5 Ways You Know You’ll Make It Past The First Year
When you’re starting a new company, the million dollar question is, “Will I make it past year one?” And, without some kind of fortune teller, it’s not a question easily answered. Or is it?
There is a way to find out if you’ll last past year one and it doesn’t involve a Magic 8 ball.
Here’s what to look for.
1. Return Business
It seems obvious, but it’s something to look for: if you have customers that return once in the first year, that’s a big plus. If they return more than once in the same year, you know you’re off to a solid start. It’s a way to measure how much your customers are into you. And, if they’re coming back, you’re doing something right. To keep that going strong, learn about your returning customers. Talk to them. Make it more than just a business transaction to keep them coming back for years to come.
2. Pay your taxes
Another obvious one, right? Wrong. Taxes for businesses aren’t the same as taxes for individuals and you need to know what you owe. This shouldn’t be too hard, too. If you have opened a small business account with a bank, they have people there that can help you understand what your requirements are. They are there to help because, at the very least, they want that account to be open for years in the future.
3. Building credit
Your business has a credit score. Did you know that? Well, if you didn’t, you do now. Credit is obviously important and you can use it as a bench mark to score your business. While you may not need to take advantage of that credit score in the future, it’s a good way to measure your success. So, keep up with it every once in awhile.
Also, make an effort to build that credit. Pay your bills on time. Monitor your spending. If you do it in every day life, you should do it for your business, too.
4. Assets outweigh costs
If you liquidated every asset, would you be able to pay off all your debts? If yes, proceed to year two.
It’s another measure of how aware you are of what you’re saving vs what you’re owing. Keeping costs low while maintaining your assets puts you ahead of the game.
5. The most obvious: turning a profit
Many sources say you shouldn’t expect to turn a profit in the first five years of a startup. That’s not comforting. Also, you shouldn’t take it too much to heart. You CAN turn a profit in your first year. And, on top of that, it’s a pretty good indication you’ll make it to your second year.
What indications have you seen that you would make it to year two? What are dead giveaways that your business won’t survive? Tell us in the comments!