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5 Things You Should Have Done by Your 2nd Year in Business

Congratulations. You’ve made it past the first year in business. That’s no small feat, as the Small Business Administration points out that 20 percent of small businesses fail in their first year. Sure, there are no guarantees when you open a business, and things can always change, often due to forces beyond your control. Nonetheless, you’re on your way. If you haven’t done the following 5 things by now, get moving!

  1. Stabilized Your Cash Flow: By now you’ve learned how much money you need to have come in every week to make sure you can pay your bills, buy your inventory, earn some money to live on, and so forth. If your cash flow seems wildly unpredictable, workout a revised sales and marketing plan so that you have decent estimates of your revenues if you haven’t already. You should also have a fair idea from your books and records of how much you have to spend each week, how much money you can keep in the bank, and what kind of profit margins you should expect. You need to tweak your strategy, tactics and/or operations to get your margins to where they can sustain themselves. Remember, without sufficient cash, your small business is fried.
  2. Made Plans to Expand/Optimize Your Business: You have probably learned quite a few lessons about your small business during the first year. For example, you may have realized that your original plans were overambitious or too timid relative to the market conditions and to the availability of capital. You might have uncovered underserved elements in your market that you can capture by expanding your product /service line, your geographic locations, and/or your operating hours.
  3. Secured Adequate Working Capital: Based on your performance so far and your plans for change, you need to establish an adequate amount of working capital to fund your operations, including inventory purchase. Your best bet after one year in business is to contact IOU Financial to borrow up to $150K effortlessly and at an affordable APR. If you own at least 80 percent of your business, have an average credit score, have a positive daily cash flow that lets you keep on average at least $3,000 in your business account, and you clear $100,000 a year in revenue, you have an 85 percent chance of getting the loan you want from IOU Financial. Forget about bank loans, they are really hard to get.
  4. Hired the Proper Staff: You might have started off as a one-person operation, or maybe you began with a small staff. After a year, you have a better idea of how many and what kind of people you need. If you haven’t done so already, dismiss any unproductive staff  and find the best people you can afford.
  5. Developed Your Social Media Strategy: Your website should be search-engine optimized, bug free, contain perfect content (if not, hire a good freelance writer), and include, if appropriate, a bullet-proof online checkout facility. You should have set up your accounts on Facebook, Twitter, LinkedIn and so forth, and made sure you continually add new material onto your social media sites.

Enjoy your second year – with sufficient know-how and capital, you’ve got a good shot at long-term success.

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Start Small, Think Big

Starting your own small business is at once exciting and threatening. Any entrepreneur spends a lot of time planning and fretting about a new venture, with alternating periods of exhilaration and despair. So much progress, but so many pitfalls! As the time comes to pull the trigger, your doubts rise and you hesitate. That’s normal, and you can get through the opening jitters by thinking big –turning your dream from a small enterprise to an industry legend. You may not get there, but the trick is to operate as if you will. This requires playing attention to the big picture while managing the many small tasks needed to advance the business. Here are three important tips for starting small but thinking big.

  1. Get Your Head Right
    The energy needed to make a business succeed is more akin to the output of a marathon runner rather than a sprinter. The overwhelming anxiety creates the urge to do everything at the same time. Unfortunately, this way lies madness, or at least exhaustion. Do not become a burnout, a working machine who sacrifices family, friends and enjoyment. Instead, concentrate on those tasks that will tend to sustain the long-term success of your business. Then, set a realistic pace that you can sustain for at least a year, maybe several.Behavior management is key to creating helpful habits and extinguishing self-defeating ones. To prevent burnout, first set the boundaries between work and personal life — if you commit to 10 hours a day at work, make sure the other 14 are devoted to non-work activities. Take weekends off, or at least Sundays. Reserve time for creativity and relaxation, and go on vacations a few times a year. This is how a top executive handles life — so should you.
  2. Grab the Bravery Stick
    Experimentation requires a certain amount of bravery, but it’s needed in order to contemplate the large questions that will propel the growth of your business. Ask yourself the fundamental questions:

    • What are the major challenges you wish to solve?
    • How will you recognize and measure success?
    • How will your actions alter your industry?

These kinds of questions are harder and more nebulous than figuring out whether to order the red widgets or the blue ones. You need both types of thinking, and you’ll soon discover that there is no one “correct” answer — you can succeed via several different paths.

Overcome the ambiguities by embracing experimentation. That’s right, instead of adopting the “ideal” strategy, try several different ones and see which one yields the best results. You’ll learn a lot from experimentation and get a better gauge of your market. You will also learn to let go of perfectionism, to get products and services into the marketplace quickly, and to use marketing resources such as product focus groups or pilot projects for services. Ask yourself what are the biggest questions confronting your endeavor and then design experiments that will yield the answers.

  1. Don’t Know Much About History…
    That’s a great way to fail. If you want to succeed, identify entrepreneurs and businesses that provide inspiration. These are the businesses you want to resemble when you become big. Remember, titans of industry usually had modest roots, just like you. Research their early years and pay attention to their decisions and milestones. See how they handled their challenges and doubts – it will take some of the mystery out of your future.Another thing to research is how they funded and grew their finances. This means forming strategic relationships with lenders, such as IOU Financial, to ensure money is available when you need it.

Stay focused on your long-term growth, create good habits and take small steps that build your momentum for success.

 

Focus on your business