What New Business Owners Forget to Formalise in the First Year

17 December 2025

The first year of running a business as a fearless entrepreneur is honestly a blur. Well, not just the business aspect, like the whole year itself is just one giant blur because so much is happening nonstop, like before the official launch, and probably tenfold once launch day actually happens. Okay, so what? 

Well, it’s like, one minute there’s excitement and adrenaline, the next there’s low-key panic, and yeah, basically it’s six months later, and everything’s moving way faster than expected.  Which, of course, is a good thing; it means people like your business, you’re getting customers. That’s the whole goal here after all.

But right in the middle of all that forward motion, a lot of important stuff gets quietly skipped. And no, it’s not like any of this is because it doesn’t matter, but because it doesn’t feel urgent when everything else feels louder. Like, a lot is going on in your life, so it’s not like you’re going to know or realize this in the first place. And for a lot of business owners, the first couple of years, they’re literally still working their full-time job while running their business at the same time, too. 

Everything Feels Casual

Early on, almost everything feels informal. As in, the conversations turn into decisions. Well, that and decisions turn into routines. And before anyone really notices, the business is running on assumptions. Clients know what’s included, right? Partners are aligned, obviously. Everyone understands who’s responsible for what, yeah, sure. But of course, most of that confidence is built on memory and good intentions, not anything written down. And okay, that works for a while, well, until it doesn’t, of course. 

Verbal Agreements Feel Fine Until Memories Don’t Line Up

Which sounds really weird, because in a lot of countries, verbal agreements are seen as real agreements, just like a contract on paper. But even so, the problem here isn’t the legitimacy; it’s the memory aspect. In the beginning, trust carries a lot of weight. Like, a quick call, a friendly email, a “that sounds good to me.” It feels efficient and relaxed, which is exactly what people want early on.

But with all of that said here, memory isn’t reliable. No, really, like people remember conversations differently, especially once money, deadlines, or pressure get involved. What felt clear at the time can suddenly feel vague. And now, when there’s nothing written down to point back to, even small misunderstandings can turn into drawn-out conversations that drain energy fast. Yeah, it gets frustrating quicker than expected.

Space Gets Serious Farly Fast

Well, a lot of businesses start wherever there’s room. Like, it’s usually a spare bedroom, a kitchen table, a garage, a shared workspace, or a borrowed office. You know, it’s standard, and yeah, obviously, that’s completely normal. Like, there’s nothing wrong with any of that, like Amazon started in a garage, so you know it’s fine to run a business at home.

But once that space becomes part of daily operations, expectations change. Who has access? Who’s responsible for what? What happens if the arrangement changes? That’s when things can start feeling awkward. Like, if you’re renting out buildings, for example, and being a landlord is your business, well, you still need to have written agreements, you still need to keep track and have a working system. 

Like, you basically need to have an online lease agreement in place early on so you can just outright prevent any awful situations, like the really uncomfortable ones. Take care of this ASAP!

Everyone Does Everything Until that Becomes the Problem

Yes, yes, it’s all about wearing multiple hats. And of course, in the first year, roles are blurry on purpose. Everyone jumps in wherever needed. It feels flexible, scrappy, and kind of exciting, like everyone’s all-in together. If it’s you, and literally only you, yes, it’ll be horribly exhausting. But now, with that part said, that flexibility has a shelf life. When responsibilities aren’t clearly defined, things start slipping. Think about it; tasks get duplicated. Other things don’t get done at all, and no one’s quite sure whose job something actually was. But yeah, over time, that creates quiet frustration that’s hard to name, because technically no one did anything wrong.

Growth Quietly Raises the Stakes

Alright, so one of the biggest surprises in the first year is how quickly things scale. Yes, to a degree, this is great, you’re growing, but it’s more about the speed and what you can handle. Like, a few clients turn into many, meaning that small decisions start carrying bigger consequences. What’s the problem, though? 

Well, what worked early on stops holding up. Informal systems that relied on memory or goodwill start cracking. And now, with that part said, this is usually when people think, “Okay, this probably should’ve been sorted earlier.”

“We’ll Deal With It Later” Usually Means “We’ll Deal With It Stressed”

Have you ever heard of the phrase “Tomorrows Me will deal with this”? Yeah, it’s a horrible mindset that no one should have. You’re pushing off issues that will only get worse, just you wait. But it’s true, like, there’s a common mindset early on that everything can be fixed later. And yeah, sure, that’s technically true. 

But fixing things after problems appear costs way more time and energy than setting them up properly from the start. No, you need to protect the momentum, and taking things head-on rather than pushing it off is really how you’re going to do it. 

Structure Doesn’t Kill Creativity

Again, it’s about keeping up that momentum here. So, a lot of people hesitate to formalise things because they’re worried it’ll make the business feel stiff or corporate. That fear makes sense, well, it kind of does, but only kind of. But with all of that said here, structure actually frees things up. No, really, it actually does. 

Like, you’ll have clear agreements to reduce second-guessing. Everyone knows where they stand. And it’s really going to help that decisions get easier because the groundwork’s already done. But really, that clarity creates space to focus on growth instead of constantly putting out fires.

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