Starting your first business might have you bouncing from one emotion to the next. It's all excitement in the beginning, but it can leave you clinging to survival mode by the end of Year One. Learning about how many businesses fail in the first year can be discouraging. Ensure success in that crucial first year of business by laying solid groundwork, doing your homework and anticipating the next steps in your entrepreneurial journey.
Preparing for the future
Take comfort in knowing you're not the first small business owner to encounter surprises in your first year of business. In fact, small business owners share several common hurdles when they're in startup mode.
Once you've confirmed your business idea is viable, there are still a number of factors to consider: Is it the right time? Do you have the money? Will you still be passionate about it in a few months?
If you're ready to be your own boss and reap the rewards of business ownership, what comes next? Knowing there will be challenges is important, but it's more important to plan for them.
Let's look at how other entrepreneurs handled their first-year challenges and came out stronger:
Managing lengthy to-do lists
Before you even open your doors, you likely have a to-do list a mile long. Instead of letting it overwhelm you, consider what Ramona and Marcelous Jones of Bristol Borough, Pennsylvania, did with their early learning center Discover Learn and Grow in Season 2 of Deluxe's Small Business Revolution.
The Joneses' to-do lists seemed never-ending: Event planning, boosting their marketing and increasing enrollment were all on their radar. Ramona and Marcelous enjoyed throwing events to introduce their services to parents in the community. On top of planning these events, they needed to build a marketing plan to increase exposure. And since the end goal was an increase in student enrollment (and a corresponding increase in cash flow) the duo had to improve their marketing efforts.
Solution: To tackle the endless to-do's and improve awareness in the community, the business owners needed to identify what was most important and prioritize that. With the help of the Deluxe team, the Joneses focused on establishing their brand and getting noticed online. And instead of focusing on innumerable follow-up to-do's, they spent time telling their story through a strong website. By defining and showing the early learning center's personality and focus on education and safety, the Joneses channeled their energy effectively. By settling on a brand that families could trust (embodied in their new website), they saw impactful results.
This excitement boosted their motivation to tackle more items, such as their social media presence. As these pieces fell into place, the rest of their to-do list seemed much more manageable.
Building awareness and an audience base
With a talent and love for woodworking, Coty Skinner of Searcy, Arkansas opened ARganic Woodwork in 2019. Crafting everything from barn doors to heirloom rattles, Skinner launched his business in the hopes of using the revenue to help foster families in need. After an initial wave of press for ARganic and its charitable mission, Skinner struggled to build his audience, market himself and leverage interest in his business.
Solution: Skinner, who was featured on the fourth season of Small Business Revolution, knew he needed a website even before he started working with the Deluxe team. A website is a business's home online — it provides prospective customers with crucial information they need to make purchasing decisions. The designers worked with Skinner to create a site that introduced him and his work to visitors. An Our Mission page explains Skinner's background and the social cause that is central to his business. Product-specific pages let prospective customers know what they can expect from ARganic. The Contact Us page gives visitors a way to get in touch with Skinner and start planning their custom project. The new website is now helping him generate awareness and communicate his mission to prospects. The change has been encouraging. Skinner feels that his community is really taking notice of ARganic.
A major small business first year challenge is simply getting people to know who you are and what you do. However, building a strong website is a great early step to take as you establish your brand and start promoting yourself.
Even if your primary focus is caring for your customer base, you have to focus on taking care of your business, too. Eclectic Shoppe, a Wabash, Indiana, business featured on Season 1 of Small Business Revolution, showcases local artists' work. Owners Mike and Maria Smyth share a love of local artistry, from pottery to paintings. But they needed to double profits in order to stay open past their first year. They were spending so much time running their business day-to-day that they didn’t have time to focus on a marketing plan to raise revenue.
Solution: The Smyths found enormous potential in email marketing. Not only did email allow the shop owners to directly talk to their customers, but email marketing provided a powerful way to grow sales. Even better, the Smyths can see their open rates — the number of subscribers who opened the email — to measure which emails worked better than others. Their average open rate of 25% (a great number for a retail store) created foot traffic that has helped the shop double its profits and keep its doors open. Beyond that, the Smyths have integrated their marketing so it works together. For example, now they encourage email subscriptions through their website.
When you're short on help and need marketing that pays off, email marketing is a good way to go. It's simple to implement and statistically proven to get results.
The first-year survival checklist:
Understanding and communicating your business’s personality
Creating a business plan (Startup Fundamentals can help you tackle all of the important "firsts")
Spreading awareness through your brand and web presence
Accepting advice from those who have been there
Engaging with email marketing
Staying on top of your finances (try Finance Fundamentals to learn the basics)
Looking for resources that not only help you avoid common pitfalls but also show you're not in this alone.
Let go of:
Lengthy to-do lists; instead, tackle the most important things first
The mentality that you have to “do it all right now and do it all perfectly”; instead, remember that entrepreneurship requires some on-the-job education as you go
Trying to make everyone your target audience; instead, consider who your most likely customers are, and concentrate on finding them where they are
Watch Small Business Revolution Season 4, where you'll meet Skinner, the owner of the woodworking business mentioned above as he tries to handle first-year challenges, spread his wings and find success.
Explore one of the most important first steps in your first year of business: incorporation. Protect your business by limiting your legal responsibility, taking advantage of potential tax deductions and gaining credibility.
Your first year in business is bound for greatness, and some stress. Make it more manageable by taking the advice of those who have walked the path before you.