Are you a start-up owner who has just landed your first major client? Now you are probably thinking of hiring more employees, moving from your home office and taking on other expenses, but before you do....

Consider the following six major pitfalls in order to grow your business and move beyond the first client you obtain. Learning about such business risks will help you better position your new business for continued growth:

1. Hiring new employees before you have obtained more clients.

One big contract may be paying all the bills now, but if it is also using all of your staffing resources, you could be required to hire more employees to effectively handle any new clients you obtain.  Prior to hiring new employees, using your first contract as a learning tool could prove very beneficial to a new business owner.  For instance, you could use all you learn as a way to improve negotiations on your next contract, as well as, a basis for constructing subcontracting or employee agreements that best fit your process for servicing clients. 

2. Taking on new office space before your business is financially stable.

Moving your business from a home office into a more commercial space, means taking on additional operating expenses that your contract may not be able to cover when added to your payroll and your own personal expenses.  An office lease will require a long commitment,  therefore having a plan in place for a continued stream of income from your business, beyond your first client, will help ensure your business' longevity.

3. Expanding quickly without a solid strategy for handling growth.

 Too often, it seems that the benefits derived from having a written plan is underrated.  Without a well thought out written plan for how you will operate and grow your business in place, you could find yourself struggling to service clients, handle management issues and other responsibilities that comes along with running a business.   At startup, business owners should consider creating written internal policies for handling customers and procedures for providng its services, at minimum.

4. Putting all your energy and resources into one customer, makes it difficult to find the time to acquire more customers.

 As a business owner, particularly a start-up, you are often wearing many hats since you have to play all the roles in your business.  Having one customer that utilizes all of your company's resources, makes it challenging for you to play the role of sales, marketing, and financial bookkeeper, which are key areas to focus on if you plan to grow your business beyond your first client.

5. Overspending revenues gained from one contract, makes it difficult to "stockpile" some of the profits in order to keep your business afloat in-between contracts/clients. 

The danger in overspending is the most critical because often times start-ups do not think about what would happen should the contract end abruptly or is not continued after the established end date.  Leaving cash in your company, allows you to sustain your business while you are seeking out new clients and implementing your business strategy for growth, which takes time.  

6. Quitting your full time job before you've acquired more clients.

While entrepreneurship has its perks - offering flexibilty and freedom to plan your day and more, it also takes proper planning and time for it to build into a financially stable company that is able to support itself and your personal needs.  If personal investments into your business is still necessary to keep it operating on a month to month basis, it may not be time to quit your day job.  Keep working your plan and you'll get there soon enough.

In summary, positioning your business for success beyond its first client means avoiding the pitfalls below and having a concise written plan.  Additionally, having a solid understanding of the costs to running your business as well as maintaining your current lifestyle is also required in advancing your business.  You can get immediate help with your business planning and calculations by clicking the button below:

Some other blog articles you should consider are:

4 Reasons your business needs a CPA

Choosing the right type of business