So you’ve made it through your first year in business. First of all, great job! The first year can be a tough road, with most of your income getting reinvested back into the business itself, and you may be taking a pay cut to your personal income.
These are just a few of the sacrifices you’ll have to make to keep that business going strong. Now that you’ve reached your sophomore year in business, how do you not only stay afloat but succeed?
1. Take A Look At You
Owning a business is all about sacrifice. You sacrifice your time, your energy, your money, and sometimes you’ll subconsciously sacrifice your physical and mental health. That might not seem like such a big deal, but how you’re feeling and how your body responds to those long days at the office or in the shop can really determine how far you can go.
When you’re working your way to a profitable business, it’s important to make stops along the way and ask yourself “Am I alright?”. If you’re exhausted because you’ve been working seven days per week for the last year, it might be time to think about taking a break. Yes, hard work is the way to grow your business, but you can’t work at all if you burn yourself out. Make time for things you enjoy. Go out, spend time with family, do something to maintain your mental health as well as your physical health.
After working so hard and surviving your first year, you’ve earned a break. It can be only a few hours or even a few days. That’s the beauty of owning your own business; you get to decide when you work and when you rest. Don’t take your mental health lightly. It can affect everything from your drive to your energy levels. It’s important to take care of yourself so that you can look back a decade from now and see all the progress you’ve made with your business. Do yourself a favor, and take care of you.
2. Reduce Costs
Once you’ve determined that you’re doing alright personally, it’s time to take a look at those dreaded financial numbers and figure out where you can cut costs. Try to avoid cutting any costs that will jeopardize the quality of your product, but instead focus on inefficient processes or even employees.
Cutting costs may sound like a negative term, but in reality, it’s a simple reflection of the things that cost your company the most money and how to adjust them. Take labor, for instance, the largest cost of any business. Look closely at your employees. Have you set a good standard? Are they aware of company policy and expectations? Is there anyone on your staff who isn’t quite making the cut?
Unfortunately, there isn’t much wiggle room in just your second year of business, so if you find that something (or someone) is costing you a lot of money, you need to think of a solution. This is to the benefit of everyone in the company because once you’ve identified where the money is leaking from, you can plug the hole and reinvest more cash back into the business.
3. Expand Your Network
This is easily the most important part of your second year in business, is expanding your network of people and other businesses. Who you know is just as important as what you know when it comes to running a company. You likely spent the first year of business simply surviving, which is to be expected. Now that you’ve established yourself and have a bit more wiggle room, it’s time to network more often and more efficiently.
Other small businesses in your industry can be great models for how to navigate the issues you may be facing during your second year, and having a good network can be invaluable when you begin to expand into other areas. Businesses run on people. Without people, you can’t have a successful business. Many business owners forget that there’s more to the people aspect of business than just the customers. Put yourself and your brand out there and connect with other professionals to build a solid base of support and knowledge.
4. Make Sure Your Financials Are In Order
If you’re struggling with keeping up with all the numbers, it might be time to hire an accountant. Businesses can incur stiff penalties from State and Federal governments for not adhering to certain financial practices, including paying taxes. Hiring an accountant to track your financial information and handle things like taxes, not only ensures accuracy and punctuality but also takes the stress of those items off of your hands. Let’s be honest here, you can’t do everything by yourself.
Take a look at whether or not you need extra funding as well. There are many ways to secure funding, not the least of which comes from online lenders. Lenders such as upstart are creating new ways to lend money to small business owners. Check out this review on Careful Cents on Upstart before you apply.
5. Is My Vision Still the Same After Year One?
The first year in business will reveal a lot about you, but also about the vision you had for your business. The sophomore year is a good time to ask yourself “Is my vision the same? Do I want to take it elsewhere?” If you find that your vision is no longer the same, you’ll want to take steps toward your new insight.
Owning a small business is all about fulfillment, and you can’t be fulfilled if you aren’t adhering to your vision. Be sure to have a clearly defined goal and steps on how to reach it, and you’ll find it much easier to navigate.