The first year can be a particularly exciting period for a small business – but it’s also the most tumultuous. To survive the up and down nature of this initial launch period, it can be helpful to know which mistakes you’re most prone to make.
Avoid These Common Mistakes
Perhaps you’ve seen the statistics before. Roughly 1-in-5 businesses fail within the first year, while just half make it to their fifth birthday. Only a small fraction make it to the decade mark.
Statistics like this can be intimidating, but they don’t have to spell disaster for your company. If you can avoid some of the first year mistakes that so often set companies back, your chances of reaching key milestones like one, five, and ten years will skyrocket.
1. Failing to Prioritize Customer Service
“You don’t ever want to give the impression that your company is inaccessible or cares more about business than customer satisfaction,” this blog post from AnswerFirst explains. “A lot of big corporations give off this vibe because, frankly, they’re built to maximize profits by investing the least in support. You want to be proactive and advertise your need to help your customers.”
At such an early stage of business development, customer service isn’t something you can slack on. It’s often your best resource for differentiating your business from the competition (especially when you lack brand recognition and/or charge more).
2. Taking on Too Much Debt
At some point or another, you’ll need money to grow your business. Assuming that you aren’t bootstrapping with your own cash, this means you’ll need to take on debt. This is fine, but be wary of taking on too much of the wrong debt – something entrepreneur Serenity Gibbons is all-too-familiar with.
“When I needed money quickly, it made sense to pull out a credit card. But using a high-interest card meant I sometimes paid even more than the original charge after interest fees were added,” Gibbons explains.” And if I added to the balance on a high-balance card instead, I saw my credit score deflate, taking future credit lines with it.”
Be smart with how you take on debt and which types of debt you secure. You don’t want to drown in interest, but you also shouldn’t give up too much of an equity stake in your company. Patience and discipline with funding will go a long way.
3. Trying to Grow Too Fast
You have ample time for growth. Attempting to grow prematurely will lead you into a host of problems that you can’t easily escape.
Don’t try to grow for the sake of growth. You have plenty of time to scale up; rushing into a decision won’t do you any good. Set specific goals and lay out a plan for achieving them. A realistic timeframe will serve you well.
4. Not Being Willing to Shift
There’s something to be said for sticking with a plan and trying to see it through to fruition, but an unwillingness to shift in certain situations can come back to haunt you. You’ll find out a lot about your business in the first year. Some things you’ll like, others you won’t. A willingness to pivot when necessary will open your business up to additional opportunities that you otherwise wouldn’t have.
Put Your Business on the Right Track
There’s no guarantee that your business will be successful. There are hundreds of factors that come into play – including many that are totally outside of your control. But if you want to get your business on the right track and increase your chances of surviving and growing over time, you’ll have to avoid the common mistakes highlighted in this article.
Now’s your chance to be proactive – don’t delay!