One of the riskiest times for any business is when it has just begun. In the first two years, three of every ten startups expire, the SBA reports. By five years, half those startups are history.
The SBA doesn't say, but I would wager the majority of those early flameouts happen within the very first year, or just after. Often, I've noticed, newbie retailers sign a one-year lease. They hang on 12 months since they're obligated to pay rent that long anyway. Then the minute that expires, they dry up and blow away.
How can you improve the odds that your startup will survive that tough first year? Here are five key steps to take:
- Talk to customers. Doing market research at the start can help you avoid so many mistakes. You'll have the right offer, at the right price, in the right market.
- Choose your location carefully. Whether it's a great website URL that's easy to remember or a retail location with enough foot traffic, make sure your business is where it needs to be.
- Keep expenses down. Look for every possible way to save. This will allow you to keep going longer, hopefully until revenue starts to cover your nut. Hire interns, trade services, postpone purchases, or pick up a broom and do it yourself. Do it all yourself, for as long as needed.
- Plan for problems. The only thing as sure as death and taxes is that unexpected issues will crop up with your baby business. Sit down and think about everything that could go wrong -- then, make a plan for how you will survive each possible scenario.
- Analyze how it's going. Even though it's hard to find time in those crazy startup days, it's important to stop and look at your numbers to see where your business is headed. Is that where you want to go? If not, change course. Most successful startups went through multiple iterations before they found their groove.
How did you get your business through its first year? Share your story in the comments.
This article originally posted on Entrepreneur.com
