Starting a business is an exciting time. But once you've got everything in place, opened your doors and are actually starting to generate revenue, the natural question is; what next?
Standing still isn’t an option. It's still the case that many small businesses fail before they ever have a chance to grow, with US government statistics estimating one in five won't make it to their first anniversary and only a third surviving for ten years.
Therefore, to avoid adding to these figures, you need a clear growth plan that will set you on the right path for years - and hopefully decades - to come.
If you want to fast-track this growth, there are a few key steps you'll need to take. Here are a few pointers to keep in mind.
Step one: know your market
Market research is an essential part of any startup's growth. You should already have some idea of what the marketplace looks like from your initial planning, but if you're going to grow, you need to dig deeper. Be sure to keep an idea on what your key competitors are doing (if you don't know who these are, you really should by now!).
This isn't just about knowing the products or services they're offering, but how they're going about it. What does their website look like? Are they running any promotions? Are there gaps in their social media outreach you can exploit? You might have the better product, but if your user experience isn't as polished, you won't win customers over. All this information can be used to find a niche and guide your own growth plans.
Step two: understand your value proposition
What do you offer that your competitors don't? If you can't answer that in a couple of sentences, you won't be able to present a compelling story to potential customers. Your value proposition is what sets you apart, and needs to be front and center of your growth strategy.
This should guide everything you do, from how you market to new customers to defining your firm's core values. It's especially important if you're looking for additional funding to kick-start your growth. If investors don't know what you're bringing to the market, they'll be much less inclined to risk their own money with you.
Step three: develop a clear sales process
Consistent, positive cash flow is essential if you're to expand your business, and this is made much easier if you have a clear strategy in place for attracting, converting and retaining customers. This should be tailored to your business, but can include everything from how long it takes you to send a follow-up email after first contact to what sale promotion you have in place.
A well-defined sales funnel can be hugely helpful to scale up your business quickly, as once it's in place, it can help automate many aspects of the sales process and ensure you're delivering a reliable customer experience and offering the right incentives to boost conversion rates and generate ongoing loyalty.
Step four: make the right hires
Any business is made by its people. But for startup firms, having the right employees in place is even more crucial. A bad hire can cost thousands of dollars in lost productivity, wasted training and staff turnover. And if you've only got a handful of employees, these costs are even more harmful as they account for a substantial chunk of your revenue. Fortunately, there are a number of things you can do to ensure you're hiring the best people for your team.
It's important to look beyond their résumé and assess how they'll fit into your business' culture and how they can help grow the firm. When there aren't many employees in the office, you need people who are passionate about what they do and will fit seamlessly into your way of working. There's no point hiring someone who looks great on paper if their personality doesn't complement the rest of the team.
Step five: have a strategy for scaling up
How are you going to reach that next level? Are you going to open up new product lines, or perhaps open up a second location? But however you choose to scale up, it's important you do it responsibly and don't try to run before you can walk.
Overreaching on spending is one of the most common reasons for a small business to fail, with one study estimating almost three-quarters of high-growth startups fail because they try to go too big, too soon. If you're looking to take out a loan to cover the capital investment needed for growth, for instance, make sure you can cover the repayments even if your revenue projections turn out to be over-optimistic.