By Amine Rahal, CEO of IronMonk
Running a business is tough, especially when it's your first. Other than heavy competition, lack of cashflow or poor marketing, I strongly believe that one of the reasons that 90 percent of small businesses fail in the first few years is due to a lack of organization and planning early on.
The reality is that as an entrepreneur, you're on your own. If you don't have a mentor or any business training, it's even more challenging. And don't expect the government to provide you with any help when you set up your new company. They'll simply collect the fees and hand over your business registration papers, then knock on your door when tax season comes around.
Build your reputation early on by working for free.
I know you don't want to hear this, but hear me out. I struggled to sign my first big client. It took me a full year of 80-hour weeks to finally ink a solid deal with a major player. In hindsight, I realize now that the main reason companies were reluctant to sign with me was that my company had no track record. The lack of reviews, testimonials and case studies was hurting me badly. When potential clients Googled my brand name, nothing of value was showing up. When they asked to see examples or case studies, I was showing them work that I did while employed at other companies. My company itself didn't have much to show at that point.
Let's face it, you're less likely to eat at a restaurant with zero reviews than one with dozens of five-star reviews. Same goes with any type of business. If you want to build trust and a solid reputation, and you are struggling to find new clients or customers, consider offering your product or services for free to a few clients in exchange for their reviews or testimonials. Make sure you only offer this when you are 100 percent confident that you can meet and potentially exceed the client's expectations; otherwise it will backfire. Over time, you will gather great reviews and even be able to build strong case studies to show off to new clients.
Ask yourself if you really need that fancy office space.
Commercial rent is one of the most expensive overhead costs for any business. The question you have to ask yourself is, do I really need it when I'm first starting? There is a reason today's biggest entrepreneurs started out of their apartments or dorm rooms. When your business is also your home, not only do you save a lot of money from not having to pay additional rent, but you can also write off a lot of costs like your internet, electricity, office equipment, etc.
If you need an office to occasionally meet up with clients, rent one. There are plenty of companies that rent office space. You also have the option of renting a co-working space. When I first started, I rented a desk at a popular co-working space for $250 a month, which included free use of its professional meeting room for a few hours per month.
Take charge of your finances early.
We entrepreneurs tend to hate accounting and bookkeeping, but the reality is that if you don't get ahold of your finances very early on, you'll suffer later. Separate your business and personal expenses from day one. Use a tool like Shoeboxed or Receipt Bank to track all of your receipts. Use invoicing software to bill your clients. Make sure you are aware of all your tax filing responsibilities.
If this all seems overwhelming -- and trust me, it can be -- hire someone or outsource it to a third-party firm. It took me three years to finally hire an accountant and bookkeeper because I thought I could handle it all on my own. The reality is, I did a poor job at it and lost a lot of money in the process -- a lot more than I thought I'd save by not hiring someone to take care of this stuff. Many accounting firms have packages that include both bookkeeping and accounting for very reasonable prices.
As an entrepreneur, think five years ahead. Ask yourself the question, what could hurt me five years from now? Being financially unorganized is a big one and will backfire come tax season. Not caring about your company's reviews can also hurt you. Your actions today have to map out to where you want to be in five years.
Tech entrepreneur & writer. Amine is the CEO of IronMonk, a digital marketing agency, and head of strategy at Nebbex, a blockchain protocol.