Your first year in business – how to set the foundations for future success
Reaching the end of your first year in business you may think the hard work is done – but in a lot of ways it’s just beginning. Now it’s time to take stock, learn and plan for whatever comes next.
There are still a few more steps to take before you can relax completely.
The end of your first year of business is the best time to review your work, revise your plans and budgets and reinvigorate yourself for continued success during Year Two.
If you haven’t done so yet, do yourself a favour and read the first two parts of this series, on what to do before you start out, and what to do during your first year respectively.
Hopefully, after following the advice in those articles, you know you’ve got some sound accounting and bookkeeping systems in place, so now is the time to utilise all that lovely data.
1. Get your final numbers – and BE HONEST
To accurately analyse your first year, you need to be completely honest about what you made – and what you spent.
Since you’ve been checking in with your budget throughout the year, as we advised in part two, there shouldn’t be any nasty surprises lurking in your Profit & Loss.
But by doing a complete financial analysis at the end of the year, you can highlight some great habits you’ve established in managing your finances and uncover things you need to improve on.
Never look at deficits or losses with fear or shame, instead, use the data to help you grow and evolve your business practices.
2. Analyse what worked and what didn’t work (beyond your bottom line)
Take the time to think back about certain milestones you achieved, or times when your stress levels got too much.
Think about what worked and what needs to change in how you manage your time, or how you would do certain tasks differently next time.
It’s important to get a handle on your work stress – not just for the longevity of your business, but also for the culture that you are creating and the overall happiness of you – and your future staff.
3. Think about your future and plan how to invest in it
That means having a good hard think about what you would like the future of your business to look like – whether you’re looking to merely maintain your business or grow it.
Most people will undoubtedly be in the latter category, and the end-of-year analysis is the perfect time to think about how you want to expand your business and lay the foundations for that growth.
That could mean saving for a new office space, defining roles so you can hire more staff or acquiring venture capital or a business loan to expand internationally.
Whatever your desire, there needs to be a plan in place on how you achieve your goals, even if you don’t think you’ll be expanding for another two years, it’s essential to start to lay the foundations for that growth as soon as possible.
Make sure you have an accountant who you are happy with, who understands your business goals.
Also, make sure you know your strengths and weaknesses, and don’t be afraid to outsource the tasks that don’t fall under your area of expertise.
READ: Writing a business plan
4. Revise, recharge and redeploy
Now you have all your data, and you’ve defined your plans, it’s time to put them into action.
Setting budgets for your second, third or fourth year in business isn’t just about adding 20 percent to your first year’s figures.
It’s about understanding what you need to do to achieve your goals and set new budgets that will help bring them to life.
When doing a new budget, you may need to add on capital for new equipment or investing in staffing.
You need to revise your projected revenue, but you also need to revise your expenditure in align with your growth or maintenance goals.
Once that is done, it’s time to give yourself a huge pat on the back and enjoy all you’ve achieved.
It’s time to take a break and recharge yourself, so you can go into year two energised, inspired and confident that you can achieve your goals.
PART ONE: The beginning of your journey
PART TWO: 4 tips for staying afloat