The First Year!

One of the things I teach in my book is that you should plan for the first five years of business. This should include to not live off of your income for the first five years. If it happens where you can before then that is great! However, you don’t want your ability to pay for your home to depend on your new customers. You want your committed customers to support your home. I left corporate America in August 2016. I was already active in my parents’ accounting firm. However, I decided to also start a new business at that time. The business would actually take care of my car payments and required very low start-up cost. I planned and factored everything in before leaving the job and knew what I needed to do to stay afloat. Well, business picked up nicely, however, growth brought on  many challenges. I also teach that business set-up is key and critical. The more official you set your business up the firmer your foundation for growth will be. With growth licenses, certifications, insurance, are all costs that people don’t usually take into consideration. I also didn’t plan for the business to completely slow down during summer break. You must know and plan for your specific market. I knew the market would reduce drastically in the summer months. However, I didn’t plan for the steep reduction that occurred. With that loss of income, I had also loss another and was completed knocked off of my feet. I was devastated. I felt defeated, however, I gained many new customers in the beginning of the coming school year. This encouraged me to keep striving.

 

Starting a business is not easy, and I’m not saying you will go to the extreme to survive.  As with any business, whether you are in the first or tenth year, there are always going to be issues and challenges. There are going to be challenges that you will not foresee. Give yourself a firm foundation. Set everything up properly, get cash flowing, establish and set standards. Last but not least, roll up your sleeves and prepare to get dirty. It’s all a part of your path. I searched the entire first year for web developers. I received quotes from $600 to $200K. I was confused but did not stop searching. I also searched for investors and reasonable trustworthy developers as well. My business deals with children, so hiring dependable and trustworthy staff had also become a challenge as well. Being a financial and business consultant, I was able to analyze my business, and see my shortcomings, however trying to put out fires without a team is challenging as well. In the second year, I started to position the business to create a reserve and hopefully obtain a loan. During the first year, I didn’t follow my own suggestion and I lived off of the funds. I am now in a position where I leave 25-30% of my revenue in the business. I understand survival and if you need the funds then you need them. However, a reserve is critical.  Winning funds for the business right now, would be a miracle. I would first pay for the trustworthy developers I found to create my online presence, then I would invest in safety signage, I would pay the insurance for a year, I would hire 3-5 people, and place a down payment on another vehicle.

 

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