Top 5 End-Of-Year Questions Every New Business Owner Should Answer
As a new business, there’s no denying that the first 12 months will be tough. No matter what industry you’re in you could find that you’re still trying to gain a foothold – even after the first year has come and gone. A learning curve, there’s a chance that you’ll make several mistakes along the way.
At the end of that first year, however, you should be in the position to answer valuable questions about your business – and the answers that you give will help you to forecast what the future looks like for your business. If you’re rapidly reaching the end of your first year, here are five questions that you should consider:
Q1: What Do Your Key Business Metrics Look Like Over The Past 12 Months?
At the end of your first 12 months you need to be able to answer this question confidently. As a business owner, you need to know the ‘numbers’ that are surrounding your business.
If not, you won’t be in the best position to predict what the new year (and the future) of your business will be like. It will also indicate what you need to focus your attention on in the new year.
To be able to answer this thoroughly, look at the following:
- Business revenue
- The Number of customers and quality leads
- Average customer value
- Website traffic (use Google Analytics or a similar web analytics site)
- The Conversion rate for customers
- What’s your business’ cash flow – you might be wondering ‘how important is cash flow’. This is essential for determining how efficiently your business is operating.
Q2: Do You Need to Hire More Employees?
After the first 12 months, you should know whether or not you need to hire more employees. As your business starts to grow, you’ll need more employees on hand to deal with orders – and this might become very apparent after the end of year one if your business has been very profitable and the demand is growing steadily.
Q3: What New Products/Services Should You Create?
After looking at key business metrics and conducting market research, you and your staff should be able to identify whether you will remain to sell one product or service or expand to offer new ones for your customers. The best ways of determining if this is the right path to take are by:
- Asking your customers what products/services are missing in the market.
- Build a prototype/test the waters with a new service and ask for
Q4: Should You Target New Customers?
If the business is doing well after the first 12 months, you’ll want to decide as to whether or not you should continue to target the same market or expand to offer it to new customers. But how do you identify your new customers?
- Conduct focus groups to explore their requirements.
- Estimate the potential revenue from the new customers.
- Create a marketing strategy.
Q5: Should You Expand Your Business into New Areas/Countries?
Expanding your business into new locations is a great way to grow it. But it can be very risky. Before making this decision, you need to look at the above metrics, research (so you fully understand the location) and seek professional advice.
Every business is different; some businesses are ready to expand after 12 months, whereas others will take longer to make the move.
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