Starting a business might be a difficult task for novice entrepreneurs, but it is even more challenging to maintain your business and survive the dynamic market. Research indicates that 80% of companies fail within 18 months of launching, a terrifying trend in the world of entrepreneurship.
If you’re fortunate enough to survive the first 12 months in business, the decisions you make in the next six will determine whether or not your startup has what it takes to become an established enterprise. The most important decisions a small business will need to make after their first year open include:
The first decision the owners of small business need to make after their first year open is whether or not to stay open. While it seems like a pretty straightforward thing to figure out, it’s tempting for entrepreneurs to refuse to see the writing on the wall about the fate of their small business venture. Crunch the numbers to map out the next several months to determine the most practical path forward.
If staying open, the decisions shift to those of expansion. For example, is business financing necessary for reaching your growth objectives? Figure out if more staff is needed or if expansion can occur without expanding the payroll. The important thing is to base your decisions on hard figures and reliable data. It’s easy to get carried away with big dreams of growth without staying grounded in reality. Many examples of businesses failing before 18 months include over-eager expansion undertaken at the first-year mark.
Focusing on Strength vs. Trying to Work on Weaknesses
Your first year in business must have given you a glimpse of your strengths and weaknesses. Now, it’s upon you to decide which way to go: should you focus on your strengths or work to perfect areas you are weak in?
While some entrepreneurs might choose the latter, a majority will agree that focusing on your strength is a sure way of expanding your business and avoiding mistakes in the process. Thus, use some analytics and your business data to determine the most profitable areas of your business, and concentrate on these areas.
Scaling Your Business
An essential focus after your first year in business is scaling your business.
After trying business techniques to sail through the first year, your success in the subsequent years depends on the type of decisions you make. For example, will you consider adding different models to fit the competitive market? Or will you continue working with the business and growth models that have increased your first year’s revenue?
Indeed, it is essential to introduce new models as a strategy for expanding your business. Start adding experienced employees to your team; segment roles to new employees; set up effective change management processes that will sustain the company growth; and take a keen look into new opportunities and ways of limiting risks. All these decisions will play a significant role in growing your business.
Generally, any decision you make after the first year should be wise, taking into consideration all market parameters. Besides, setting up a system to sustain growth is key to seeing your business survive the second and subsequent years.