How to Survive Your First Year in Business

By Sherry Walling

A record-breaking 5.5 million new business applications were filed in 2023 in the U.S. Despite this rosy figure, many businesses do not survive beyond their first few years—and often it is because they are not prepared for the complex reality of being a business owner.

The truth is, finding the balance between pursuing a passion while tackling critical business operations, like paying employees, accessing capital, or getting paid, can make or break a great idea. From my work with early-stage entrepreneurs, a few things stand out about businesses that are able to find this balance and ultimately succeed.

So how can new business owners manage the thrill of entrepreneurship while also staying on top of the nuances of business operations that will allow their startups to thrive? The following are three tips that I recommend new entrepreneurs keep top of mind as they navigate their first year of business.

How to survive your first year in business

1. Be prepared to wear many hats

When you start a new business, you may have some part-time staff or family members helping you get your enterprise off the ground, but it's unlikely you will have a large full-time staff to support you. More likely you will be running the entire show yourself, and you'll need to be ready to tackle a variety of jobs that may not be your areas of expertise—whether that’s marketing, HR, accounting, social media, or something else.

Consider Melissa Skaggs of Willard, Missouri, who quit a teaching job and threw herself into building Hive of the Ozarks, a café that serves as both a community hub and career launchpad for people with differing abilities.

While getting The Hive off the ground, Melissa was overwhelmed by the amount of paperwork and back-office operations that her business required. She said she felt like she was in a never-ending loop of managing deadlines and paperwork for things like employee payroll or processing vendor invoices—things she never had to worry about during her decades-long career as an educator. However, if she hadn't taken on these mission-critical operations, The Hive never would have been able to open its doors.

In my opinion, the biggest thing is to not let yourself get paralyzed by the uncertainty you feel as you learn new processes. Give yourself some grace, but also take action! Be ready to take on these challenges directly—whether that means investing in training for yourself, hiring staff, or finding technology that can help. With patience and action, you will figure out what makes sense for your business.

2. Understand the power of community

Being a new entrepreneur can sometimes feel lonely. Digital businesses may especially struggle at first to connect with their community. After all, with an online business, there isn’t a physical storefront, a road sign, or a flashy grand opening party like those brick-and-mortar businesses have to help them to connect with customers and stay top of mind.

All businesses, however, have a community—even if it's mainly online. Social media has become a great place for companies to showcase their brands and create a place for loyal customers who truly care about a business's success. In addition, it can be a great way for new entrepreneurs to connect with peers, allowing them to share advice and learn from one another. Once this trusted community is in place, you can begin to utilize them by asking valuable questions, listening to feedback, and sharing timely business updates.

Donyale Walton, founder of Hoop Mobb, an online jewelry store, attributes a lot of her success to creating a Facebook community where she can engage with the people who are buying her products. Having access to her audience and the ability to get their feedback on new designs and what products to restock helped Walton exceed her goals and generate over $325,000 in revenue during her first year in business.

3. Get ready to hear no—but keep fighting anyway

As an early-start entrepreneur, you need the determination to power through the many noes that will come your way. Whether it's from those around you who don’t believe in your vision, or from key investors and potential business partners, you need to be prepared for these hurdles. By anticipating challenges, you’ll be able to emotionally prepare for them. Additionally, this allows you to have a plan to overcome the “no” without allowing the negativity to derail your plans.

Jamahl and Natalie Grace started their business, Grace+Love Candle Co., after discovering a pandemic hobby of candle making as a family. Despite their business having strong early sales and Jamahl’s robust finance background as an MBA, the couple was surprised when they were repeatedly turned down for business loans by traditional banks. Rather than being discouraged or losing faith in their vision for growing their candle company, the Graces turned to alternative funding sources, eventually securing a loan based on the business’s sound financials that allowed them to scale.

This example shows why it’s so important to power through setbacks. Like Natalie and Jamahl, you’ll likely hear plenty of “noes” along the way. However, by adapting and exploring Plans B, C, and D if needed, you will be able to achieve your business goals in the long run.

Running a successful startup

The first year of a new small business will likely feel overwhelming at times—whether it's from the thrill of following your passion and finally taking the leap into business, or from confusion about unfamiliar business operations. Just remember: in entrepreneurship the highs are high and the lows are low.

By being able to tackle multiple functions, tapping into the power of those who support their business, and having the faith to fight through setbacks, early-stage entrepreneurs can set themselves up for success in their first year of business and beyond.

RELATED: Do You Have a Business or a Hobby? How to Find Out—And Why It Matters