There’s an intrinsic expression of optimism that unites people with an entrepreneurial spirit, the creative individuals who choose to strike out on their own and start a new business. It’s a spirit that perseveres despite findings by the U.S. Bureau of Labor Statistics, which states that around 20% of new business formations will fail in their first year. It appears that Americans are, on the whole, more optimistic than most, with the United States continuing to assert its dominance in the global startup ecosystem rankings, currently claiming 47% of the world’s top 30 ecosystems. There are valuable lessons to be learned from new business ventures that survive those critical first twelve months, and the habits of those steering them to success. Here’s some worth considering.
Set It Up For Financial Success
The majority of businesses that fail within the first year do so due to a lack of money or financing. A recent report suggests that as many as 38% of new businesses run out of cash or fail to attract new investment during this period. In order to establish new businesses, operators habitually choose to limit their personal liability for any debts that their company may incur. This is best achieved through establishing a limited liability company (LLC), or private limited company.
The structural flexibility that LLC formation provides can help shield new business owners from personal ruin should the business fail, It also offers the option of pass-through taxation whereby the LLC is not taxed on its profits, and thus make savings in this area. There are other advantages, as well as some complications, that can arise out of an LLC arrangement, with best practice in the area involving engaging with a trusted legal advisor. According to Legal Zoom reviews for LLC, the process of applying for LLC can be simple, fast, and affordable, when enacted through a reputable agent service.
All Techs On Hand
Every startup, no matter how lean, has aspirations to make it big. Often, one of the biggest mistakes a new business makes is not investing enough in its digital services. While frugality certainly has a role to play in establishing healthy spending habits and apportioning funds, when it comes to technology, aim for bigger and better. Implementing a robust and scaleable software infrastructure will support future growth, and save you in the long term. A sophisticated multi platform online presence is a means to enhancing marketing strategy and increasing brand visibility. It will help to establish fluent messaging systems, interactive customer portals, snazzy online shopfronts and efficient payment processing systems, all of which encourages client trade and loyalty.
If you launch with a simplistic DIY website, as soon as your business gains any traction you’ll likely find that your digital solutions lack the functionality to keep pace. The downtime and thus disruptions to client communications and trade that will occur when you have your systems upgraded can be costly. If your website or mobile application performs at suboptimal speed, contains errors that prevent clients from transacting smoothly, or are otherwise less than dazzling, this could well lose you custom. Make futuristic and immersive digital platform implementation a habit from the beginning and reap the rewards of staying ahead of your own expansion.
Make Planning A Priority
It’s always far easier to remove an item from a carefully drawn out schedule than to insert one. Planning plays a very critical role in the inception of a new business and securing its future viability. The top benefits of having a coherent business plan include an increased clarity in decision making. During the first year, you’ll likely have some tough fiduciary calls to make, and having a clear idea of the direction in which you see your business developing will assist. A carefully crafted business plan can help you target your marketing campaigns, demonstrate your worth to potential funding partners, and onboard a talented crew of employees who align with your company vision. A plan gives you structure and can motivate you through the inevitable challenges and any set backs you may encounter in those initial months.
Once the business starts taking off, it’s tempting to leave your responsibilities to a manager or someone who is somewhat familiar with the internal workings of your venture. However, every business, no matter how big or small, can benefit from an owner’s personal touch since you’re the most knowledgeable about the ins and outs of it. Being present also ensures that you stay on top of everything so you can spot potential problems before they manifest.
So there you have it, some simple, and yet often overlooked steps in the path towards surviving that first year in the big sea of new business with buoyancy. Make it through those first twelve months and you’ll find there are plenty of opportunities to innovate, to get weird and to get wonderful, all because you took some stake in developing healthy habits early on.