The first year of managing a business can be the most difficult. Not only do you need to develop a solid foundation for getting your business off the ground, but you also need to market your ideas to potential customers to establish your client base. There are many important business goals to think about as you go through that difficult first business year.
Every business owner needs to write a plan that covers the startup phase and outlines the short-term and long-term goals of their company. The business objectives of the first year are usually short-term goals; they therefore have to be realistic, focused and achievable within 12 months. The most popular business goals focus on income, growth, and brand development.
WHY BUSINESS GOAL SETTING IS VITAL – ESPECIALLY FOR STARTUPS
Goal setting and business planning are considered the path to success. As a business owner, if you don’t plan ahead, charting what you want your business to look like in the coming years, you’ll have a slim chance of survival. For instance, if you borrow funds to cover the cost of your startup but lack a plan on how you’ll repay that loan, you have set yourself up for failure.
As an entrepreneur, you have to be intentional throughout the process of growing your business. Goal setting will help you build a solid foundation for growth and ensure your survival at the end of the first year. Here are three essential business goals you should aim for in your first startup year:
1. SALES AND MARKETING GOALS
Build a customer profile
Although it might take longer to identify and refine your target market during the first year, it’s necessary that you have an understanding of who will benefit from your goods or services. Once you determine your customers and their spending habits, market your business accordingly. Some elements to keep in mind while setting up your customer profile are:
- What organization will likely need the services you provide?
- Are there particular individuals you’d like to directly target?
- Are your goods or services better appreciated in a particular territory?
- How much yearly income should customers make to afford what you’re offering?
- Who are your potential consumers?
- Do you want to target a particular income bracket?
Draft a marketing plan
After understanding your ideal customers, you can draft a marketing plan. Your potential customers and a marketing plan will help you build the right message to convey the importance of the services you’re rendering to consumers. A marketing plan should include:
- How you’ll reach clients
- Social, email, and ad campaigns
- A strategic focus
Website online presence
Maintaining a business website with active social media accounts is one of the most important methods of reaching your target audience, building brand awareness, and educating clients about the importance of the services your business renders. It’s important that you have a good understanding of your client base and the kind of message that resonates with them. Your social media accounts can be used to show educational content, raise general brand awareness, and post your explainer videos.
2. FINANCE GOALS
Have a sustainable financial budget
It’s common for sales in the first year of business to not cover the initial startup costs. You’ll therefore need to have a realistic financial budget that will get you through the first year of business and adequately manage your working capital budget. You need to have a clear understanding of your current debt situation, available credit, and repayment to any investor. Avoid spending money unnecessarily.
What should your profit margin be?
It is true that money isn’t everything. But for startups, it is a major priority. There are two different profit margins—net margin and gross margin. Small business owners make use of gross profit. You can invest $50 on a single product for instance, costing you $35 to produce; you’ll end up having a gross profit margin of 30%, which is a realistic margin for your first year.
The profit margins differ with each industry due to economic factors involved. If you own an IT company and have a net profit margin of 16% and another person with a bakery has a margin of 21%, that doesn’t mean they have a better profit margin.
Make more money than you did while working at a desk job
Moving over from working for a firm to owning your own business can be exciting, but also challenging. If you’re not careful, your first business year could end up being really poor. There are some factors you have to consider, such as staffing, costs of entrepreneurship, and private health insurance. Having a sales plan and getting the right prices for your goods and services will greatly benefit your startup.
Have a smart goal
Since you don’t have any data to determine potential sales or revenue, your first business year could be very tricky. At some point, you’ll want to make millions of dollars, but that isn’t possible yet. Ensure that you’re smart about setting a realistic revenue goal.
3. DEVELOPMENT GOALS
Never stop learning new skills
A wonderful way to add value to your new business is to continuously learn something new. Always obtain new information about your competitors, ways to help develop your community, and teach yourself about Google analytics and search engine optimization. Find time to learn new skills and always strive to be better. This will increase your value and, in the long run, increase the worth of your business.
Determine how you want your company to develop
Apart from increasing revenue and sales, other business development goals will be important for the growth of your business. Determining the number of locations you would like to have by a particular time or the size of the office you want to occupy will align your goals to meet the needs of your business. Additionally, you can forecast how much gain you’ll make once you obtain these resources.
Training employees
New businesses often overlook training and developing their employees. The people who work for you are the most important resources in sustaining your business. Take some time to discover the motivations for your workers and do your best to assist them in working towards their goals. It will give your business loyalty and productivity to survive.
SET THE RIGHT BUSINESS GOALS
Some businesses seem to explode in the first year and others take a little longer. Every business is unique and reaches its set of goals at different rates. Not all business goals are achievable during the first year, because you’ll have limited resources and time. You therefore need to prioritize your business goals for the first year.
As an entrepreneur, having the right business goals will set you up for success in whichever business you’re involved in. Set up your dreams with measurable goals that are specific and achievable and you’ll achieve success.
About the Author
Marsha Kelly is a serial entrepreneur who has done time in corporate America, selling her first business for more than $1 million. Marsha shares her entrepreneurial experiences at best4businesses.com.
Read more IDH blogs from Marsha Kelly