Starting a business is the moment when all your planning, marketing and financial management skills will be put to the test. You’re bound to come across some obstacles and challenges during your first year in business, so now’s the time to improve your problem-solving mindset and decision making under pressure. That way, you can plan solutions and react with agility when things don’t go as expected.
This guide will walk you through how to plan for your first year in business, so you can successfully navigate the ups and downs of the early stages. You’ll learn how to:
- Create a brand and website
- Optimise your online presence
- Understand your market
- Manage your finances
- Build an engaged customer base
- Hire the right people
- Plan ahead
Getting to grips with all these components should help you build a robust plan for your first year and put your business in good stead for a successful second year.
Developing a brand for your business
A brand is your company’s public persona and personality. From how it looks and feels to the tone of voice you use, you want customers to recognise your brand and have it stand out from the crowd. There are some fab tips on this here.
Your brand doesn’t have to be perfect during your first year in business when you’re testing things out and on a tight budget. However, there are plenty of free tools online (we like Canva) that will help you create great imagery and keep the visual side of your business consistent.
3 steps to take when creating your brand
#1 – Put together a positioning statement
Your positioning statement should explain your brand’s position in the market. It doesn’t need to be customer facing or appear anywhere on your website, but it should act as a guiding star for you in creating your brand.
This is a helpful template:
We offer [product or service] for [target market or audience] to [value proposition]. Unlike [competitors or alternatives], we [unique selling points or key differentiators].
#2 – Logo, colour palette and typography
A logo is a core part of your brand’s identity. It represents the face of your company and will appear on every channel for your business, from your website favicon to social media platforms.
Your logo should be recognisable, unique and scalable to work in all applications. Consider having an icon that can be used both together with and separately from your logo.
Next, choose your colour palette. The palette should be notably different from that of your competitors and be a sensible representation of your business. It’s important to choose colours based on what’s best suited to your brand, rather than personal preferences.
Coolors is a useful tool that generates complementary colour palettes, allowing you to cycle through countless colours until you land on a combination that works.
Finally, determine your typography and the fonts you are going to use on your website. Keep it simple and accessible – pick two and ensure they are usable across different browsers and websites.
Arial, Helvetica and Times New Roman are among the safest choices for body text, but Google Fonts has several good options if you want something more creative for headers.
#3 – Tone of voice
Your brand’s tone of voice will shape your marketing messaging and communication with customers.
It should represent your brand’s personality and values, and be consistent across your website, email, social media posts and more.
While it helps to develop a tone of voice that comes fairly naturally to you (especially if you’re a one-person marketing team during your first year in business) think about the impression you want your business to give.
Do you need to sound authoritative so customers will trust your expertise? Are you getting a younger audience excited about a lifestyle product?
Nailing the right tone of voice will help you attract your target audience and get them interested in your business.
Building your first website
Whether your business is entirely online, or your website will just act as a signpost, it’s essential that your website is user friendly, easy to navigate and informative.
Think of your website as your shop window. It’s usually the first impression you’ll make with a customer, so it should lay out your unique selling point (USP) and services or products clearly and be aligned with your brand.
If you aren’t digitally savvy, you can hire an expert to help you build a website. However, if you take this route, be sure to keep it simple. Website development can be a major cash drain so it’s best to stick with a minimum viable product while you’re in your first year of business – you can add extras in your second or third year.
Alternatively, if you’re happy to try creating something yourself, Squarespace is a popular website builder. You can choose a website template and drag and drop text or image blocks where you need them. There are also robust ecommerce functionalities if you’re selling online.
Building a website yourself will take time, but it’s a significantly cheaper option than bringing in a freelancer or agency for something bespoke.
Following best practice for SEO
The next step is to ensure that your website is easy to find in search engines.
Search engine optimisation (SEO) helps to improve your visibility on search result pages, so that customers can find you when they search for similar products or services.
Here are several ways to improve SEO on your new website and boost your online presence.
