Starting a business can be a very daunting but exciting process. Shockingly, 80% of businesses fail within the first year and although this is a disappointing statistic, but carrying out thorough research, understanding your market and the vital importance of the basics could help to lower this figure. We’ve compiled a list of five crucial points every startup business owner needs to know to give their business a chance of surviving the first-year challenge.

Never Underestimate Your Business Plan

Your business plan is one of the most important documents that you have. It sets out how your business will evolve and grow and provides you with a set of guidelines to work alongside to ensure that you are going in the right direction. Business plans are well-researched pieces of information that sets out integral information such as competitive analysis to help establish where your company or brand sits in the market, a financial plan, an operations and management plan to outline how the business will function on a daily basis and any marketing strategies to help grow the brand. It allows you to align your business activities with business goals to ensure that you can serve and survive in the market, therefore, it is important to embed its principles into everything that you do. However, also bare in mind that as market trends, technologies and economic factors change, it is important to update your business plan accordingly.

Intellectual Property

Many businesses will have intellectual property, including patents, trademarks and copyrights, that they will need to protect. If a startup forgets to protect their intellectual property then it could mean disaster. For example, competitors, who are much larger than you are, can file a patent which means that they own the rights to the invention, use, sale or import of a product, even if it was you and not them who had the idea, developed and sold the original product. This means that you could have to owe fees to your competition or even not be allowed to sell the product, which is now legally theirs, which could easily spell the end for your startup as you struggle to afford the costs or are unable to compete with the competition. Commercial litigation solicitors can help you to advise, protect and defend your intellectual property and creative assets.

Know Your Cash Flow Inside Out

It is easy to focus on profit and have it as your main objective when starting a business. However, this can be an unhealthy way of viewing things and is one of the reasons that a lot of companies fail within the first year. Instead, get to know your cash flow inside out. Know where your biggest costs are and how you are going to cover them. To survive, a business needs to maintain a moving 10-13 weekly cash flow forecast, so whilst profit is perfectly okay as a long-term goal, ensure you have the basics covered to survive in the market first.

Welcome Feedback

Always let people interact with your product and service to gauge their reaction and receive feedback. As a business owner, you may have worked on a concept for so long that you can’t see it from an alternative view. Having fresh eyes to analyse and evaluate your product can provide you with some really great ideas or potential problems that you may have missed. Instead of taking constructive criticism as a negative, use the feedback as a part of your product or service development to help you innovate, keep up with or stay relevant within the market and compete with competitors by providing something that consumers actually want or need.

Don’t Micromanage

You’ve started a business, something that you are incredibly passionate about. You’ve spent endless nights planning and building up to this moment, you know your objectives and where you want to go and you don’t want anything to ruin it. Understandably, it’s hard to let go and trust your employees at first. However, a big mistake that many startup owners do is to micromanage for too long. This can lead to business failure if your employees aren’t confident that you trust in them. If you have hired well, for skill, intelligence and determination, then your employees will do their job as well as they can and in the best interests of the business. They may make mistakes, but with your direction and help, they will learn from it if you trust them to do their job.