The first year of business can be brutal. On average, entrepreneurs work longer hours and endure more stress than common employees, and yet if you’ve hit a goldmine idea and have the tools to back it up, all the work is worth it.
In this handy guide, we identify the 5 most important tips for surviving your first year, from practical cost-saving advice to the broad principles that that every business needs to get right.
1. Understand the market
Step one: interrogate the need for your product and the niche you’re fulfilling. Either you’re offering something new or doing it better (or cheaper).
Food and beverage industries will never go out of demand, but then you’re entering a competitive pool. Innovative apps like Uber are ground-breaking but are difficult to get started and face a surge of competition within months. No matter what you’re selling, you’ll face stumbling blocks along the way, but provided you know your market and understand its appeal, you’ll retain the impetus to keep going.
2. Keep overheads to a minimum
Modern technology has enabled entrepreneurs to work remotely, and that’s facilitated the rise of the shared office: communal spaces where desks can be rented for a flat monthly fee with amenities included.
What’s great is that shared offices come equipped with meeting rooms, but carry none of the overhead baggage that a full-fledged office brings. Water? Electricity? Internet? Forget about paying those bills and concentrate on what really matters: growing your business.
3. Build your network
Network, network, network. Getting anywhere in business is about getting along with people.
When it comes to dealing with larger corporations, make an effort to understand the landscape. Who is the decision maker? Who controls the purse strings? And who has influence with the boss?
Getting the right people on your side will give you a crucial advantage. We’re certainly not advocating being a sycophant; rather, take an interest in the lives of these people and learn the art of listening.
Every relationship you cultivate increases your chance of success.
4. Hire good people
According to Netflix Reed Hastings, you’re only as good as your employees, and the media giant has made it their mission to hire good people and pay them what they’re worth, routinely settling on salaries at the top end of industry standards.
This might be difficult when you’re still starting out, but the Netflix equation bears scrutiny.
The company goes a step further, dispensing with laborious rules to control what workers can and can’t do. Instead of worrying about the 1% who don’t toe the line, they concentrate on the 99% who want to work well, allowing employees to work the hours they like, take the holiday they want and even spend Netflix’s money as they see fit. The only rule? “Act inn Netflix’s best interests.”
This one line does all the work. Because the standards of excellence within the company are so high, those few that are gaming the system are quickly weeded out.
5. Stay agile
If you’re lucky enough to be in possession of a business that is making money after the first year, the worst thing you can do is rest on your laurels. Remember companies like Blockbuster and Kodak? When was the last time you visited one? Yup, they went bust a long time ago.
Agility is key: be prepared to change the way you do business; even the very product you’re selling.
Netflix is a good example of agility. They’ve gone from a mail order DVD service to a media company making ground-breaking television, all because they were prepared to jump ship when the ship was sinking and back a better idea. That’s easier to say than do, and yet agility is crucial.
If there’s one thing that’s certain in business, staying stagnant is a surefire way to die.