Future Entrepreneurs Guide to Overcoming Financial Setbacks

Posted by Ronald J. Fichera Oct 03, 2022

According to research, 22% of businesses fail in the first year while 50% of businesses fail within the first five years. If you've recently closed a business, starting a new venture may seem impossible, especially if you experienced financial setbacks. However, there are ways to overcome your financial challenges. Here, the Ronald J. Fichera Law Firm explains how you can dust yourself off and start over.

Learn From Your Mistakes

Everyone makes mistakes. The best way to avoid making future mistakes is to learn from them. Don't let shame prevent you from talking about what went wrong. Learn to live below your means. Avoid accumulating unnecessary debt.

Keep Your Expenses Down

Choose a business that doesn't have high start-up costs. Online businesses are usually the least expensive to start because you don't need to pay for a physical location or purchase a lot of equipment. Only spend money on things that will help you get new customers. Look for free tools that can help you run your business more efficiently.

Examples of tools to use include website creators, email marketing software, accounting software, and free office suites. You can edit PDFs online with a free tool that makes it possible to sign documents without printing anything, saving you from purchasing a printer, ink, and paper. All you need to do is upload the file, make your changes and then download and share your document.

Create a Marketing Plan

Marketing is critical for any new business. You can keep your marketing expenses down by using free tools, such as Adobe, to create a logo to use on all your marketing materials. Social media is a good low-cost platform to use for marketing your business. Create shareable content to get your business noticed and get social media users and influencers to do your marketing for you.

Start With a Side Gig

If you don't have the funds to launch your business yet or you can't afford to quit your day job, consider starting with a side gig. For example, if your goal is to start a business selling custom leatherwork, you could open a shop on Etsy or Shopify and sell a few pieces at a time. This allows you to bring in some extra money and start building a customer base without making it your full-time job.

Enhance Your Skills

While you are working on shoring up your finances, take steps to improve your skills so you will be ready to hit the ground running. You could take classes at a community college, pursue a degree online or utilize free educational resources on the internet.

Research the Competition

Before you launch a business, it is important to understand who is already in the marketplace and what you can do differently to compete with them. If too many competitors are already doing what you want, consider finding a different niche or changing your business idea.

Use Freelancers or Temp Staff

Hiring and training new employees is highly expensive, and in your fledgling stage, the last thing you want to do is over-extend. However, you may also need more than one pair of hands on the job. To minimize the overwhelm without overspending, it helps to connect with freelancers or even a staffing firm. Recruiters will need top-dollar compared to a staffing agency so make sure you know the difference when you start looking. A staffing agency can take care of all the particulars when it comes to vetting, so all you have to do is determine whether someone will be a good fit. And who knows? You may end up finding someone you bring on full-time down the road.

Take Reasonable Risks

Starting a business without taking any risks isn't possible, but keep your risks reasonable. If you borrow money to get your business started, do not borrow more than you can afford to pay back if your business goes under or takes longer than expected to become profitable. Make sure you have a solid business plan and that you do your research before you get started. Have a backup plan and another source of income.

Past financial hardships can make starting a business more challenging. However, if you take the right steps, you can overcome these challenges and launch a successful business. So keep your expenses down, both with hiring, tech and overhead costs, create a solid marketing plan and take risks that feel right.

The legal experts at Ronald J. Fichera Law Firm provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Connect with us today for a free consultation! 610-768-9255

This article was provided by Lucille Rosetti, a frequent contributor to our Blog,  and brought to you by the Ronald J. Fichera Law  Firm, where our mission is to provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Our firm is committed to delivering efficient and cost-effective legal services focusing on communication, responsiveness, and attention to detail. For more information about our services, contact us today!

This is not tax advice and should not be construed as such.  Please seek professional tax services for more information and advice that will apply to your specific tax situation.