The first year of a new business is an exciting time. There’s so much to do, it can be easy to get wrapped up in the day-to-day. If you’re not careful, you could lose sight of the big picture.
Setting goals is important for any business. But goals setting is especially important for new business. Goals will help drive your business in a the direction you want it to go.
Having some clear goals will also help you use your time and resources wisely knowing there is targets you are trying to hit. To stay focused, it’s important to make business goals for your first year. Success for a first-year business is built upon small, but critical, goals. These might feel like baby steps, but they’re important. Here are 5 business goals for your first year.
Narrow Down Your Target Market
Have you given much thought to who your product or service is geared toward? If not, now is the time. During your first year of business, you should think about who your target market is. Very simply put, your target market is the group of people most likely to purchase what you’re selling. This can be driven by their needs, their personal beliefs, their sex, and more.
It’s highly unlikely that all people will want what you’re selling. Get specific about what your business offers the community, and how you can meet your prospective customers’ needs. How do you fit into their lives? How can you make each customer’s life a little better?
For example, does your business meet the needs of hungry vegans who don’t want to cook? Or men who want a fast haircut on a walk-in basis? Know who you target customer is so you can best meet their needs.
Clarify Your Goals (Short-Term, Medium-Term, and Long-Term)
Once you’ve clearly established the type of customers you’re targeting, you’ll want to think about the future. Don’t worry – you don’t need a crystal ball and you don’t have to be a psychic! But, you need to have a general idea of what you want for the business.
First, create some short-term goals for yourself. In the first year, some short-term goals can include:
- Adding Customers
- Recruiting Employees
- Establishing an Online Presence
- Creating a Profit
- Establishing Processes
As time goes on, you’ll be able to determine what is working and modify it.
Next, you’ll want to think about the medium-term. After your business has been established for a year, what new milestones will you want to celebrate? What would growth look like at that point? Medium-term goals might include:
- Acquiring More Customers
- Launching a New Product
- Increasing Profit Margins
Finally, don’t hesitate to think long-term for your new business. After your business has celebrated its five year anniversary, what other milestones will you look forward to? What other achievements will you reach? The sky’s the limit!
Build a Customer Base
It’s easier to keep a current customer than to find a new customer. But every new business must start somewhere. Once you make your first sale, repeating that process allows you to slowly but surely build your customer base. Knowing your target customer and having your product priced properly is part of the formula that will allow you to make sale after sale, eventually building your customer base.
It’s important to look beyond the sale, though, and this is where some businesses miss opportunities. You’ll want to look for chances for repeat sales with each customer. You’ll also want to look for opportunities for your current customers to refer their friends to you.
For example, a salon or spa may see a client, and the client leaves. Or, they may see a client, and offer the client the chance to schedule their next appointment on the way out. Which approach is best? The second approach lets you lock in repeat business, as the client might neglect to book another appointment. Taking the second approach will increase your profits.
It’s also important to manage the online reputation and presence of your business. Customers seek out businesses that they trust to do quality work, regardless of the industry. If a customer has identified a problem, be proactive about correcting it. Listen to customer feedback so you can build your customer base.
Figure Out Which Business Model Works
There have been many businesses that have launched trying to master one type of business model, only to find another model works best for their business. For example, Paypal did not start as a payment processing company. It began as a security software company for personal assistant devices (PDAs). When that didn’t pan out, they pursued the route of becoming a money transferring business. Once they figured out which business model worked best, the pursued it with ferocity.
One of the things new business owners should understand is that business is not an exact science. Things change and evolve constantly and you will need to change as well. And, plans also change. You may have started a business with the hopes of making money selling a single product. However, you may end up finding that a subscription business model works better for you.
During your first year in business, be on the watch for what works and what doesn’t. Pay attention to what your customers like about your product or service. Get feedback from them, not only about the product, but their overall buying experience. Over time, you may find that there is a better model for your business that you can transition to.
Manage Cash Flow Well
During your first year, it’s critical to manage your cash flow well. One of the reasons why many new businesses fail is because of poor cash management. What money is coming in? What money is going out? Exactly how much are you spending on the cost of utilities and labor?
When you manage your cash flow efficiently, you’ll be able to see the true cost of business and the true amount of profit or loss. Monitoring costs will allow you to spot opportunities to decrease costs where necessary. You may be able to negotiate with vendors, or change vendors where appropriate.
Monitoring your cash flow is important because it will allow you to see how far you are from becoming a profitable business. It will also allow you to see any changes that you need to make if your business is burning through cash.
Figure Out Which Marketing Strategy Works Best
There are endless ways to market a business. Billboard ads, direct mail campaigns, door-to-door, internet ads, radio ads, social media, TV ads, word-of-mouth, and even no advertising at all are all strategies that businesses use. Each has their own reason and their specific target customer. You’ll need to find out which marketing strategy works best for your business in order to maximize your profits and not waste your efforts.
Start Thinking About Your First Hire
The decision to hire your first employee can be a significant milestone in your entrepreneurial journey. You may not be ready to begin building your team during the first year, but you may begin to think about the best time to bring on your first hire.
Assess your workload and identify if it is becoming unmanageable for you alone. If you find yourself struggling to keep up with tasks or falling behind on deadlines, it may be time to start considering hiring additional help. You’ll also need to analyze your financial situation. Hiring an employee means taking on additional expenses such as salary, benefits, and taxes. Ensure that your business has the financial capacity to support another employee before making any hiring decisions.
Lastly, consider the type of work that needs to be done. If you require specific skills that you do not possess or do not have the time to learn, hiring someone with the necessary expertise may be essential to your business’s success.
The first year of starting a new business is an exciting time. Creating goals for this time can position entrepreneurs towards a path of success. Remaining focused on the customer and being cost-conscious can help ensure a profitable future.