Starting a business is very difficult and it’s stated that within the first “2” years, around 30% to 40% fail because they encounter unexpected problems. This is why it’s important you have a clear cut plan about your business, thinking of everything from the beginning. Did you know, at one point, banks didn’t even require a business plan if you needed a start-up loan? That’s amazing because now, you can’t even get a loan for $2,000 WITHOUT having a clear cut outline of your plans. Banks have experience and have dealt with millions of start-ups over the years so they know what to look for when applying for a loan. They know when to spot a problem even when you don’t, however, this is NOT the point of my content. It’s to go through some common mistakes made by start-ups that can be the difference between failure and success.
I’m a blogger and to be successful, you have to treat your online marketing as a business. This means you should have a clear cut plan on how you expect to dominate the web. However, surviving your first year as a blogger is just as tough as any other business. Here are some factors to consider in business and how to survive your first year. Let’s get started…
Business Plan
It’s doesn’t matter if you’re applying for a loan or starting with your own savings because you need a business plan. It’s important to write down what you have planned so you can have a visual image that will help guide your business. Starting a business can be very stressful and you’ll have hundreds of things on your mind so writing down your plan will help you remember everything important. Many people skim this part because they think it’s a lengthy process but if it’s done over several days, it can be very easy to put your vision on paper. Here are a few questions to ask yourself when creating a business plan…
- Business name
- Marketing vision
- Business purpose or objective
- Online design layout (depends on business)
- Profit model
The point is, you should write everything down you know will matter so you stay focused.
Eye on Expenses
When starting a business, money will be tight so it’s important you keep a close eye on your expenses. You need to make a clear list of the necessities and simple luxuries when starting out. You’re going to hear a lot of people telling you about the tools you need when getting started, but everyone has their own requirements. This is why a business plan is important, so you can clearly define your monthly budget for expenses. However, take a few days to write down what you need to get your business off the ground and what you’ll be able to survive without in the first couple of months. Remember, each unnecessary dollar you spend can hurt your business in the long run, especially if you’re struggling to make money.
- Write down monthly expenses
- Write down operating costs (daily, weekly, monthly)
- Employee payroll
Reinvesting
During the first year, you’ll be making some profit and you have to decide if you will reinvest or take a personal salary. It’s strongly recommend you keep reinvesting money back into your business because this will increase monthly operating expenses. As mentioned, starting a business can be tough and you might be hit with some unexpected expenses so having extra cash flow is a great way to survive the tough times. No matter who you ask, all businesses will have their ups and downs during the first year because you’ll be learning new things from mistakes made during the process. Having extra money is a great way to survive turbulent times. Here’s something else…
When you have extra cash flow from reinvesting back in the business, you’ll be able to try new things like marketing, products, campaigns, etc., which will help expand your business even quicker.
Customer Focus
There’s a famous saying that if you take care of your customer, then your business will take care of itself. I can’t believe how some business owners don’t pay attention to their customers, which will cost them greatly in the future. One of my clients made the mistake of NOT reimbursing his customer for a mistake and it turned out he was an authority in the niche. He spread the word to his network and my client lost enormous business because of what happened. The funny thing is, if my client solved the problem, which would have cost $50-$60 dollars, he probably would have made thousands from referral income. Anyway, it’s a valuable lesson he learned and thankfully, he was able to recover. I asked my client why he did what he did and he said he wanted to save the money because it was a starting business. However, you can see how customers are even above profits because WITHOUT them, you have no business.
Always pay attention to your customers’ needs because short term, it’ll cost you more, but long term, you can double or triple your business. Remember, in business, it’s the ones around the longest who are the MOST successful.