How to Survive The First Year: 11 New Business Tips for Beginners
Did you know 83,240 Canadian businesses closed down in 2013 and a further 3,116 filed for bankruptcy in 2014?
No matter what you make of these figures, one thing is clear: a lot of businesses are going down!
If you’re looking to start a small business, you definitely want to stay in operation for a long time.
However, starting and running a successful business can be easier said than done. Many first time entrepreneurs don’t have a good handle on beginner business tips, so they end up hitting wall after wall.
In this post, we’re sharing the top business tips for beginners. Keep reading to learn how to launch a business that can survive the first year (and years to come).
1. Offer Products/Services That Can Fly
One of the biggest mistakes beginners make is to start a business offering a product or service that customers don’t want to buy.
Before opening the doors of your new business to customers, ensure your product or service has a strong demand.
To know this, ask yourself whether your small business idea fills a market gap or solves a problem facing customers.
It’s also important to test the performance of your product before launching. For instance, you could distribute a few samples to people in your neighbourhood and then ask for their opinion.
Do they find it useful? Are they likely to buy? How does it stack up against competing products?
2. Have a Solid Business Plan
Starting a business without having a strong business plan is like building a house without a blueprint.
After establishing that your product or service has the potential to do well in the market, shift your focus to writing a business plan.
If you’ve little or no experience writing business plans, research extensively before giving it ago. Or, seek help from someone whose done it before.
Either way, your business plan must provide the following details:
- A summary of your business goals and objectives
- A description of your company. This includes the names of owners, location, and product offerings
- A detailed analysis of the market you want to break into
- Organization and management structure of the business
- Your marketing and sales strategy
- Funding sources and financial projections.
3. Get Sufficient Financing
A business cannot operate without money.
Before getting started, ensure you have the money you need to manufacture your products or purchase stock from suppliers. You will also need funds to promote the business and possibly rent out a commercial space (if you aren’t starting from home).
If you lack enough startup capital, talk to a commercial lender. 52.3 percent of all businesses in Canada rely on debt financing, and the approval rate is at an impressive 82.1 percent.
Other potential financing sources include family members and friends, equity and angel investors, and government loans and grants.
If you choose to accept financing from equity or angel investors, keep in mind you will need to surrender a stake in your company. Giving away too much stake reduces your control in the business.
4. Practice Prudent Financial Management
Money is a limited resource.
As such, you must spend your business money wisely if you want your business to survive its first year.
Since you may not be able to hire an accountant at the beginning, be sure to make use of accounting software. Track every penny that flows in and out of the business.
Avoid renting out expensive commercial spaces and purchasing expensive office furniture. As a new business, you need to keep your expenses as low as you can.
5. Keep Contracts Legal
This is one of the most overlooked business tips for beginners. Yet, it protects businesses from malicious lawsuits and claims.
In the course of doing business, you will need to enter into agreements with suppliers and service providers. Although there’s nothing wrong entering into a gentleman’s agreement with other businesses, it’s not a smart thing to do.
These agreements can be broken, and when that happens, seeking redress in a court of law will be a challenging task.
Ensuring all the contracts you enter into are legal is the best way to protect your business from legal risks.
You don’t need to hire a permanent lawyer for this task. Just have the contact of a small business lawyer on speed dial, so you can use their services when you need to.
6. Deliver Excellent Customer Service
Customers are central to the success of your business.
Every company wants a portion of their money, so you must be on top of your game to get your fair share.
To keep customers coming back to your store, focus on providing excellent customer services. Treat them like royalty!
Maintain an open line of communication with them, respond to queries and complaints quickly, and keep improving the quality of your products.
7. Promote Your Business
Competition for customers is fierce.
With the majority of small and medium size businesses investing in advertising and marketing, you have no option but to join the fray.
But as a new business owner, you may not have the funds to run campaigns on mainstream platforms such as television and national newspapers.
What should you do?
Simple! Turn to digital marketing.
With over 32 million Canadians using the internet, there’s no reason why you can’t scoop some of them into loyal customers.
First, build a business website that works for both mobile and desktop users. Next, optimize it for local search. This helps your business get found by customers in your local area.
You should also sign up your business on Facebook, Twitter and other social media networks that suit your business.
Make sure to post informative and engaging content (product reviews, inspiring articles, images and business videos) to your website and social media pages.
8. Monitor Your Competition
In the real business world market competition is fierce. Business owners are always finding creative ways to outmaneuver their competitors and stay on top.
If you want to outsell your competitors, you must know what they are up to. Which marketing strategies are they using? Are they planning to launch new products soon?
By the way, you don’t have to be sneaky to monitor your competitors. Keep tabs on their social media posts, sign up for their newsletters and visit their websites.
When you know what other businesses in your industry are doing or planning to do, it’s easy to respond accordingly.
For instance, if a competitor is planning to launch a marketing campaign in your local area, you can also prepare to roll out a similar campaign. This way, you will be able to neutralize the effect of their campaign!
9. Track Your Progress
In the chase for profits, it’s common for newbies to forget their business goals.
Tracking the progress of your enterprise helps you ensure you are on the right path.
Go back to your business plan and assess whether you’re meeting all your objectives. For example, if you had projected to acquire 100 customers by the end of 4 months, verify whether you met the target after this period.
If you did, thumbs up but don’t take the foot off the gas! If you didn’t, take some time to identify where you went wrong and take an appropriate corrective measure.
Tracking your progress is one of the best business tips to keep you firmly focused on achieving your entrepreneurial mission.
10. Find a Coach/Mentor
This list of business tips wouldn’t be complete without talking about business mentors or coaches.
The world of entrepreneurship can be ruthless. It’s like diving into the ocean to swim with the sharks!
As a newbie, a business coach or mentor can help guide you. Even Virgin Group’s Richard Branson and Alphabet’s Larry Page sought mentors when they were starting out!
Even if you think your product is the next big thing and feel you don’t need a mentor to succeed, don’t pass the opportunity to get expert help and drops of wisdom.
A mentor can equip you with business tips for your industry, and connect you to other established entrepreneurs.
So, how do you find a mentor?
There is no universal strategy! Identify your potential mentor and try to reach out. Send emails and be persistent, though you should take care not to come off as desperate.
Don’t forget to pitch your product or idea. If it’s great, you stand a higher chance of getting a response.
11. Put in Long Shifts
If you want your business to survive its first year, you’ll not only show up for work but also put in long hours.
After the business closes for the day, don’t be so quick to rush home. If you’re a one man show, stay behind those closed doors and compile a sales report for the day. Use this time to go on social media and see what customers are saying about your business.
In business, as in life, hard work pays off.
Anyone can start a business, but not everyone can hack it!
As a newbie, you should take every step to ensure your business starts off on a solid footing. With these business tips, you are now in a better position to launch a business that will live beyond a year.
If your planning on starting a business and trying to find the perfect name, make sure to check out our free Canada business name search to see what names are available for registration.