A business’ first year can be a minefield of mistakes. From potential miscues in hiring, unmanaged operations, payroll issues, and bad manufacturing to getting overwhelmed in vendor selection, marketing and advertising and poorly executed merchandising, there are lists of mistakes you should have the foresight to expect and tackle. This is all part of the entrepreneurial game and it’s better to see these hurdles as learning opportunities on which to grow.
According to Bloomberg, 80% of businesses fail within the first 18 months, so many entrepreneurs never reach the goal of celebrating a first anniversary. It’s also fair to surmise that many of these companies are making a lot of the same mistakes – often the product of a single entrepreneur working tirelessly in a bubble.
The good news is that a lot of these mistakes are avoidable, and the ones that aren’t can easily be recovered from with the right planning and mindset.
Lack of Market Differentiation
Before opening your business, you need to understand, and more importantly, communicate the unique value you bring to the market and to potential customers effectively. Every business has dozens, if not hundreds, of competitors. If you don’t offer true value, you’ll get lost in the shuffle and struggle to turn even the slightest profit.
Avoid this mistake by knowing your business, understanding its value, and having the ability to clearly convey it to others. A Brand Strategist may be an easy solution to help you streamline your business vision.
Trying to Grow Too Fast
It’s natural to want to be first to market, but there is danger in growing too fast. Too many business owners are already conjuring images of their first franchise before they’ve entered the second quarter of operations; you want to grow strategically and judiciously. You don’t want to exhaust your customers or overextend your operations and resources within the first few months to a year of operations.
There is certainly value in being first, but not having completed a full cycle before expansion may leave you open to mistakes and financial drains that you would have otherwise seen coming, as wisdom from learning on the job is an invaluable asset.
Not Exhibiting Strong Leadership
In business, leadership is everything — vision, guidance, and communication are imperative; they define your culture and flow from the top down.
During their first year, businesses are often weighed down by leadership that is weak or prone to wavering opinions. You can’t spend the first year figuring out your leadership style; this needs to be established before you open the door. It’s okay to adjust or evolve as you go, but your leadership will be your business’ rudder, steering through various early obstacles and providing a predictable structure for your staff will only be to your benefit.
Refusing to Ask for Help
Any smart entrepreneur can conf rm and admit to the amount of help they needed in the first year of operations. It can be difficult to admit that you don’t know something or that you can’t get something done on your own, but don’t let your business suffer because you aren’t willing to ask for help.
If you have even one staff member, be sure to make delegation a priority. Leveraging your resources and not spreading yourself thin can help your business happily celebrate its first birthday with everyone feeling accomplished and empowered.
Letting Your Ego Run Your Business
Like refusing to ask for help and trying to grow too fast, making decisions based on ego will hurt your budding business. Not letting pride or jealousy of your competitors or even internal staff drive your decisions and reactions to problems is necessary for the health of your company. It means acting with humility and growing your business the right way, even if it’s not fl ashy. Being aware of what you don’t know will only help you assess the missing pieces and get the proper help where needed. Most entrepreneurs have a healthy ego, but at some point you need to make sound business decisions that aren’t coloured by showmanship.
Your business’ first year will arguably be its most difficult; data and statistics don’t lie and it takes a specific type of resilience and savviness to persevere. Your job as an entrepreneur on the verge of opening a new business is to set yourself up for the best chance of success. Your odds of making it greatly increase after the first year, and keeping that in mind, along with pragmatic planning, are things you owe yourself.
The first year of your business will be incredibly stressful. It’s historically tricky to the point where most businesses don’t even cross that threshold, so you’re already ahead. Over those first 365 days, you will experience an overwhelming number of challenges, tasks, and obstacles, and you will have to live with the fact that those challenges will always be a part of your planning and reality.
On the flip side, there are also a lot of big wins and achievements. Remember, a business’ odds and ability to reach year two rests squarely on your shoulders. You need to be aware of the common mistakes so that you can spot them and steer clear before they undermine your business. It’s a tough job that takes an honest approach and nerves of steel, but it’s within every entrepreneur’s grasp.
Rob Shapiro | Contributing Writer