Nine Tips to Help Your Small Business Grow in the First Year
Starting a new business is scary and exciting at the same time. Figuring out ways to grow and not fail in that first year takes time, perseverance and dedication. If you’ve never run a business before, you’ll also deal with the learning curve of accounting, paying your own taxes, and hiring and firing employees. Amidst all that, you must also find new customers and keep the ones you have coming back for more.
You’ve probably heard all sorts of different business failure rates. The government estimates that around 20 percent of small businesses fail in the first year and 30 percent in the second year. If you want to be in the 80 percent that doesn’t fail, you need to put some measures in place that allow you to thrive and continue forward into year two and beyond.
1. Have a Plan
Start your year with a plan in place for everything. Create a marketing strategy, set goals for sales, figure out how you’ll find the best employees with the skills you need, and know how you’ll handle any setbacks. Your big picture will change as the year moves forward, but at least you’ll have a method for handling major issues.
2. Hire Amazing Employees
When you’re just getting started, you may not be able to hire many employees. But make sure the ones you do bring aboard are the absolute best you can afford. Pay them a living salary so they stick with you and invest in training and building them up. Any time or money spent on teaching workers new skills benefits your company as they apply those skills at work.
3. Invest in Technology
Technology is increasing at a rapid pace and your business needs to keep up. Invest in cloud computing, mobile apps, and the best IT staff out there. You don’t have to hire a full-time IT staff, but you can hire contracted workers to handle your technology tasks. As an added bonus, you’ll save time, because the IT person is more likely to know what types of software and systems work best for your particular business. You won’t have to research what’s out there.
4. Invite Family and Friends to an Event
Kick-off your business (or restart it) by reaching out to your network of family and friends in your immediate area. Invite everyone to a grand opening event. Go ahead and invite local media people to this event as well.
Make the event fun and related to your business in some way. For example, if you run a bakery, host an early morning Donut Run where people come in and sample some of your flavors and leave with a cup of coffee to go. Your first customers are almost always family and friends who then talk up your brand and help you bring in new customers.
5. Seek Foot Traffic
If your business is brick and mortar, you’ll want to draw in some of the foot traffic passing by your store. Use bright signs and list specials to get people in the door. The best new customer is one who happened upon your business by accident and is excited to share their new discovery with others.
6. Utilize Social Media
According to recent research, around 70 percent of Americans use social media frequently. Social media is a great way to get the word out about your new business. It works on a local level through targeted advertising that shows ads to those in a specific area and with particular interests. However, it also works on a global level based on interests, buying habits and other audience demographics.
7. Keep an Eye on the Competition
Not only should you study the current competition, but you also need to be aware of new competitors opening up. Maybe when you opened that new Greek restaurant it was the only one in the neighborhood, but now there’s a second one and some of your customers are eating there instead.
Do a bit of investigative work. Send someone to dinner and ask for a report back on what works and what doesn’t. Pay attention to their advertising, pricing and signage. While you never want to copy another business, seeing what works for them can help you change what you’re doing for the better.
8. Start a Mailing List
We live in a busy world with brands clamoring for our attention all day every day. If you don’t stay in front of your customers, they may forget about you. Offer an incentive if people sign up for your mailing list, such as a discount or a free item. Once you have them on your mailing list, you can send out regular announcements about specials, new product arrivals and special events.
9. Watch Your Cash Flow
Around 82 percent of business owners say their failures were due to cash flow issues. When business is good, set aside a rainy day fund for when unexpected expenses occur or when business is on a downturn. If you have money set aside, you won’t run into cash flow issues.
Also, have a plan in place for how you’ll get through growth spurts. Talk to investors or have a personal line of credit already in place.
Measure each thing you do in your first few years of business. Throw out any methods that aren’t getting the expected results and replace them with new ideas. Keep the things that work. Pay attention to the small details and you should fly through your first year successfully.
Running a business is never without its ups and downs, but you can be in the majority of companies that see success rather than failure.
Lexie is a UX content strategist and web designer. She enjoys copious amounts of coffee (with a dash of milk) and walking her goldendoodle. Subscribe to her design blog, Design Roast, and follow her on Twitter @lexieludesigner.