The survival rate for small businesses is low for a reason. The first year in particular, the vast majority of new businesses do not make a profit. It is just that tough to find footing in a marketplace unless the product or idea is that strong.
That said, there are definitely things that first-year business owners can do to weather the storm. It may not result in booming business, but it could be enough to survive the first-year woes that so many businesses succumb to.
Expect the Unexpected
Smart business owners will plan for start-up costs like insurance, taxes, and other expenses. But the truly smart ones will put away a rainy day fund for those unexpected expenses. Rest assured, there will be something that you did not think of that will rear its head.
Being unprepared for surprise costs can leave a business dead in the water if they don’t have the means to adapt. No one can foresee what will happen in the future. But having that rainy day fund can help take what seems like a disaster and turn it into an inconvenience that can be managed.
Paying Yourself
Many first-year business owners put everything into the business. They will even work for free if that is what is necessary. While that is fine and well, it can come back to bite you if you have not properly prepared.
Make sure that you have the means to cover bills and personal expenses outside of your work expenses. Even if the business is succeeding, you may find yourself unable to pay bills because you aren’t paying yourself.
Have the Right Structure
Starting a business is about more than having a product or idea. There are so many fine details that can play a major role in a start-up business. Protecting yourself and the company is one such detail.
Protect both yourself and the business’ future by choosing the right company structure. It will protect you in the event of a lawsuit, limiting the losses to the business instead of overtaking your entire life.