial problems and capital has caused the death of many a startup. It takes over your life and it becomes the driving force. You forget about the passion and direction you need to really make the product successful. That’s why a secure capital plan is needed before you even embark on your first year. Put a strict budget in place and have a plan for the money. That could be your own investment, a loan from family or a loan from a bank. Ideally, you should be able to cover costs for a year before you start.
Start small
The biggest mistake made by startups is trying to do too much all at once. The key to growth is starting small and extending when possible. Take a look at Facebook. Zuckerberg started with only Harvard in mind. This was an easier world to conquer. Once everyone at Harvard was using Facebook, they moved on to selected US universities. Then they expanded nationwide and into the military. At this point, Facebook had a rolling momentum which carried itself. Although the internet opens up endless possibilities and locations, start small. Start in your local area. If you can satisfy a need among a local group, then you know your product will work on a big scale.
Build clients
The first year of business is all about establishing yourself. It’s about setting yourself up for more fruitful years ahead. Don’t get too carried away in the first year. Build your brand and keep it strong with a small section of clients. Your outgoings shouldn’t be too large in your first year, so chose the right clients. Go for quality over quantity.
Appear bigger than you are
Even in your first year, your business can appear experienced and wise. That is the trick to attracting loyal customers and big clients. People flock to experience and the appearance of knowledge. Even if you run your business from your bedroom, there are tricks to making it look like a large company. Make use of virtual offices; that will give you a London postcode and address. Make sure you have your own domain name and personalised email address. That should be ‘yourname@yourcompany.com’. Even if you are a young business, act like an established company.
Sleep
The first year of business will be one of the most stressful things you ever do. You’ll spend every waking minute thinking about it and agonising over decisions. Try to establish a work-life balance. Leave the work behind in the evening and spend time with your family. You’ll come back to the office with a clear head and you’ll move forward. It will feel like you need to be working every second of the day. In actual fact, this will be detrimental to your business.
Make mistakes
Don’t be scared to take risks and make mistakes. Making a mistake is a good thing so long as you learn from it. Many big success stories came about through mistakes. Sometimes you need something to go wrong to see the true path. If you make a mistake, don’t dwell on it. That will kill your business. Move on immediately, and make provisions to make sure it doesn’t happen again.
Starting your own business could be the route to financial freedom. It will be difficult, stressful and emotionally draining, but the rewards are rich. There are not only financial rewards to be claimed, but the satisfaction of watching your business thrive. Remember, before you jump into anything, plan ahead and budget carefully. Once your first year is in swing, start small but look big. Make mistakes, learn from them and most important of all – get some sleep!
