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No one prepares you for that first year in business. They really don’t. Your first year in business is going to be rough. It’s going to be very, very rough. I can’t even begin to tell you how crazy it will be.
I’m going to discuss the first thing you should look out for in your first year. The first thing you should know, is you’re going to fuck up. I’m not saying just a little bit, but a lot.
It’s part of how you’ll grow as a business owner. When you first start, you’ve got mojo. Your mojo is hustle, it’s sweat, it’s shine. It’s grind. You’re moving nothing to something. You’re out there making it happen.
You’re taking a concept, a product or a service and you’re saying, “Hey world…I want you to be a part of it.”
And it works. And it starts working better and better. Then one day you realize, that this is something real. This is something cool. It’s like giving birth. It’s the closest thing a male will come to it. It’s going to put some hair on your chest.
There’s so many things that are going to come to your during that first formation. When I went to get my business license, I went to the website. I did everything I thought was correct, right? I thought that after I went on the site and paid my $138 that I was going to come out with a business license. Little did I know that this was going to be a 3-week process.
We had signed a lease. We had money going out. We had product in the place, but we could not open.
We were able to make Craigslist sales, but it was still kind of worrisome. We thought about what they might do if they caught us.
You are trying to make money, maintain and get your thing going. It can be a problem.
Now. Let’s just say you were an employee and you’re going through all this stuff at once, like the job stress, the personal relationship stress and if you have kids, the kid stress? It can be a lot. That’s why many people just give up.
Many people think it will be much easier than it is. I’m going to give you some stuff that happened to me. I had five business failures before I was out of the military.
I was demoralized. I was depressed. I thought, none of this shit works. I didn’t realize it wasn’t supposed to work because I didn’t know how to do it.
There’s no shame in being ignorant, but it should be a sin to remain ignorant.
That’s one of the things I didn’t do. I kept pushing. I kept pushing. I kept learning. I kept changing things up. I kept looking at ways to make things better and I grew.
But, I’m going to give you some stuff from the more successful businesses.
I didn’t know what to do when you opened up a store. I did what I thought was correct. I went and I looked at the retail spot. I sat out there in my car and gaged the traffic a few times a week. It got a lot of traffic.
The road was super, super busy. What I didn’t know was that as people came down the road, the store was practically invisible. Nobody was able to really see it because they came down the hill and they were coming to a busy light with a lot of cars. You literally had to crank your head sideways. I had no clue.
We had to do all kinds of stuff to get people to come into the store. It was just insane.
I remember one time when there was something happening in the store and I could not put product in at the time, so I unloaded stuff in a row out in front of the store. I decided to tag it there, then put it back in the store when I could.
Little did I know that putting that stuff in the parking lot in front of the store was one of the biggest things I could do. That day was the first day we made rent in sales.
This is where it gets really stupid. It turns out you could only put stuff on the sidewalk. You couldn’t get much stuff on the sidewalk. Then neighbors would complain.
We just pushed it. We weren’t making money any other way. Then I figured out some stuff to increase Craigslist sales and stopped putting the furniture out in front of the store.
Another thing to think about is about your business license. If you don’t have an accountant, get one right away.
If you have a LLC business license set up as a single member LLC, it will be treated like a sole proprietorship. The only way to stop this from happening is for you to fill out some forms within the first few days after you form an LLC. Otherwise, you will be hit with a 35% tax plus 20% self-employment tax.
Now, that’s never happened to me. But I know people it happened to. It’s rough.
Get yourself an accountant. Find an accountant who works with people in your industry.
What can happen to you depends on who you are selling to a lot of the time. If you are selling business to business, there is a lot of fuckery there.
When you are selling business to business and you don’t know how to navigate getting a deposit and they want you to operate on a purchase order, you could literally be signing the death certificate for your business. When you get a large order for 80K to 200K using a purchase order, then it could be 60 to 90 days before you get paid. Many people don’t pay on time. So, you’re scrambling while you wait to get paid.
You’ll spend one-third of your time getting business. You’ll spend one-third of your time doing business. You’ll spend one-third of your time trying to get paid. That’s why all of the bigger companies have Accounts Receivable departments.
What I learned was not to do business with purchase orders. One bad month when people don’t pay, could put you out of business.
Part of the reason the first year is so rough is because you don’t know what you’re doing. There are just so many variables. I’m going to give you an example of something that happened to a friend. He had a great business plan, tons of cash and was all set up. Everything was going well. Then the regulatory environment changed. The law was changed. That cash went away fast. He was in the healthcare industry. He was out of business overnight.
Online, you can get in trouble with a Google penalty. They can change the algorithm and the next thing you know, 70% of your traffic is gone. When that happens, what are you going to do? You have to hustle on the fly.
Another thing people won’t tell you about your first year in business is that your idea could be perfect, but it’s going to take society a year or three or five to find you. You’ve got to keep doing it.
It’s a struggle. It’s going to take time. The first 2 or 3 years are going to be a bitch. If you can hang on, you’ll make more money on one day than you did in a year.
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