Today, I want to teach you about what to expect your first year in business.
This message is for ALL entrepreneurs, regardless of what industry they are in.
I should start out by telling you that most new entrepreneurs have NO idea what they are getting themselves into when they start their own business.
Not for the first time anyway.
They decide to start a business because they have an idea for a new product or service, they are sick and tired of working for someone else, they want to make a change in their life, or out of desperation (they can’t find a job).
They have pipe dreams that their “great idea” will make them tons of money in a short amount of time.
The sales will come in on their own and life will be great.
Their ship is going to come in.
It seldom turns out that way.
Sadly, a high percentage of new businesses fail.
Just drive through your town and look at all the empty strip malls and office buildings.
Depending upon which source you cite, as many as 90% or more of all businesses fail within their first five years and many of them fail during the first year.
Lack of capital.
Bad business idea.
Lack of knowledge.
Bad product or service.
Poor marketing and sales skills.
Too much competition.
And countless other things.
Some of these things can be avoided.
Your first year in business it incredibly tough.
Your ultimate goal is to survive.
That’s right: SURVIVE.
You’ll also learn some valuable business lessons that will help you in the years to come.
If you can hang in there, learn from these lessons, and make the necessary adjustments, there is a good chance your business will survive.
If not, you will be a statistic.
What I want to do in the rest of this post is share some valuable business lessons you can expect to learn during your first year in business.
These are lessons I learned through my own experience.
They’re also things I wish someone would have shared with me before I started my own business.
# 1 Your Product is Not Your Business
Contrary to what most people think, your product or service is not your real business.
If you own a barber shop, cutting hair is not your business.
If you own a restaurant, preparing food is not your business.
I know that’s what some of you are thinking right now, but here is the real thing you should know.
MARKETING and PROMOTING your business are your real business.
Your job is to make the cash register ring.
It doesn’t matter if you make the best food or give the best haircuts.
Your most important job is to get the word out so people can learn about your business, buy your stuff, and be happy with their experience so they refer others.
# 2 You Need More Money Than You Think You Do
Whatever your estimated expenses are for your first year in business, you should at least double it.
Things will not go as planned.
Your financial forecasts will be too low.
You will have unplanned expenses.
You need to make sure you have some money saved for a rainy day, because it is going to rain.
Lots of businesses close down because the owner is under-capitalized.
Make sure you have a substantial savings and/or access to a line of credit.
In addition, don’t expect to take a salary of any kind your first year in business.
All money should be reinvested back into the business.
# 3 Not All Activities Are Created Equal
This lesson goes hand in hand with lesson number one.
As a business owner, you are the CEO and bottle washer.
Don’t confuse being busy with being productive.
Your only real objective is to MAKE THE CASH REGISTER RING.
Sales are marketing are your two most critical tasks.
Everything else is a time suck.
Everything else should be outsourced or delegated.
Focus on these two tasks and there is a good chance you will do quite well.
Avoid these two tasks and your business will become a statistic.
Whatever you do, don’t spend your $100 per hour time on $10 per hour tasks.
# 4 Get Ready to Work Twice as Much as You Did in Your Day Job
As the business owner, there are no 9 to 5 days.
Typically, you won’t get holidays or weekends off either.
Even if you’re not “at work” you will have things to do while you are at home, such as ordering inventory, keeping the books, filling out paperwork for the government, paying quarterly and sales taxes, dealing with employees, and many other things.
In most new businesses, you will work at least 80 hours per week, and your income will be MUCH LESS than it was at your previous job.
That’s because you are launching your business and getting it off the ground.
That takes time.
Once again, don’t expect a salary or income your first year in business.
Have some money in the bank to live off BEFORE you launch your business.
# 5 You Can’t Do It All Yourself
There are SO many things to do in your business.
Remember, you only get paid when you make the cash register ring.
Don’t try to be a one trick pony.
Don’t be a one-person band.
Hire employees or independent contractors and outsource as much as you can.
Keep the main thing the main thing.
One of my biggest mistakes is not outsourcing sooner.
Now, I try to outsource as much as possible.
This gives me more time to focus on money producing activities, AKA sales and marketing.
# 6 You Might Not Be Cut Out to Own a Business
Nothing ventured, nothing gained.
You never really know if you are cut out to be an entrepreneur until you try it.
You might quickly discover that you hate it.
You hate all the work and extra responsibility.
You hate “thinking” about your business all the time and you long for the days where you can return to a comfortable 9 to 5 job with good benefits.
There is nothing wrong with that.
Better to figure that out early on than go your whole life wondering if you should have owned your own business.
# 7 Dealing with Stress
During your first year in business, you’re going to need to learn how to deal with stress.
You will have added stress from the long hours and limited funds.
Your spouse might be nagging for you to spend more time with them and the kids.
You might be wondering how you will pay your bills.
You might wonder how you will keep your sanity.
It’s really important that you are on the same sheet of music with your spouse.
They might have to get a job while you start your business.
They might have to carry the financial load for your family during the first couple years of your new business.
If you don’t talk about this ahead of time it will create problems.
It’s also important that you eat healthy and exercise regularly so you can stay in shape, and have the energy to get through the day.
I KNOW WHAT YOU’RE THINKING
I know what some of you are saying.
With all this crazy shit why would anyone in their right mind start a business of their own?
As I see it, it’s worth it.
Not everyone will experience all of things I talked about in this article, but many people will.
If nothing else, it’s best to know about them ahead of time so you can be prepared.
Building a successful business is very profitable and very rewarding.
That being said, it isn’t easy.
If it was easy everyone would do it.
Ultimately, only you can decide what is best for you and your family.
Put some considerable thought into it, do your research, trust your instincts and make a decision.
I personally couldn’t imagine ever having a job again.
I love being my own boss, but I’ll be the first to admit that the first few years were really tough.
But now, some 14 years later, it’s great.
To each their own.
What are your thoughts about your first year in business?
What are some things you experienced during your first year in business?
I would love to hear from you.
Please leave a comment below to share your thoughts.
Have a great day.