Is the First Year in Business the Hardest?
Building a business is hard work and when the company is in its infancy, it can be extremely difficult. The first year in business is largely focused on survival and during this period, you’ll face obstacles, build your customer base, and learn many things about being a business owner. While the first year is hard, it’s really the first several years that can be the most challenging.
During this time, the business will go through growing pains and you’ll learn more about running a business. At the same time, you’ll begin to learn more about what makes a business successful. If you get sick of running your business, don’t give up.
How Long Does the Average Small Business Survive?
Since the 1990s, the business survival rate has remained relatively stable. On average, 20% of small businesses fail during the first two years, 45% fail within 5, and 65% fail within 10. This shows that making it in business can be incredibly difficult. This means that small businesses have a relatively good chance of making it through the first two years, but it grows even more difficult as time goes on.
The typical lifespan of a small business is 8.5 years, which can place a lot of pressure on entrepreneurs to succeed early. Fortunately for most small businesses, more businesses survive their first year than those that fail. Remaining motivated and decided through the first few years of business can help to set a solid foundation for continued growth.
How Long Does it Take for a Business to be Profitable?
In the United States, 99% of businesses are small businesses, yet only 40% report being profitable. Among the most profitable businesses include accounting/tax prep and legal services.
For many small businesses, the average time for a business to break even and make a profit can take two to three years. In fact, most businesses won’t be profitable during the first year. For those that are, typically profits are reinvested into the business to fund new business strategies, hire employees, and drive growth in other areas of the business.
What Do You Need to Do to Get a Company Off the Ground?
It’s only natural for an entrepreneur to want their business to grow. Still, it can be impossible to know how to run a successful small business without prior experience. To get your business to take off, start by:
- Believing in your idea: You need to be passionate and committed to your business idea in order for it to grow. Holding firm to this belief will allow you to remain confident in your business and overcome self-doubt. At the same time, you’ll want to remain committed to this idea, otherwise, you risk burning out and
- Solve a problem: Successful businesses typically fill an unmet need within the marketplace. Seek to create a business that will help your customers overcome a particular pain point or problem in their lives.
- Develop a plan: You’ll want to create a comprehensive business plan to succeed. This includes identifying goals you’re looking to achieve and obstacles that may stand in the way. This helps you develop an effective strategy that can help you become successful.
- Create something you love: If you don’t love your business, you won’t be committed to growing it and maintaining it. And, when you’re building something you love, you’ll be able to navigate challenges more effectively.
Keep in mind that there is no single right way to get your company off the ground. Ultimately, you’ll want to focus on creating a business that you care about and that delivers some kind of value to your customers.