Use analytics tools
Use tools like Google Analytics and SEMrush for insights into how people find and interact with your website. You can use this information to determine site architecture, address gaps in the user journey or get ideas for marketing content.
Learn what keywords customers use
Determine keywords that customers are using to search for similar products or services and use them throughout your website. Great places for keywords include page titles, meta descriptions and header tags. This helps search engines establish what each page on your website contains and the kind of terms it should rank for.
Don’t forget internal links
Create opportunities for internal linking and link to other relevant pages on your site. This helps both users and search engines navigate through your site and highlights the most high-value pages.
Start a blog
Updating your site regularly will help your search ranking, but there’s only so much you can add to product or service pages. That’s where a blog comes in. A blog gives you a stream of new content to post, packed with the keywords you’re trying to rank for. Plus, a well-written blog is an effective way to start building a reputation as a thought leader in your industry.
Get backlinks from other relevant sites
Backlinks are links from other websites that point to your domain. By getting other websites to link to yours, you can boost the authority and search visibility of your site. Seek out partner companies or similar brands within your industry you can secure backlinks with.
Ecommerce and payments
If you’re selling a product or service through your website, you might want to employ a dedicated ecommerce solution. Research the best shopping and payment systems that allow customers to check out quickly and process payments securely.
You can choose between an integrated ecommerce system, such as Shopify, or a third-party site, like Etsy or Amazon. If you set up your own ecommerce shop, payment processing can be done via platforms like WorldPay, Zettle and Stripe.
Researching your target market
Whether you’ve got big ambitions to operate in the global market or are looking to create a niche in a local market, it’s important that you understand it fully before you get started. This includes looking at your customers and competitors, as well as considering the geographical reach of your business in your first year.
Focus on your local market first
Launching into a national or global market comes with more challenges and higher risk. It’s a good idea to set out a strategy to succeed in local markets first, so you have a blueprint for expansion and growth later down the line.
Test your business plan on a local market before you even consider rolling it out nationally or beyond. Select a geographical area that’s easy to manage – a place where you can build close working relationships, keep your travel costs low and be on the ground with your product or service and your customers.
This mitigates your risk and reduces the chance of loss. It also gives you the chance to reflect, pivot, learn and develop, which is what the first year of business is all about. You can then apply those lessons if you launch in bigger markets later on.
Build an understanding of your audience
Who is your target audience? What are their needs and desires? What are the limiting factors that prevent them from engaging with your services or purchasing your products?
Speak with your early customers, send out surveys and collect feedback wherever you can. Many founders go into their first year of business with a clear idea of a product or service, only to find out the market is looking for something completely different.
Market research is crucial to building a business that has longevity. Make it part of your business plan to regularly collect feedback in your first six months and be prepared to tweak your vision if it’s not hitting the mark.
Research your competitors
Researching competitors is a key step in planning for your first year in business. It’s essential you know what sets you apart; that will define how you position and market your product or service.
You’ll be able to get a good sense of their brand and positioning from their online presence. Customer reviews are also a useful source of information when it comes to identifying weaknesses that your business could build on.
When you start a business, there are always more additional and ad-hoc costs than you expect. As a result, most new founders will try to bootstrap the business for the first few years. This involves using existing resources like personal savings, their own equipment and home space to get the business off the ground.
When you’re planning for your first year in business, it’s a good idea to overestimate how much cash you’ll need. There are standard set-up costs like registering your business and getting insurance, but you also might need to pay for other things like:
- Accounting or financial services
- Marketing and digital support
- Business travel
- Software licences
- Tickets for industry events, like conferences or exhibitions
- Technology, such as laptops, printers or machinery
Even if you’ve saved a sizable sum to start your business, cash can disappear quickly if you aren’t careful. Be ruthless about what you really need now and push nice-to-haves into the future when your business is bringing in more revenue.
It’s worth speaking to other early-stage business owners in your sector or area to find out how they budgeted for their first year and any unexpected costs you should anticipate.
Managing your cash flow
This leads neatly onto cash flow management.
