We love small businesses. They’re an indispensable part of the fabric of our communities — creating jobs and contributing to the vibrancy of the places we call home — and we’re continually amazed by our small business clients’ diligence, innovation, and tenacious pursuit of their goals.
This National Small Business Week, as we celebrate the essential economic role of small businesses, we’d like to offer a few tips for organizations reaching the important one-year milestone and looking to stand the test of time. If you’re an entrepreneur embarking on your second year in business, the following five steps can help set your venture up for long-term success.
1. Reassess the market and your strategy.
n today’s rapidly evolving business environment, you need to regularly reassess your strategy and be ready to respond to new challenges and opportunities. Have additional competitors emerged since you launched the business? Has your target customer shifted? Ask yourself what has changed in your market and the broader economy over the past year, and determine how those changes could affect your overall strategy moving forward.
2. Identify successes and failures.
Take a look at what worked and didn’t work in year one, and consider whether specific failures were due to shortcomings in vision, strategy, implementation, staffing, or other factors. Do you need more efficient processes, better internal communication, or more effective marketing? Focus on addressing any deficiencies that are within your control.
3. Focus your goals.
Based on your assessment of both the changing landscape and lessons learned in year one, create measurable quarterly and annual goals and identify the incremental steps you’ll need to take to achieve them. Then decide which metrics or key performance indicators — revenue growth rate, profit margins, customer retention, relative market share, inventory turnover, website conversion rate, etc. — you’ll watch to make sure you’re staying on track.
4. Enhance your team while building culture.
As your business matures, you’ll likely need to expand your team, both to take advantage of new opportunities and to prevent costly stumbles. Be honest about your own strengths and weaknesses and be ready to bring in new people to fill gaps in expertise and scale up in preparation for further growth. Make sure everyone who comes on board understands and embraces your vision, mission, and values. A positive culture that unifies, supports, and challenges employees can help your business thrive.
5. Review your financing needs.
The one-year mark is also a good time to reexamine your business’s short- and long-term financing requirements. Do you need to adjust your line of credit to better account for fluctuations in your cash flow? Might you need a loan to purchase new equipment or expand your office space? Talk to your banker about your plans and projections. A trusted financial partner can help make sure your business has the resources it needs to grow and thrive.
The end of your first year in business is a cause for celebration and also an opportunity to reflect on and respond to recent external events and lessons learned. Taking a few key steps now will more effectively position your business to meet the new challenges and seize the new opportunities you’ll face in year two and beyond.
Are you ready to explore or take the next step in your small business journey? Connect with a local banker on our Small Business Banking team.