Do you think you know how to start a small business? Read this and think again.

Starting a new business is exciting, empowering, and fun. But it can also be difficult, confusing, and stressful. Statistics show that only 75% of businesses survive their first year, and only 50% make it to five years.

Not everyone knows how to start a small business without failing in the first year. But the good news about that statistic is that it’s not random chance. Patience, planning, and determination can have a big impact on your likelihood of success. Your attitude and decisions can propel you to the five-year mark and beyond!

Here are some of the factors you need to keep in mind to successfully survive the first year as a small business owner!

It’s hard to chart a good course if you don’t have a clear idea of where you’d like to end up. That’s where a business plan comes in. Even if you aren’t applying for funding or a loan, your business plan keeps you accountable for your goals and aspirations for your business.

But creating a business plan that’s too rigid can cause problems too. Things change fast in the world of small business owners, and a business plan without flex blinds you to opportunities you aren’t ready to imagine when you’re first laying out your course.

Keep your business plan clear and specific, but revisit it often to look for new opportunities and directions.

Cash flow management can be a major stumbling point for new small business owners, especially when it comes to managing expenses. Watch your expenses like a hawk during your first year in particular, to look for patterns. Try to account for every expense, no matter how minute.

Now it’s time to get strategic. What bills can you move around to make cash flow easier? Can you adjust your payroll schedule to ease the burden when cash is tightest?

The other aspect of cash flow is being able to predict and manage revenue. To do that successfully, you’ll need to develop a successful sales process right away.

Your sales process includes:

A bottleneck at any point in this process can cause big problems for your cash flow. In particular, don’t overlook the start and finish of the process: gathering new leads, receiving payment, and customer retention.

Make sure your sales process can scale up as you grow. Here’s a hint: if it takes lots of one-to-one labor from you, it’s not scalable.

Many new small business owners don’t think much about the software they use to run their business. They start out using their smartphone and Excel spreadsheets, and add new tools as they need them.

Unfortunately, this approach encourages a reactionary mindset that can stunt the growth of your business long into the future. It’s much easier to grow into a software solution than to force yourself to fit into a system that’s too limited for your needs.

This is why I recommend launching your business with an integrated toolkit of modular business tools. Modular toolkits let you start out with just the tools you need when you’re beginning, but have lots of room to grow and expand as you realize new possibilities and new needs for your business.

I’ve devoted my career to creating a software toolkit that’s specifically tailored to the needs of small businesses. For me, that means a solution that can grow with your business.

Entrepreneurship can be a lonely journey, especially when you’re first starting out. Without a boss, peers, or even employees, it’s easy to feel isolated. Worse, you run the risk of getting caught up in your own thought patterns, with the result that you might miss opportunities that are right before your eyes!

Networking is a great way to build up a community of peers, who are at similar stages of the entrepreneurial journey. You can learn from each others’ mistakes and successes, encourage each other, and provide that outside perspective that’s so valuable for new entrepreneurs.

You also get the chance to meet potential customers, as well as possible partners and mentors. All four of these types of connections (peers, prospects, partners, and mentors) are incredibly important for new business owners, and can be the key to surviving past that coveted 5-year mark.

Has your business survived past the 5 year mark? What are your tips for success?

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