The 5 Steps to Growing Your Startup
Establishing a startup is only half of the battle. Once you have created a startup company, you will need to grow it. The growth stage is where most entrepreneurs will fail. Growing a company is an incredibly delicate process, throughout which many companies are very fragile. When growing your startup you will need to be extremely conscientious and careful. Growing either too quickly or too slowly could spell disaster.
1. Run the Numbers… Carefully
The major problem that affects most startup companies is that they grow too fast. You cannot assume that your growth will continue beyond a certain point, especially if your product is something that could potentially saturate the market. You should go over your books with a fine-toothed comb until you’re absolutely certain that growth cannot damage your company. If you grow beyond your current revenue, you run the risk of running out of money entirely. You will need to create a plan that allows you to grow at a steady pace without your costs exceeding your revenue. Growing in stages is often the key to creating a stable and robust company that never exceeds its own grasp.
2. Secure the Necessary Funding
Once you have a plan in place, you should be able to secure the necessary funding. You may need to approach individual investors or find alternative means for funding. While some companies are able to grow purely on the basis of their own funds, an injection of cash is always helpful. You will need a buffer of cash to support you in the event that anything goes wrong. At this point you should have an exact figure that you need to raise and you should know exactly what the money will be used for. You should never move forward in growth unless you have the resources required to support it.
3. Create Contingency Plans
You should create contingency plans for anything that could potentially occur throughout the growth process. This includes knowing what to do if you lose a large client, knowing how to react if you can’t secure certain deals and planning for large periods of time without revenue. Contingency plans will give you direction in the event that the worst case scenario occurs, and this creates a stable base upon which you can plan. During the growth of your startup you may experience periods much like when you first started your company. The revenue may not come quickly or it might not come at all for some time. You should have a plan in place to scale downwards if it seems that you’ve grown too fast.
4. Delegate Intelligently
As your business grows, you will need to be focused on the larger picture. Jack Dorsey, founder of Square, said, “Everyone has an idea. But it’s really about executing the idea and attracting other people to help you work on the idea.” You won’t be able to manage the day-to-day tasks as you previously could. While you still want to retain the majority of control over your business, you will need to delegate certain tasks to ensure that you have enough time to focus on growth. When delegating tasks in a startup, you may feel that you need to be loyal to those that have been with you from the beginning. Despite this, it’s very important that you put the right people in the right positions from the beginning.
5. Get Organized
The final step before growing your startup is to create a system of organization and maintain it. Organization is absolutely critical for those that want to grow their startup and it is where many business owners will falter. As you grow your business, it will quickly become unwieldy and difficult to manage. You will need to juggle many tasks at once and you won’t always have the time to go over records. The larger your company grows, the more difficult organizing it will become. Starting with the appropriate organization will help further down the road. Most businesses will need an accounting system, customer relationship management software and enterprise resource planning software as the cornerstone to their organization. A physical file system will also need to be developed.
Growing your startup should be an exciting process. When growing your company, you know that you’re already on the right track. You simply need to make sure that you don’t do anything that could be potentially damaging to your company either in the short-term or the long-term. While this may seem easier said than done, many of your instincts will often prove to be correct. Many startups fail not due to any core issue with the company but through impatience and lack of research.