Few people apart from entrepreneurs themselves understand what goes into starting a small business. Before the glory of the launch day comes weeks, months and sometimes even years of preparation. This preparation involves everything from market research to prototyping and so much more to make their vision a success.
Given the number of things a new entrepreneur has to juggle during their first year, many end up focusing on all the wrong things. It’s extremely difficult to be successful during your first year in business so you must make as many of the right moves as you can to succeed.
Here are the milestones new entrepreneurs should focus on during year one:
1. Consume Less Information
Before you get started, it’s important to remove distractions. The primary source of distraction for entrepreneurs is too much information input. Think about how much info that competes for your attention every day. There are blog posts, e-mails, newsletters, podcasts, tweets and status updates.
It quickly becomes counterproductive when we spend time on info that we aren’t even ready to take action on. New and shiny things are fun, but they are dangerous black holes for our time and energy. The solution is simple. Starting today, go on an information diet. Only consume information that relates directly to your current most crucial goal and you can put into action right away.
2. Focus On A Profitable Business Model
A business model should tell the story of how your entire business works. The story should focus on three core questions:
– Who is your client?
– What does your client value?
How do you deliver that value at the right cost?
All of those questions add up to creating a profitable business model. If you nail those questions, you’re well on your way. Set aside some time to write a full-fledged business model. It’s the first and most important business milestone that you must reach.
3. Initial Financing
Whether the first outside financing is for seed money to test the concept’s potential, start-up financing for product development and market testing or first-stage financing to initiate manufacturing or sales, the entrepreneur must understand how investors perceive the venture.
Businesses must compete in the capital as well as product markets to survive. Entrepreneurs should view securing financing as an opportunity to learn about their ventures’ acceptable financial and expense structure, given the highly competitive financial market. To be successful past year one, you must find a way to keep yourself afloat month after month.
4. Market Validation
Market validation (sometimes referred to as “product-market fit”) occurs when you take your solution “to the streets,” testing it by measuring the actual response of the market to your idea. Now, you’re no longer researching. You’re asking people to put their hard-earned money where their mouths are in support of your fledgling business.
Market validation can take some different forms, but one of the easiest is the creation of a simple landing page that’s supplied with a stream of paid traffic to gauge audience response.
5. First Customer
There’s nothing sweeter for a new business owner than that first sale; that first person who is, effectively, saying, “Yes, I believe in what you’re doing enough to buy into your vision.” In some cases, you may have earned your first customer during your market validation testing. In others, it might be a friend or family member who’s willing to throw their support behind you during your business’s earliest days.
Whatever the case may be, remember that customers are the lifeblood of your business. Without them, you have no revenue – and without income, you have no business. Struggling to get customers is a normal part of early business growth. However, if the challenge remains ongoing as your company ages, consider this a sign that you may need to return to the drawing board and rethink your problem-solution or product-market fits.
6. Focus On Repeat Clients
Your business milestone involves that sweet, sweet exchange of currency. Landing your first repeat client (sometimes called an anchor client) will give you confidence in your business and the motivation you’ll need to keep going. The key word here is “repeat.”
You may earn that first repeat client through personal recommendations, an existing contact or cold calling. Landing your second repeat client will take understanding precisely who they are and where they spend their time, both online and off the internet.
7. Hire And Train A Solid Team
Starting off as a one-man operation, or solopreneur is great. However, except for a few lucky business models, it will only get you so far. You’ll need to hire and train a team. This exciting milestone will grow your business by leaps and bounds.
Put in the time to create a stellar employee training program before you even hire your first employee. Instead of stumbling through it and possibly wasting your time, energy and money with the wrong people, this will enable your team to be set up for success. You can also test the waters by hiring a virtual assistant or a contractor. They can take a lot off your plate without being a formal team member.
8. Positive Cash Flow
Having paying customers is essential, but revenue alone isn’t enough to keep a business sustainable. Cash flow management is a complex practice; one that’s often learned on-the-fly by new entrepreneurs.
Pay attention to your incoming revenue and your outgoing expenses, as well as to the possibility that unexpected events could throw things in one direction or the other. Reaching positive cash flow and sustaining it for any length of time is a significant milestone that small businesses should celebrate.
Conclusion
Creating and reaching your milestones in your first year of becoming an entrepreneur is no easy task. But fulfilling your milestones one at a time is considered an enormous success and will help you to survive the so-called 5-year threshold for every startup businesses. In this post, I shared with you the milestones new entrepreneurs should focus on during year one.
