Written by Kelly Stincer.
If you’ve taken the leap to start your own business, chances are you have vision and passion for what you do. But there can be a lot of unknowns in that first year, and navigating them successfully is crucial for creating a solid base to grow a company.
“It can be stressful to take that plunge into entrepreneurship,” said Richard Wagner, CEO of Prevedére, a software company that analyzes more than a million external factors to help companies like Hershey and RaceTrac Petroleum forecast future demand and revenue. “You want your company to be an instant success, but there are a lot of things to work out before that success is possible. Staying focused on your goals will help you work through the challenges.”
Here are five steps Wagner says will help your business survive that first year:
- Gather Resources. Whether it’s employees, capital or relationships, having the right resources in place will make things smoother for your business going forward. As far as hiring, you want to find the right people with the right skills who also truly believe in what you’re doing. Employees who share your passion for the business will see the job as more than a paycheck and will want to bring new ideas to the table. For capital, it’s about exploring different sources. Funding for your business can come from friends and family, fundraising or crowdfunding campaigns, venture capital funds and traditional bank lending. Wagner says community relationships are also important resources because they can lead you to potential customers and investors.
- Plan for the Best – Prepare for the Worst. New entrepreneurs need to plan for more than just the next month. Wagner says you need to have contingencies for all of the “ifs” in that first year – If the product isn’t finished. If there aren’t as many initial customers as expected. If anticipated funding doesn’t come through. Things like the economy and human behavior might be out of your control, but preparing for the worst case scenario will protect your company in that first critical year.
- Give More Than 100%. Being an entrepreneur takes a full commitment. You have to be willing to dedicate all of your time to the startup and work harder than you ever have before to tackle the many challenges in those early stages. Wagner says it’s also important to remember that, even though you are dedicated to doing the work, you can’t always do everything on your own. It’s important to reach out and find the help and expertise you need to move your business forward.
- Identify your Target Market. It’s not just about having a great product; it’s about delivering that product to the right customers. Wagner says this may be a different group than you originally envisioned, and you don’t want to pour your time and money into reaching people or companies that are not going to buy. It’s important to test your marketing strategy and find out who is excited about what you’re offering in order to narrow your scope. This will help you survive year one and aim for growth in year two.
- Develop Thick Skin. As an entrepreneur, you will undoubtedly face criticism. Wagner says being confident in the value of your company will keep you from getting discouraged. It can be easy to take negativity personally, so focus on the positive feedback – an excited customer, an interested investor or an advisor who wants to help.
Wagner says building a successful startup is a marathon, not a sprint. Set your goals and work toward them one day at a time. The challenges aren’t going to end after the first year, but these tips can help prepare you for the next round as you scale your business and continue to grow.
Prevedére, based in Columbus, Ohio, was founded in 2012 and has doubled their revenue every year since. The company has grown to over 25 employees with major clients including Nationwide Insurance and Wendy’s restaurants. The company received pre-seed venture funding from Rev1 Ventures, a central Ohio partner of Ohio Third Frontier, and was also awarded funding from Ohio Third Frontier’s Innovation Ohio Loan Fund.