Personal investments are a given when setting up a business. In 2020, 804,398 people set up a business in the hope of reaching success. Unfortunately, around 80% of companies fail within the first year of trading. Failure is not necessarily due to one particular factor.
The market is saturated with businesses clutching at any chance to gain a customer. To ensure you continue to trade well past the 12-month mark, here are some of the personal investments you can expect to deal with and how they will ensure your success.
Financial investment is an unavoidable demand of a startup. There are two main ways to fund a startup. Out of your own pocket, or out of your pocket but because the money has come from somewhere else. Startup loans are incredibly common, but they are not always the easiest to acquire.
Before a bank lends the money, they want to know the business plan, personal debts, market figures, and how long you intend to take to pay the money back. Some banks will even refuse to give out loans to people who already have bad personal credit. That seems to be the theme with many lenders at the minute.
Due to the recent pandemic, loan companies are now cutting back on who they lend money to and how much they lend. If you have bad credit, this could impact your ability to secure a loan. There are bad credit personal loans that could swoop in and save the day. 40% of adults admit to missing debt payments which is one of the main reasons for bad credit.
Having bad credit won’t stop you from starting a business; it just means you will have to explore other avenues, such as a bad credit loan.
You will likely incur personal losses throughout the first few years as a business. Businesses tend to require ongoing investments to stay afloat.
All Your Time
Time is perhaps the biggest personal loss that you will incur, especially in the beginning. If you Google interviews with some of the biggest business tycoons, such as Bill Gates and Elon Musk, they reference how their life revolves around their business. They also discuss how much time is needed to nurture a growing business in the first few years.
Sometimes it can be hard to find a work-life balance. Many business owners find themselves working through until the early hours of the morning replying to business emails, acquiring new customers, or evening designing products.
Although time is a huge personal investment that you can’t escape, there are ways of managing your time better, so you feel like you have a better balance between your business and your time. Here are some top tips:
Checklist Your Day
Checklists are an excellent way of keeping yourself in check, believe it or not. It’s so much easier to keep track of the things you have to do in the day if they’re written down, and you allocate a specific time to do it. A study conducted in 2015 by the American Economic Journal found that businesses that used checklists saw a 20% increase in revenue. Not only could checklists improve your productivity for the day, but they can boost your sales as well.
Start The Day Earlier
It’s a well-known fact that you’re far more productive at the start of the day. Our brains are hard-wired to associate the end of the day with downtime, so it’s no wonder why it’s so hard to get work done later into the evening. If you take the time to research the morning routine of some of the wealthiest business people in the world, they start their day between 4 and 5 am.
Time To Learn
Nobody knows everything there is to know about business. One of the big appeals about running a business is the constant learning and adaptation involved. It keeps things interesting. If you didn’t like education beforehand, you will learn to love it through the years of owning a business. No matter what industry you’re in, you’ll find there’s always something new to learn.
Running a business will force you to learn new market trends, new methods of attracting customers, new ways of marketing your business, and so much more. There are plenty of educational avenues to explore. Here are some of the best:
- Marketing events
- Business conferences
- Business masterclasses
Those are, to name but a few. There are plenty of avenues to explore if you want to absorb as much business knowledge as you can.
To be part of the 20% of businesses that succeed, you must find ways to find a balance between personal investment and personal gain. Typically, a business won’t turn profitable until after the first 12 months of trading. Expect a lot of personal investment with little return in the first 12 months, but expect it to be more than worth it if you become profitable.