Should I hire in my first year?

Only when the work is consistently there and the price carries a wage with something left. Hiring to grow is different from hiring because you are drowning. The second usually means the price is wrong.

Do I need an accountant in year one?

For setup and your first year-end, it is usually money well spent. Bookkeeping you can often do yourself at first; tax filing and structure are worth a professional.

How much money should I start with?

Enough to cover a few months of fixed costs and your own living costs while the first invoices are paid late, because some will be.

← Answers

What should I focus on in my first year in business?

Three things, in this order: prices that leave a real margin, knowing your cash position every week, and keeping what is owed to the government separate from what is yours. Most first-year businesses that fail were busy, not idle. They were working at a price that could not carry them, and found out when the money ran short.

Busy is not the same as working

A full calendar in year one feels like proof. It often means the price is low enough that everyone says yes. The test is simple: after materials, your time at a fair wage and overhead, is anything left? If not, more work makes it worse, not better.

Know the cash every week

Not the profit, the cash. What is in the account, what is owed to you and when it will land, what has to go out in the next few weeks. Fifteen minutes on the same day each week catches the squeeze while there is still time to do something about it.

The money that is not yours

Sales tax collected and payroll deductions held belong to the government; you are holding them. Put them in a separate account as they come in. A first-year owner who spends them finds out at the worst possible moment, with penalties on top.

Pay yourself something, on a schedule

Taking whatever is left whenever you can hides whether the business actually works. A modest, regular amount tells you the truth early, and an owner who cannot pay themselves anything for long is looking at a pricing problem, not an effort problem.

Write down what you said you would do

Nobody checks on an owner. The things decided with real intent in month two, raise the price, chase that invoice, stop doing that kind of job, are still undone in month eight unless something asks. That is the gap a regular review, a peer, or an advisor fills.

Also asked

Should I hire in my first year?: Only when the work is consistently there and the price carries a wage with something left. Hiring to grow is different from hiring because you are drowning. The second usually means the price is wrong.
Do I need an accountant in year one?: For setup and your first year-end, it is usually money well spent. Bookkeeping you can often do yourself at first; tax filing and structure are worth a professional.
How much money should I start with?: Enough to cover a few months of fixed costs and your own living costs while the first invoices are paid late, because some will be.

Written for your trade

This is the kind of thing Solomon works through with owners using their own numbers. See how it works →