When you are a startup, you dream of becoming widely successful one day. Studies have demonstrated that it takes at least 4 years for a startup to turn into a real and profitable business. Yet some argue it can take up to 7-10 years to make it successful. It seems like a long journey to go. This is probably why people are not properly prepared to handle the fast growth of the business.
Have you ever been curious about how it will be like when your startup becomes profitable and bigger? If yes, what kind of smart strategies can you bring to help prevent difficult challenges caused by the big changes? Here are a few tips to keep in mind when you go through this period of time to make your company go smoothly.
Analyze the cause of growth
As you experience big changes in your business, it is critical to review all the available data to analyze where the growth has started. Although you are doing something good, growing too quickly could make you lose your focus on how to handle your business. Try to understand some of the main focuses in financial areas as follows:
- Where your profit started
- How much budget you have and will have
- Actual cash flow
- Equipment purchases based on numbers, not an institution
- Who your customers are
- Plan for the costs of employees
When your business is smaller, you probably have control of your numbers. You are able to watch your cash and know quickly how expenses are stacking up to sales. But once you get to a certain sales range, above $5 million or so, it’s very hard to keep track of your financials in your head. says Brian Hamilton, chairman of financial information company Sageworks.
Find a good financial advisor
Once your business is growing quickly, it will need more cash to move forward and support this sudden growth. However, it is not always easy to handle, especially when growth comes with notable changes in your business. If you are not prepared properly in the planning and budgeting for these financial needs, you might face some unexpected challenges such as mismanaging money, cash flow problems and delayed or overpaid vendor accounts.
Therefore seeking a good financial advisor in this step is very crucial and it can offer many benefits to help you run your business wisely. They can quickly provide accurate financial projections that will help you manage your finance, as well as ensure that the business continues to grow.
When cash flow is good, you think it will always be like that. But if a company is growing, it has to invest much more than other companies. And profits usually won’t be enough to cover your investments. says Patrice Bernard, senior vice president, products and shared services at Business Development Bank of Canada.
Focus on keeping your quality clients
No one can deny that customers are the key reason your business is growing. Either you have just started your business, or your business is already mature, keeping in touch with your customers is always important. They are the ones who can make your business improved by providing with valuable feedback and insight into your products. They are also the ones who can turn to a competitor when they feel your business and your products do not match their expectations anymore.
When your business was small, spending time with your customers recognizing their own interest might be easier. However, even if your business has increased, you will still need to delegate more tasks and responsibilities to help customers achieve their desired outcomes. While you are managing the growth of your business, try not to forget the importance of involving your customers and listening to their opinions. It is therefore essential to make sure to monitor your feedback system regularly, keep an eye on social media mentions of your business, and have a plan in place for handling both positive and negative feedback.
Find the right employees
When you are a startup, it is essential to find the right team members who have the right mindsets to drive the business forward. To make your business strong and sustainable, this step remains important as your company grows. However, scaling up the people can be also one of the big challenges a founding member can face with since it is a difficult task to find people with the same motivation and the same mindset.
“Do we have the right people on the bus, and are they in the right seats on the bus?” asking this question continuously can help find the right people on the board. These are the people who have the ability to constantly challenge the young business system, and constantly be improving and developing their skills to achieve their own personal mission. Studies also show that founders need to be more open and need to insist on diversity when it comes to hiring new people since diverse teams from different backgrounds can produce better results with more innovative solutions.
Find a good mentor
Mentors can play a key role in helping the business grow with their own experiences and advice. When you are at the perk of your business success, seeking help and advice from an experienced entrepreneur can help you reduce a lot of stress and not lose time and money. They will help you improve communication and leadership skills, as well as provide with valuable tools in succession planning.
So please, take it from me: no matter how incredibly smart you think you are, or how brilliant, disruptive or plain off-the-wall your new concept might be, every start-up team needs at least one good mentor. says Richard Branson, founder of the Virgin group.
What other strategies and tactics can you recommend for a startup to managing a fast-growing business?
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