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Many entrepreneurs wonder what to do when they get to this point in their businesses. They want to excel in the sale of their products or services but it seems as though a force greater than theirs is stopping them from achieving all they have envisioned for the business. This might be true in some instances, but entrepreneurs also have a hand to play in the success of their business. To begin with, they must understand that a business is like a little child. It requires time and patience to be able to grow to the point where it becomes profitable enough to pay off debts and expand. Startup founders must have the firm grip that in order to scale the third year, they should not and cannot place demands on the company’s resources from the very first year. This would cause strain on limited resources and reduce the chances for capital intensive expansion. Secondly, companies should keep salaries and every other unnecessary expenditure to the barest minimum. This includes expenditures that seem important but in reality are just the board itching to spend money. While on the other hand salaries are common incentives used to attract employees, people should be able to come to the company to work because of the vision first before the pay. This is because there would come times when things are turbulent in the first three years and if employees were attracted by large salaries, they would not take lower salaries or a slash in their monthly salaries lightly. They may even form a union and cause trouble when the going gets hard. This might seem counterintuitive as many companies are trying to find capable hands. Yet, it is the best bet to scale that dip that comes around in the third year.
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The next hurdle a company must face and overcome to break through the third year benchmark is to work tirelessly on investments. While the business is making the initial profits, not all the monies are meant to be spent. The young company should move resources into investments in other older and more stable companies that would pull profit to the companies name. This would act as a buoy for whatever risk the company wants to take to push through the third year margin. This investment goal can be to cover salaries or leaks. Whatever the goal, there should be external investments aside from insurance. In conclusion, the first three years of a company would demand a lot from the founder and other board members. Companies hands must be ready to go over and beyond in terms of sacrifice to get the company past the first three years. Featured Image Source: Tesserryan
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