Answer: The easy answer is (1) have a well thought out business plan. (2) Be well funded. (3) Know who and where you customers are and sell, sell, sell, then perform above and beyond.
Let’s look at some other elements of first-year success.
Plan your way to success. Many entrepreneurs think they have a great idea, but don’t fully vet it through a well thought out plan that fully explores the strategies and tactics for launching and operating the business. If an idea is not well thought out and planned, no amount of money, sweat or prayer can make it a success.
Stick to your knitting. If your life experience is in construction, don’t venture into landscaping where you have no experience. You can rely on outside resources to help you with what you don’t know like bookkeeping, but you need to build a business around what you know to have a firm foundation for success.
Communicate, Communicate, Communicate. Tell your friends, family, and associates, past business colleagues about your new venture. Get on social media that is frequented by your future customers. Use a website as your gateway to customers. Use email to introduce you to your target market. Positioning yourself in the market is critical so that upon launch you have a brand that buyers want to experience.
Crawl, walk, then run. Don’t bite off more than your can chew at one sitting. If you are launching a lawn service, start with a truck, trailer, and equipment, when you get to the point where you cannot service any more customers with the initial equipment and know that this level is sustainable, invest in the next level of service. If you have window cleaning business and one team can handle 25 customers, when you get to 26 customers consider expansion, not before since customers come and go and you don’t want a team waiting for the next customer.
Be frugal. Owning and operating a business is expensive. If you don’t need an office, don’t rent one. If you need one truck and trailer, don’t buy two. Buy your business cards online or from a printer that will deliver for the same price. Use the promotional piece that has multiple uses vs. designing something new for each promotion. Test the market to determine what promotions work and what don’t. There is a saying, “Happiness is positive cash flow.” Sales generate cash in, but cash out is a management issue that you can control.
Use your personal credit cards conservatively. You can be smart or suicidal. You can go out and buy everything you possibly could use at one time and load your credit card or time your purchases so that you buy what you need to start and then add to it as you generate cash flow.
Let your business income fund the acquisition of needed equipment. This approach to debt reduces the stress level of managing your cash.
Manage your receivables. If there is any one element of the year, fundamental to survival it’s to manage your receivables. Negotiate your payment terms up front. If it is payment upon receipt of services or receiving a deposit and then payment upon completion of house painting or home renovation, then make sure you and your customer agree up front. If you are going to invoice, then make sure there is agreement on the terms, net 30 days or payment upon receipt. Know what your cash needs are and then stay on top of receivables.
Take advantage of any free promotions. Social media requires “sweat” investment. If your customers are connected via social media, use it. If they are newsletter readers, then create your email list and send a monthly newsletter with hints, tips, and techniques for managing one’s garden. Network anyplace you can get increase brand awareness. Get the buzz going about your venture by word of mouth that networking generates.
Get ready to work harder than you have ever worked before. Much of your success will be the “sweat equity” that you put into the enterprise. If you think you worked hard for someone else, you have no idea what it is like to be your own boss. It is long days and some part of seven days a week. When you are away, you are still there mentally. If you are ready for this type of commitment, then your friends and family need know the commitment you have to make to launch and succeed in your business.
Business on Cape Cod is different. No matter what your business: consulting, life coaching, bookkeeping, house painting, window washing, music lessons or event planning, you need to understand in launching a Cape-based business that you will have more defined swings in both sales and expenses. From May to October you are flat out. From November to April you are in a sustaining mode and preparing for the next season. It takes a different approach to operating and managing your enterprise. Be prepared before launch.
For more information on launching a business: Jonathan Long, Founder, and CEO, Market Domination Media.