What to Expect in the First Year of Running a Business
Starting a business is exciting! It is a year full of many firsts: first sale, first tax filing, first time to hire employees, first experience with rent or utility bills in your name. There are many tasks that you have never done before that you will have to master in order to be successful with your new venture. According to the Bureau of Labor Statistics, 20% of small businesses do not survive the first year, and nearly half of businesses close by their fifth year. In other words, starting a successful business is no easy task and it is very important to know what to expect in the first year of running a business. The startup and first few years can present some hurdles that often get overlooked. Consultance Accounting Services hopes to help prepare you for what to expect in the first year of running a business.
What Should I Expect in the First Year of Running a Business?
The first few years in business are crucial for building your company’s foundation and reputation. The lack of history with customers may make it more difficult to get them to buy from you over large companies they already do business with. Customers may be wary about buying from someone who is not well known because there is no proof that the product or service is good; therefore, the first thing you need to do is to make a good first impression.
You will not be a millionaire overnight. The first step is often the hardest but gaining customers and building your reputation takes time and money. During this time, it is very likely that you will run low on funds because many start-ups take more than six months before they see profits. It is important to remember that while these first few years may be difficult, if you perform well during this time, you will eventually gain stability and success.
Work-life balance is difficult. As an entrepreneur there is no one telling you what to do every day. However, without having employees or bosses around you constantly checking on your progress, it can be difficult to stay on top of tasks and meet deadlines. This first year will reveal how disciplined you are as a worker and where you might need improvement.
Say goodbye to sleep. One thing that first-time entrepreneurs do not anticipate is the amount of work they will end up doing late into the night or first thing in the morning before anyone else arrives at their office. You will end up working more hours than ever before, but this first year is crucial for showing customers and potential investors what you’re capable of so try not to lose too much sleep over it.
You might think taxes are only one thing when running a business, but they will not always be the same form or due date each month. You will often need to file every quarter instead of once annually like most people do for their personal taxes. This means if you have not already created an LLC (which most people don’t decide until after several months in business), start researching now what forms and paperwork you will need to first create the LLC and then file taxes as an LLC. You also will want to research any other forms your state may require on top of federal ones, such as paying sales tax every month (if applicable in your area). Hire an accounting services company to relieve some of this burden.
You will first learn to manage your own personal and business checking accounts, that means everything from paying bills to buying supplies or making deposits. And because you are a small business you definitely do not want any bank fees for anything because it can add up quickly if not monitored closely. It’s also a good idea to get an accounting software program since this is another expense you will need to take care of along with filing quarterly taxes. You will then become familiar with how these programs work which should include an inventory-tracking feature so that you do not buy more than what you really need and perhaps can sell later when needed.
Tips for Overcoming First Year Challenges
You need to make sure you prioritize tasks. Look at what needs to be done first and stick to that list until everything has been completed. It is easy to get distracted by all the other things begging for your attention, but if you focus on one task first, it will allow you your time and space when needed.
Find a Mentor
Do not try to do this alone! There are plenty of people who have had more experience than yourself and can offer advice and guidance during rough times. Having someone knowledgeable in the industry around while starting the business can help with troubleshooting problems and making better decisions in general.
Create a Schedule
When first starting out, it is difficult to know how many hours you will end up working, so it is important that you create your schedule around that. You want to be sure that you have built in some time for yourself first. Remember the first year is all about proving yourself to clients and investors alike so make sure you have a solid work ethic first.
The first year is not going to go how you planned or resemble any other first year of a business before. It will take more time than you expect and require more effort on your part, but if you have a good plan at least there will be something for potential customers and investors to see from the beginning. Anyone can start a company, but it takes skill and experience to run one successfully during its first few years.
Contact the Professionals
First-time entrepreneurs should expect to work hard in their first year of owning a business. The first year is all about gaining customers, establishing your reputation, and proving yourself capable of running the company. It takes time to build up these things so first-time entrepreneurs should come into the first year with patience, realistic expectations, and an understanding that this first year will be unlike anything they have done before.
If you want your business to make it in the long run, you must build a strong foundation because the first few years of business determine long term success.
Consultance Accounting provides a broad offering of accounting services that can be customized to meet your specific needs. What makes us different is how we deliver our services. Through our people, processes, and technologies, we’ve proven our unyielding commitment to exceptional client service. Our goal is not only to provide you with top-notch, reliable accounting services, but also be your trusted business advisor. Contact Consultance Accounting Services today for any of your business needs.