"When you reach an obstacle, turn it into an opportunity. You have the choice. You can overcome and be a winner, or you can allow it to overcome you and be a loser. The choice is yours and yours alone. Refuse to throw in the towel. Go that extra mile that failures refuse to travel. It is far better to be exhausted from success than to be rested from failure."- Mary Kay Ash, founder of Mary Kay Cosmetics
First Year Survival Kit: Five Tips on Navigating Your Small Business Through Rough Seas
As any entrepreneur knows, the first year is the hardest. You put your money, hard work and dreams into your startup and hope it stays afloat. It’s a difficult move anyway you look at it.
While there is no guaranteed method to ensure your startups survives the rough voyage that is its first year, here are some tips to keeping the ship balanced and navigating your startup towards smoother seas.
- Test the water before making the plunge: Market research is essential. It doesn’t matter how great your idea is, it will fail if no ones wants to buy it. It’s the harsh but honest truth. While market research is an important tool in your first year survival kit, it shouldn’t be the first time you use it. Always, ALWAYS research your market before you launch your startup.
- Protect your gold: Keep your expenses down. If you need a job done, try doing it yourself before hiring an outside job. Hiring interns, using trade services and good old manual labor are great ways to keep your expenses in check. Remember: you’re an entrepreneur, make it work. Managing your "burn rate," or how much capital you go through each month, is essential when keeping your startup afloat. Since most startups don’t see any revenue within the first year, the money you do have needs to cover all your expenses with some leftover for expansion. Don’t wing it. Always know where you stand financially and when you need backup funding, find it quickly.
- Prepare for the storm: Don’t kid yourself. Like all startups before and after you, you will encounter problems. Rather than turning a blind eye until the problem presents itself, prepare a plan of action ahead of time. Make a list of all possible problems, no matter how big or small, and outline a plan of action for each. It doesn’t have to be a manual, but enough to give direction when the tides turn against you. Better safe than sorry.
- Find a good first mate: Mentors are great for multiple reasons but most importantly because they can provide excellent advice and support at no cost. It’s simple, really. They’re free, they can help you avoid problems and, most importantly, they help keep you sane.
- Don’t abandon ship: Holding yourself to unattainable goals is a sure way to loose motivation and sink. Most startups don’t see revenue within the first year: remember that. Don’t expect to get funded within the first year either. Most investors view startups first year as a "hazing period." Typically, investors will watch over a startup during its first year, waiting for it to reach a milestone before investing. Just because you haven’t seen profit or investments within the first year, it doesn’t mean you should abandon ship. If you’re really concerned, analyze the market demand and pivot accordingly. Even if you’re not concerned, it’s still important to watch the seas and analyze your startup.