Many businesses fail within the first year, so we asked small business owners what makes the difference between business success and business failure in the first year.
We got a lot of great responses, and we wanted to pass along their insights. The top eight answers are on the board.
“I think that you still have to put in the work even if you are struggling. I think at the first sign of trouble or struggle, a lot of small businesses give up and go onto the next thing. I think successful businesses work through the hard times to reach the high points.”
—Jordon Mazziotti, Mazziotti Design
“Your first year is all about testing your theory, product, and facing adversity. You have to have a solid business plan, along with the ability to withstand the downturns that every business goes through.”
—Junior Leoso, Pacific Beach Training
“I stuck with it and understood that it would be tough in the beginning, that there wasn’t a solid paycheck coming in at all times, but to be prepared for that, which made me work harder and account for every dollar.”
—Michelle Joy Martin, Mjoy Tickets
“Many things will cause a business to fail. In my opinion the number one thing is simply giving up. There were many weeks in the first 2 years where I had no calls and I would wonder if I really had a viable business. Slowly but surely though word got out that I was good at what I did, My prices are reasonable and I always show up. I work out of my home so my only overhead is my car. In summary, don’t give up, deliver consistent good product, only have satisfied customers, and keep your overheads low.”
—Steve Holder, Fix My PC 2
“I think business is a marathon and not a sprint. It will take some time before you see results from any new venture. So I’d say before you start a business, know and plan on that mentally, strategically, and financially, so you can make it beyond the first year.”
—Amber Parrow, eletelephant
“Be flexible. All too often we go into things thinking we know exactly what we are doing, how we are going to do it, and why. Sometimes our plans need tweaking and adapting. For this to happen we have to listen for the whisper hidden between our desire and what the client wants. For example, when I first started Spanish in Rosario, my plan was to act as an intermediary between students and language institutions.
The problem with that model is, it left me no way to control for quality. I couldn’t go into those language centers and say, ‘Hey, I think that there is a better methodology that would not only be more effective, but also get us better feedback.’
So, I slowly adapted by opening a school of my own, hiring and training teachers with the method and material I thought worked best. That had never been part of the initial plan but I do think it is what has helped us grow over the past decade.”
—Stephanie Cariker, Spanish in Rosario
“Starting a business can be hard and very time consuming at the beginning. When you decide to start a business, you should start off with realistic goals. Goals that you know you can set and reach. At no point should you feel discouraged if you don’t hit your goals. If you don’t reach some goals, don’t look at it as a failure, but rather a lesson.
When you have a mindset that allows you to view failing as lessons in business, you will succeed. Failing is unexpected, and HOW you deal with it will determine your success. Being able to find your way and continue to be motivated when something goes south, is a huge plus in business. This is what creates a leader…and is a key factor in a successful business.
Money management is another factor that can make or break your business in it’s first year. Having plans in place as you grow will help you ensure you are not over spending. This depends on the market that you’re in, so as a leader you should study your market and come up with a plan to ensure that your business model is profitable.
Last but not least, don’t be afraid. An entrepreneur creates a business based on a vision or dream. An entrepreneur is able to take a vision and bring it to life regardless of what others may think. Some may say that it’s impossible or that it can’t be done. The only person who is able to judge that should be you. If you can visualize it, you can create it.”
—Arlind Rexha, Zenith E Juice
“It might be too soon for me to dole out advice about success and failure. Perhaps I’ll really never know what makes or breaks a business. Sometimes it’s just dumb luck! But if you’ve got a Plan B in your back pocket (whether that’s six months savings of living expenses or an alternative job to fall back on), I think it helps tone down the desperation that can sometimes break you down internally and externally. I was very anxious and stressed, maybe even a little desperate my first couple months into self-employment and the work only just trickled in. Once I got a big project break, I felt worlds better and that’s precisely when the work started pouring in. Just a coincidence? Maybe, maybe not!”
—Katie Robleski, As The Crow Designs
Brad Hanks is in charge of Growth at ZipBooks.