Managing your cash flow is essential to ensuring your business is sustainable in its first year. You can keep your cash flow stable by ensuring that clients and customers pay their invoices on time, only spending cash that’s available and making sure that funds are used efficiently.
Here are three key things you can do to keep your business afloat and keep money coming in and going out:
#1 – Create a cash flow forecast
Break down your anticipated income and outgoings for the year by week and month in a cash flow forecast. This will allow you to plan your spending for times when you have extra cash and to cut back when you don’t, ensuring you’re not losing money.
#2 – Stay organised
Stay on top of invoicing and chasing payments to ensure money is coming in on time. Send out invoices well ahead of deadlines if possible and use your cash flow forecast to signpost key moments for generating income.
#3 – Be data driven
Use cash flow forecasts and data to inform decisions across your first year of business. These decisions might include bringing plans forward because you’re generating more revenue than you expected or cutting back on spending during a dip in demand.
If you’re new to finance and struggling to get your head around the numbers, it might be worth hiring an accountant who can also act as an adviser. It’s a business expense, but you can learn the ropes quickly and find out exactly what you should be looking at each month.
Focus your spending
Keeping a tight grip on spending in your first year will help you to work efficiently and think carefully about where you invest your cash. This is a good habit to get into, because it forces you to regularly analyse what’s working and what isn’t.
Here are some easy, cost-saving ideas for your first year in business:
Work from home
If your business is online or doesn’t require office space or a commercial premises, you can save costs by running your business from home.
If you do work from home, and you are self-employed, make sure you claim back your costs as a business expense. These costs include portions of your utility bills, like the electricity used to power your computer, and your internet and telephone use. Learn more about the guidelines from HMRC on business expenses and tax relief here.
Research different types of offices
If you do need to rent an office to run your business, there are several different options from empty spaces that you furnish yourself to fully serviced offices.
Coworking spaces have also become increasingly popular in the last few years and provide flexibility if you only need a desk a few days a week.
Find out what support your business is eligible for
Depending on your industry and what type of business you have, you may be eligible for tax allowances or other funding support in your first year of business. Understanding the support that’s on offer can help you save cash as you head into your second year.
Ensure you are charging expenses against your business appropriately. Look into capital allowances to help with the cost of purchasing business equipment, like computers, cars, tools or furniture.
There are also relief schemes that reduce your company tax bill, such as R&D relief, and investment schemes that offer tax relief to encourage investment. Read more about how to make the most of tax reliefs here, and see how to find and apply for small business grants here.
Building an engaged customer base
Even if you have a brick-and-mortar business, a digital presence is key to getting found and building a customer base.
Most customers will head to the internet before they make a purchase, whether it’s to compare prices or read reviews from past shoppers. So, it’s essential that you optimise your online presence for maximum engagement, loyalty and conversion. Here’s how.
Establish a social media presence
Social media is an essential tool for reaching your audience and showcasing your brand, products and services. It instils trust and builds credibility, which are key milestones on the customer journey.
While you’re running the business alone – or with a small team – it’s best to choose one or two platforms to focus on so you don’t spread yourself too thin. A good way to plan your time is to take a 40/30/30 split: spend 40 per cent of time posting, 30 per cent engaging with followers and 30 per cent growing your network by following other users.
Collect email addresses for a newsletter
Building an email list allows you to engage current and potential customers on a regular basis. You can keep them up to date on new products from your business and encourage sales by offering exclusive discounts.
It’s worth adding a form to capture email addresses to your website from day one. You don’t have to send out a newsletter right away, but that way you’ll have a list of engaged customers when you are ready to do so. To do this, you must make sure you are GDPR compliant.
Making the first hires for your business
A successful business depends on having the right people on board. While the first year is all about testing your idea and keeping a tight grip on costs, it’s also crucial to get the talent and skills on board when you need them. If you don’t, you can miss out on opportunities and end up stagnating.
