Metro EDGE is made up of some pretty amazing people. Among our members we have those who run successful businesses, those who do amazing things for charities, and those who make climbing the corporate ladder look easy. What we all have in common is the desire to actively make Sacramento the best it can be. An empowered under 40 population is a great means to that end so we are asking our members to share their insights with their fellow Metro EDGErs though a new blog series. From how to make successful cold calls to what to (or not to!) wear to the office, over the next several weeks we will share the knowledge of our members to help make you, along with our fair city, the best you can be.
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7 Tips for Surviving Your First Year In Business
Only Spend Money On Things That Will Help Make You Money: Cash is everything in your first year but beware the temptation to buy fancy equipment, signup for unnecessary services, and indulgent “expenses.” Everything you spend money on should contribute to growing sales and company revenue. Anything else should be considered for later.
When you think about a business expense, ask yourself if a direct relationship to creating a sale or generating profit. This means all the “nice to haves” should be put on ice until you are generating profit with plenty of room to spare. Do you really need to upgrade a computer? Is an expensive mahogany desk necessary when your trusty Ikea workstation will suffice?
Learn to make the most of the resources presently available to you. Sometimes they might not be the sexiest options but they’ll save you money. In your first year, every penny counts.
Invest In Your Website: If a client only has $5000 to pour into their marketing budget and wants to know how to spend it, I tell them to put it all into their website. Your website should be your primary sales and marketing investment.
Traditional promotional mailers, radio spots, and magazine ads are temporary and limited in their effectiveness in this new digital age. For example, once a mailer goes out, it is ineffective within a week because people have given it a once over and likely thrown it away.
Every potential customer will likely visit your website first before deciding to buy from you. It’s essential to make a good impression right away by offering the best possible web experience grounded in aesthetically pleasing design coupled with ease of use. To maintain their marketing effectiveness, most businesses initiate some type of site overhaul at least once every two years. Despite a professionally managed and maintained website being your largest marketing expense, it’s the easiest and most cost effective way to raise the flow of business inquiries, referrals and visitors.
Avoid Fruitless Meetings: Meetings are one of the biggest drains on productive time. I used to find nearly half my workweek was being sucked up by unnecessary meetings with other clients and vendors. Like your business expenses, try to only participate in meetings to help make you more money or develop new ways to reach customers.
Since people always schedule meetings in either half hour or hour blocks, suggest a conference call or meeting 15 minutes or 25 minutes in length instead. Use a short agenda to maintain focus and direction so frivolous discussion and rehashing of old topics will be cut short. Keep meetings short and sweet so you can get back to contributing to the core of your business’s product or service.
Steer Clear of Paralysis By Analysis: Young startups can easily fall into the trap of paralysis by analysis, where reaching a single decision devours your entire day (Or week!) More often than not, a supposedly “vital” decision is far less important than you think taking precious energy and time away from truly important business matters.
If any decision takes more than 15 minutes to decide or discuss, table it for another day to discuss when your mind is fresh. A young startup plagued by indecision will find itself sinking faster than the Titanic.
Go On Vacation: The saying, “you can’t see the forest for the trees.” has a lot of truth for young startups. Eventually you’ll need to get away from the minutia of business so you can think clearly about the bigger picture. It’s like a buggy laptop in need of a short re-boot to fix whatever glitch is plaguing it.
Thus entrepreneurs, like computers, need a short break away to reboot their minds and see the bigger picture. Go to the mountains, hit the coast or crash at a friend’s house for a couple days…wherever you consider your happy place to be. Ensure it is at least a few hours from work and keep communication with your team restricted to only the essentials.
Trust me, your business will not crash and burn if you take a few days off. I schedule a couple vacations a year where I bring a blank notepad and a few interesting books on innovation and management. Every time I get away for a few days to gain a new perspective I come back ready to apply newfound creative energy and passion to my business.
Don’t blow money on a fancy office: Every entrepreneur fanaticizes about the
jaw-dropping office on the 25th floor with floor to ceiling windows and infinity pool in the break room. It’s a nice daydream but keep your workplace expectations within the boundaries of your budget. We migrated our business to a tiny 400sqft studio office after a year of working remotely. From there, space upgrades were made when our cash flow could easily support it.
Consider a virtual office or try and sublease an office from another business. We’ve been subleasing our unused office space for years to other young startups. It saves them and us lots of money. Unless you’ve got mountains of disposable capital, start small and work your way up to the office of your dreams.
Fire Your Bad Customers: Don’t be trapped by the axiom “the customer is always right.” Instead, consider firing the customers who are making your life a living hell. In your first year, you do not need the added stress of trying to appease customers who will never be satisfied. You think you need the money, but in reality trying to please Wally Whiner and Pessimist Patty may not be possible.
Failure to rid yourself of bad customers and projects will only build your resentment towards your customer base as a whole negatively affecting your productivity, business decisions and overall sanity.
Send toxic customers on their way but be professional while doing it. Explain politely that you will not be able to meet their expectations and refer them to your favorite competitor. Believe it or not, we've had a few clients completely change their tune after we suggested they find another company.
Eric Knopf is the founder of Vision Launchers, a creative and technology services agency which has helped launch over 200 startups and ideas get off the ground. He also is co-founder of WebConnex, a popular web-based fundraising and event management software provider. Aside from his business responsibilities, Eric also hosts a Launchpad, a collaborative monthly meet up for startup entrepreneurs and composes Dumbtax, a blog for avoiding common startup mistakes. You can follow him at @ericknopf
