The first year of starting a business is a crucial one. If you make it past the one year mark, you could be onto a good thing – especially if you’re lucky enough to have healthy profit margins and plenty of room for growth.
7 lessons for the first year of business
The first year of starting a business is a crucial one. If you make it past the one year mark, you could be onto a good thing – especially if you’re lucky enough to have healthy profit margins and plenty of room for growth.
So, you have a plan, a product, and a pulse – what more could you need? Turns out, plenty. Here are seven lessons every entrepreneur should learn from to avoid common business mistakes, brought to you by the business experts at 1st Formations, the UK’s leading company formation agent.
1. Your idea isn’t everything
You may believe success hinges on having a great idea and creating the “next new thing”. But this is just not true in 99% of cases. There are tons of business models and strategies for launching a successful business. You don’t need to reinvent the wheel to get started. And that idea you’re waiting for? You’ll be much better placed to launch a business with some experience under your belt.
The real secret is in execution. Remember: perfect is the enemy of good. The sooner you start with a tried and tested model, the better your chances with a potentially riskier idea later down the line.
2. Cash flow is your lifeline
Profit looks nice on paper, but it’s cash that keeps the lights on. Forecasting, regular invoicing and knowing where every pound goes can save you from sleepless nights.
Many promising businesses crumble not because they weren’t profitable, but because they ran out of cash at the wrong moment. A big client paying late or an unexpected bill can derail your operations if you don’t have liquidity on hand. That’s why tools like cash flow forecasting software and automated reminders for unpaid invoices can act as a crucial safety net.
It’s also worth reviewing your payment terms and expenses regularly. Can you negotiate faster payments from clients or better rates from suppliers? Little tweaks in timing can make a huge difference to your working capital.
3. You can’t (and shouldn’t) do it all
Wearing multiple hats is definitely part of the journey for many early businesses. However, it needs to be sustainable. You can’t be CEO, accountant, marketer and sales person all at once forever. You’ll hit burnout sooner or later.
Make sure you prioritise the most important parts of managing the business at an early stage. Delegation, with a cofounder or early employee, is vital for growing a business sustainably.
Trying to juggle every role might seem like a badge of honour at first, but it quickly becomes a bottleneck. You’ll spend more time putting out fires than building for the future. Outsourcing tasks like bookkeeping, social media management, or web development, can free you up to focus on your strengths and the areas that actually drive growth. Think of it as an investment, not an expense.
As your business grows, building systems and delegating effectively will make or break your scalability. Bringing in people you trust early on creates a foundation for teamwork and shared accountability. Plus, letting go of control a little at a time helps you develop leadership skills that will be essential as your business expands.
4. Customers are your compass
Feedback is gold dust, especially at early stages. Ask customers for feedback and use it to iterate your product or service to maximise customer satisfaction and value for money. Ask yourself: does this product actually solve a problem?
Keep your spend low and only produce what you need. For example, if your business is manufacturing laptop cases, make sure your sizing, materials, design, and price have a market fit. The last thing you want is to order 10,000 laptop cases from your manufacturer only to then realise there’s a major flaw with your product or it doesn’t suit your target market.
Get a prototype and then get as much feedback as possible before committing to large orders. This could help save you from a massive headache later down the line.
5. Build processes early
Setting up repeatable systems for onboarding, payments, or marketing saves hours later – and your future self will thank you.
This will also help establish your company culture at an early stage. Things like employee handbooks and other onboarding documents let your early employees understand and help establish your company culture.
You should also look to create documented workflows for repeatable tasks as soon as possible. This will make training up staff much easier and create accountability for processes, including expected outcomes and time management.
6. Failure provides valuable data
Every misstep reveals something valuable. The sooner you view mistakes as experiments, the faster you’ll grow. Failure isn’t fatal, but stagnation certainly can be.
For example, if your business is in clothing, an early mistake could be using materials that are far too costly for your targeted price point. You only have to make this mistake once to learn from it. There’s no shame in throwing something out and going back to the drawing board. Failure will help to inform your future decisions and lead to better outcomes.
7. Community makes the climb easier
Surround yourself with other founders from the business community. Their support and advice, and will help keep you grounded when things (and they will) get difficult. Being a founder can feel lonely at times, but it doesn’t have to be.
No one starts out knowing all the answers, but there’s always likely to be those who’ve come before you. Read books, join webinars and meetups, and do all you can to make connections, expand your knowledge and strengthen your network.
Taking the first step
If you’re taking your first leap into entrepreneurship, set yourself up properly from day one. Register your company with help from formation pros – so you can focus on building the business, not battling paperwork. You also get a UK business address in London’s Covent Garden and plenty of early stage support to guide you on your entrepreneurial journey.