Freelancers and contractors are a good option if you need high-quality talent on a flexible basis. But top people often come with a hefty day rate and will only work in their specialist areas, like sales or marketing.
Most brand-new businesses have an all-hands-on-deck mentality and need people who can dip into lots of different tasks, from customer service to product packing. That’s where your first hire comes in.
Recruitment is an investment and you want to ensure that once you find the right person, you can secure and keep them. Here are some tips for hiring your first employee. Or you could seek help from a HR professional. You can find an adviser here.
Use different platforms to find candidates
There are lots of ways to reach the right candidates, so don’t pin all your hopes on one website. Post on job sites like Indeed or Jobbio, as well as sector-specific job boards, as well as LinkedIn. Speak to people in your industry to seek out word-of-mouth recommendations too.
Break interviews up into first stage and second stage
Interviews should provide you with an overview of a candidate’s skills and experience, as well as a glimpse into who they are as a person.
The best interviews will test people’s skills and ask them to demonstrate what they can do. They will also give you both a chance to understand whether you make a good fit professionally and personally.
When you’re short on time, it’s wise to schedule a series of 15-minute, first-round interviews over the phone or via Zoom. That way, you can easily qualify people and move the best candidates through to the second stage of in-person interviews.
Focus on the skills you need
When you’ve run a new business single-handedly for so long, it’s exciting to speak to people who can bring a range of skills to the table.
However, it’s vital to focus on the skills you really need. It’s brilliant if a candidate can bring video editing skills into the business, but if you’re hiring a customer service manager then make sure your new employee ticks those boxes first.
Make competitive and attractive offers
Hiring isn’t just about what a candidate can bring into your business – it’s also about what you can offer them.
Having a competitive and attractive offer will attract the best candidates. In addition to a generous salary, consider the other elements that make you a great employer and be sure to put them on show.
From your stance on flexible working to staff benefits and growth opportunities, give candidates plenty of incentives to choose your offer over any others.
Planning for your second year in business
At some point in your first year of business, you have to start looking ahead to year two. This may already be part of your robust plan, but now you’ve got a year under your belt. So, it’s a good time to take stock and plan.
At this stage, you should be confident that you’ve got a product or service that there’s clear demand for. You’ll have some successes under your belt – and, undoubtedly, mistakes you’ve learnt from – and a good idea about where you want to take the business next. For example, it might be developing a new product range or expanding into another city.
3 tips for planning for your second year in business
#1- Understand your funding
If you’ve received funding or investment for your business, check the terms to see if any of it is dependent on the achievement of goals in your first year or beyond.
If so, these goals need to be built into your business plan. If it looks like you won’t achieve them, you need to build a contingency plan and speak to investors.
#2 – Measure your business performance
If you’ve kept a close eye on your business finances, you should have an idea of areas for growth and areas of weakness. Your second year in business is the perfect time to start building on those growth areas and cutting out anything that isn’t working.
Think about why those areas have flourished: are you providing a niche service that no one else is offering? Has a popular trend helped draw attention to your business? How is demand likely to change the following year?
Asking these questions will give you direction for the second year. Ensure your plans are grounded in data as much as possible so there’s a clear reasoning behind new goals.
#3 – Plan for further additional costs
The extra costs don’t stop coming in year one. If your second-year plans include renting an office, hiring more staff or expanding your business into new markets, they will incur additional costs.
Ensure you have funding plans for any new activity. If you do plan to think about getting investment, deciding how much to ask for is important. There are some good tips here. There are lots of ways to raise investment and funding, this is a good place to start looking for support.
Getting through your first year in business
There you have it: a guide to getting through your first year in business with a plan of action in place. If you’ve come this far, you should now know how to:
- Create a brand and website
- Research your target market
- Manage cash flow and budget carefully
- Build an engaged customer base
- Hire the right people
- Map out your route to future growth
Now you have a platform from which to jump into a successful second year.
Take time to reflect on everything you’ve learnt and achieved over your first year – and good luck for the second.
Emma Jones CBE is founder and CEO of Enterprise Nation