Are you in the process of launching a business? Are you worried you’ll do nothing but spend money in your first year? Are you hoping to generate a profit instead of finding yourself in the hole after your first year in business?
There is no simple way to launch a business that generates a profit in year one; however, it’s not impossible. With the right strategy in place, you can hit the ground running with the hope of generating profits sooner rather than later.
The first thing you need to do is compare a variety of startup business ideas. If you’re not already invested in a particular vision, you can decide on an opportunity that would put you in the best position to generate a fast profit, but if you’re already sold on your brilliant plan, you can also compare industries and estimate how your business might perform in the current market.
Here are a few additional tips for launching a business that generates a profit in year one:
1. Watch Your Start Up Costs
You don’t want to start out by burying yourself in debt, as this can make it a challenge to dig yourself out in a reasonable period of time and can definitely impact your first year profitability.
According to Inuit, the average startup capital across all industries is approximately $29,000, but you may be able to get away with spending far less if you open a drop-shipping company, for example. On the flip side, if you want to establish a restaurant, you’ll almost certainly need way more. Either way, you need to watch your start-up costs closely. The less you spend upfront, the greater chance you will have of generating a profit in year one.
2. Find a Happy Medium with Your Marketing Plan
There are business owners who never want to spend a single dime on marketing. There are also those who are more than willing to spend whatever it takes to generate new business. You need to strike a happy medium with your marketing plan; while you don’t want to overspend on your strategy, you also have to be willing to part with enough money to generate positive results.
According to the Houston Chronicle, your business should spend approximately seven to eight percent of gross revenue for marketing and advertising. As your revenue climbs, so should the amount you devote to these expenses.
3. Hire Top Talent
It’s easy to trick yourself into thinking you can do everything on your own, but there will come a point when you realize the importance of bringing highly talented professionals into your company. Entrepreneur shares nine of the best ways to recruit top talent to your startup.
While there is no guarantee you will hire the right person every time, you should strive to do so and resist the urge to settle just because you have an immediate need to fill. Once you have your workforce in place, it’s time to implement a plan for ensuring everyone reaches peak performance and productivity. For example, you may be able to use salesforce gamification to push your salespeople to the next level.
4. Put Your Website to Work
There are only 24 hours in a day, and it’s not feasible to believe you can work non-stop. For this reason, you need to find ways to grow your business even when you’re not actively working. One of the easiest ways to do this is to put your website to work for you. For example, you can use a drag and drop website builder to improve the appearance of your website.
If you’re struggling to create the website of your dreams, you may want to hire a professional to tackle this project. According to Website Builder Expert, a website can cost anywhere from a few hundred dollars to $10,000 or more; it all depends on who you hire and the scope of your project.
If you aren’t getting enough out of your website, review it in great detail with an eye toward customer experience and functionality to make changes for the better.
In a perfect world, you would know exactly what’s necessary to launch a business that generates profit in year one. Unfortunately, in business, there are no guarantees. You’ll need to work hard, experiment with a variety of ideas, and make changes on the fly to create a successful, profitable business in the first year.
Have you successfully launched a profitable business in year one? Are you working toward this goal currently? Share your entrepreneurial experience in the comments.