Things to consider before Growing Your Startup
You’ve nurtured your business through its formative months, or maybe even years, and all has (pretty much) gone to plan. Spilling coffee over your laptop was a setback, but these surprises are nothing that you couldn’t handle.
Maybe you’ve now reached the stage where business is good, but not quite as expected. Perhaps your numbers are plateauing. It could be time to think about scaling up - though not to the level where you consider franchising or opening a new outlet.
Scaling up usually requires extra capital, so it’s important to analyse different aspects of your business before you take the plunge. More importantly though, is considering if there’s a high enough demand for your product or service to sustain growth. I don’t want to reel off an endless list of ‘tips’, so here are 3 pieces of advice that I think may provide some great food for thought.
In order to scale up, you should look at what you’ve already got and identify any changes that needs to be made.
Reassess the original idea you had for your business. What have you learned, what’s changed? By revisiting this original message you can ensure that when sizing up you’re not going to stray too far from your core values. You’re sizing up as people like your business, so remember not to turn it into something that’s too different. Refinements are good, but not to the extent that your business becomes unrecognisable to your existing customers.
In their book Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Porras, suggest that at this stage you should ensure that your goal is clearer than ever. Importantly though, Collins and Porras argue that by this stage the initial goal of survival is no longer relevant. Startups are said to “suffer from ‘we’ve arrived syndrome’ ” and struggle to move away from this mentality.
Collins and Porras suggest overcoming this by using the acronym BHAG, which stands for Big, Hairy, Audacious Goal. It’s basically a new way of thinking about your business’ future. To them, a true BHAG is ‘clear and compelling, serves as a unifying focal point of effort, and acts as a catalyst for team spirit. It has a clear finish line, so the organisation can know when it has achieved the goal; people like to shoot for finish lines,’
To have a BHAG is to have a tangible, energised focus. Cast your mind back to the energy you had at the startup stage of your business. This is what you’re trying to replicate, but remember to erase any survival-orientated goals.
Before attempting to diversify, you should make sure that your services are as good as they can be. Customer feedback is something that’s so frequently collected but rarely used. You shouldn’t ask people what they think without actually using it. That wastes everybody’s time. Also, how does this feedback sit with your business goals?
Broadening your target audience and increasing your presence in the marketplace through diversification is a common method of scaling up, especially if you feel that the demand for what you already offer may be limited. If you’re selling a product, it can also give you the credibility to approach larger retailers.
The best way of discovering what new additions your business can offer is to talk to your audience. Asking questions about your target customers and fostering relationships is more relevant than ever.
Social media is great for relationships, but it has made the face-to-face meeting something relatively unheard of now. Always try and meet with your customers if you can. People are more inclined to talk seriously with you about changes that can be made if you’re talking face-to-face. What’s more, they are more inclined to do business with a company if they know and like the people behind it.
These meetings can help you improve your services or product, but can also reveal new directions that your business could take.
Bring in some fresh blood
Now that you’re considering growth, it’s worthwhile thinking about weaknesses or gaps in your teams expertise.
One means of compensating for these pitfalls is by hiring someone to do that function. Anyone you hire is there to help you grow, particularly if they’re brought in at a senior level. If it’s a junior you’re taking on, then they can deal with the day-to-day running while you concentrate on the strategic activity. If you can’t afford to pay your new employee, then why not consider sharing some equity?
Sure this sounds scary and you’ll probably feel reluctant to share a piece of your business pie, but if it’s going to incentivise growth then it seems like a smart choice.
Bringing in new employees can also inject some much needed enthusiasm and energy into your business. You’re also more likely to re-think the way you work. Get into a new routine of sticking to your deadlines and goals. Most importantly though, is how seeing your business through a fresh pair of eyes can make you aware of anything that you might have previously overlooked.