The first year in running a retail business is crucial -- it determines where your company is heading, and can either make or break your success. Many entrepreneurs fail to make it through the first year and just give up. What should you expect during that first critical year of your retail business? How can you plan for the ups and downs so that you keep going and finish the year strong and ready for year two and beyond? Here is some advice for first year retailers:
- Manage Cash Flow - One of the most common problems an entrepreneur faces during the first year is falling behind on payroll taxes or failing to budget for taxes on business income. If you get stuck owing taxes and don’t have the cash flow to manage taxes, it’s hard to stay on track. Create a first year business plan that embraces the ‘cash is king’ concept. You don’t have to worry too much about making a profit the first year – most new retail businesses don’t. Instead, focus your efforts on managing expenses and maintaining enough cash flow to pay taxes and be prepared for unexpected emergencies or opportunities.
- Become a Student – Even if you weren’t a good student in school, now is your opportunity to make an A+ in your favorite subject – your new retail business. The first year is a golden opportunity to get to know your product, get to know your market, and learn how to be a good employer. You should spend a significant amount of time this year with your target market. Are they the right target> Do you need to adjust your demographics a little? Widen your appeal? Now is the time to make sure you are selling to the right customers. It’s also your chance to create the ideal employee profile of the kinds of employees you will want to grow your business in the future.
- Evaluate – There will be plenty of things that don’t work in your first year – as well as things that do! Take the time to analyze the good and the bad. If something fails, why? Try to learn from failures ad mistakes so that you can implement corrective action and not spend more money on processes that aren’t successful. Put a plan in place to resolve problems and then track your progress towards achieving your business goals.
The first year of your retail business will be full of challenges, frustrations and opportunities. Stick with it and manage your money, your time and your processes to the best of your ability. Good luck!