Many successful business owners look back on their first year of trading and often wonder how they got through those early days and created an established business out of the chaos and confusion that can sometimes engulf you during this embryonic time.
From juggling your cashflow to maybe even dealing with TAC claims, there are a whole host of events and scenarios that can challenge your ability and willpower, but with a bit of guidance and a positive attitude, you can combat your startup struggles.
Beating the odds
There is a fair amount of misinformation and myths surrounding the odds of survival when launching a new business.
If you believe the doom-mongers, you will be desperately hoping that you are not amongst the 90% of new businesses that are apparently destined to fail within the first few months or early years of trading.
If you want to separate the myths from the facts, the U.S Bureau of Labor can help you to do just that. It seems that the real odds are more that 75% of new businesses make it to their first birthday, 69% get through the 24-month barrier, and 50% of these startups, make it to the fifth year of trading.
Although a 50-50 chance of getting your startup to five years of trading and beyond might not seem incredibly attractive and even a bit worrying, these odds are much greater than some of the negative predictions you might read.
All in the planning
As the old business adage goes, if you fail to plan, you plan to fail.
You really can’t expect to get the financial support that your business needs from banks and investors, without a viable business plan. Even if you are self-funding your startup and don’t need an injection of money from external resources, you will still also need a business plan, so that you can monitor your progress and see how the business is performing.
The actual process of writing out a business plan and putting all of your hopes and aspirations down on paper, or on a spreadsheet, is a proven way of focusing your vision for the business and demonstrating what goals you need to achieve in order to become a successful and established business.
Cashflow is king
One of the most common reasons why a new business fails, is because they run out of money.
You can run out of money if you aren’t achieving the turnover targets set and sales are disappointing, but just as importantly, you can run out of cash as a result of growing too quickly and running out of enough cash to fuel the growth.
Always adopt the mindset that cashflow is king and try to keep your expenses as low as possible in the early months of trading. When sales start to come in more regularly and your cashflow situation improves, you can then adjust your forecasts so that you can properly fund any intended re-investment and keep your suppliers happy by paying them on time.
If you remain focused on giving your customers what they want and can adapt to changing conditions within the business, there is a good chance that you can be one of the business owners who proudly makes it to their fifth anniversary, and beyond.
About the author
Josh Rowe has been in business for four years now, and after some initial teething problems, hasn’t looked back. He wants to help others succeed, and avoid the mistakes that he made. He does this through writing articles for business blogs and participating in online discussions.