Growing a business from nothing is an uphill battle, especially in your first year. It’s difficult to turn a profit when you’re just getting started. But that doesn’t mean it’s impossible to see growth in your bank account in your first year of business. With careful planning and a lot of hard work, you are certain to prosper.
Here are a few ways to plan for success and ensure that you’ll stay out of the red in your very first year as a business owner.
Start with Some Money in the Bank
You’ve probably heard a few rags to riches success stories. And while they’re not impossible to achieve, they are incredibly rare. It’s unrealistic to establish a business with nothing to cushion your fall if something doesn’t go according to plan. And without a savings, you are more likely to accrue debt in order to pay your bills, which will leave you in the red at the end of your first year.
So, unless you have guaranteed contracts and income at the start of your business, you should have a little money in the bank before you take the leap into entrepreneurship. Give yourself room to maneuver and enough of a financial cushion to make the necessary purchases to get the ball rolling. Save up enough money to make sure the bills will be paid and your major purchases will be covered before you book your first client.
Create a Detailed Budget
This is a fairly obvious step that many people don’t take the time to actually do before going into business. But it is so important and could make the difference between going broke or having extra cash in your bank account at the end of your first year.
When creating a budget for your new business, be realistic, and always consider your best and worst case scenarios. Categorize your expenses by those that will be recurring payments and those that will be one-time fees. Keep a ledger of all transactions – both income and expense – and continually adjust your budget to reflect any changes. By monitoring all your transactions, you’ll be able to track patterns which will help you make more accurate projections for your finances.
When planning your first business budget, get started by asking yourself these questions:
- What is my first-year goal?
- How much revenue is expected?
- What business expenses are expected?
- How much room do I have for unexpected expenses?
- What are my monthly goals?
Remember, a budget is not just something you write down once and forget about. It is a road map to your success and, as such, should be reviewed regularly to ensure that you haven’t wandered off the path.
Embrace the Entrepreneur Grind
The first year of business is hard; there is no way around that. And if you want to see growth in your bank account by the end of year one, you’ll need to embrace the entrepreneur grind. It is a mindset that will push you to keep going, no matter what setbacks you encounter. You cannot expect growth without a willingness to work harder than ever before. Your business will give back what you put into it.
Embracing that entrepreneurial mindset requires tenacity, passion, confidence and a fierce determination to succeed. Along with these traits, you must have a concrete work ethic. Your business cannot grow on its own, and new clients will not magically find their way to your website. If you wish to see considerable business growth in your first year, you must be proactive in seeking out new clients and valuable business relationships.
You get back what you put into your business, so give it everything you’ve got, and you’ll be celebrating your 1st business anniversary with cash in the bank.