It's hardly a surprise to any entrepreneur who has been through it that those first 12 months are some of the toughest. Navigating the perpetual ups and downs of being a business owner is very rewarding, but it is vital to remember that each entrepreneur will have their own significant issues. If you learn how to work through your issues, you can start to turn a small company into a successful organization. This is why it's so important to know the most common problems you will encounter during those first 12 months and how best to prepare for them.
The most common mistake for any small business is encountering financial problems. New business owners find, a few months in, their lack of understanding or sheer underestimation of the finances can make a business fall flat on its face before it's even started. This is why having a business plan should give you the best approach to determining how much money you need to keep afloat.
Because cash flow is such a major issue during those first 12 months, you need to learn how to communicate effectively but also you need to prepare should the worst-case scenario arise. If you have been putting into an IRA prior to starting your business, you can lend money from your IRA and use it to keep yourself afloat. However, you must remember that this is not a habit you should keep doing every time you encounter financial problems. This is why you need to go into the process with your eyes firmly open.
Going back to your business plan and ensuring that every eventuality is covered is vital. You cannot take for granted the financial aspects because this will be the most difficult component to navigate.
Taking on Too Much
Owning a business will be stressful. When money is tight during those first 12 months you've got to do your best to avoid burnout. While hiring extra people is a worthwhile option, if it's not feasible, having an advisor on board will give you more insights and help you keep a realistic perspective.
Being a business owner means having to think dynamically, and while you may want to try as many different ideas as possible, it's far better for you to be great at one thing rather than attempting to do everything.
Being an Effective Manager
A business is nothing without its employees. If you are lucky enough to be in a position where you can hire individuals in your first year, you've got to be able to manage them. If you take on too much work, you will find yourself stretched to breaking point, which will only hinder your abilities to be an effective manager.
Small businesses suffer because of the pressure managers place on employees. Employees may feel they have to give more than 110% to keep the business going, but it's not necessarily their responsibility. All they can do is perform their roles to the best of their abilities. The buck will always stop with you.
If you make people aware from the outset what they are getting into, and that extra work will be likely (but rewarded), this can help your employees to go into the process with their eyes open and you are setting clear boundary lines with them.
It's not about making your employees shirk responsibility, but you have to understand that it is your business, and if you really want them to share the burden, you've got to treat them as an equal rather than a lesser entity.
The Myriad of Legalities
If you don't go into business with your eyes open with regards to the financial aspects, you will suffer even further if you don't understand the legalities.
You have a legal responsibility to the business but also to anybody that comes into contact with it. Advertising laws and employment laws are two areas that you will need to have a brief understanding of. The best approach is to have legal support should you find yourself in hot water.
With all of these issues, you could find yourself feeling that you are in over your head, but you have to remember those first 12 months are the hardest because you are finding your feet but you are also going from month to month not knowing how things will pan out. Ultimately, you need to keep your motivation levels up at this point because, while it may seem overwhelming, the best is yet to come.
Matt Hoffer is a crypto enthusiast and gamer. When he's not de-constructing the blockchain, you can find him chilling with some lemonade in the shade or playing a round of golf.