Startups are the toast of the business world, especially among the ambitious and educated youth. Education need not be a must, but a ravenous ambition is the fuel that drives many startups to success.
Not every startup can be successful. Many commence business with big goals and fall flat on the way very soon, but once you are on the right financial path, crossed the milestones you had set for your startup, achieved your goal, have the right manpower and a strong and sustained cash flow, then it is time for you to sprout wings to fly to new heights. In short, it is time to scale up your startup.
But this process too needs careful planning. You cannot bank just on past success. Here are five tips to scale up your startup:
#1. Begin with basics, scale up later
At the core of any startup is your customer. Who are they? What are they looking out for? Ensure that you deep-know your ideal customer and what is that you want to offer or their problems for which you have a solution. Many customers make up their mind on who exactly they want to work with. That being the case, you need to sync your business with their expectations.
For example, you have a startup that aims to build a website for non-tech founders in order to boost their business. In this case, you have to focus on the thought process behind the founders and exactly know what they are looking out for. Never deviate from their needs by offering exotic solutions or feed them with tech gyan. Don’t beat around the bush by explaining the intricacies of technology; this will never impress them, on the other hand, it may put them off. Focus on what the customer is ultimately looking out for. The journey may be important, but the goal is what the customer looks out for.
Your main focus should be on the right audience; this is one magic that can help your startup grow faster. There is nothing like understanding your customer needs. Based on the needs, build more focused products, and tailor the product to the needs of your customers or consumers.
Any scaling up of your startup will need three key resources — money, people, time. So, scale up only if you have these key resources.
#2. Keep what your best at to yourself, outsource the rest
Startups sometimes have the false appetite for having a huge team designed to do just about everything. This is a wrong way to start. Mind you, only large companies need to have a large in-house team. This is commonly seen in the manufacturing sector – like cars, scooters etc. Even here, many components are outsourced. Airplane manufacturers outsource the manufacturing of doors, seats etc to ancillary units.
Startups just cannot afford to hire a large team. You need to sit and think about what is your key or core areas in your startup. Keep that to yourself and outsource the rest. Choosing between in-house vs. outsourcing is not a difficult task. It needs some creative thinking and the art of prioritization.
By outsourcing, you not only save on costs but you can use that extra time and energy on further developing components that are in your core basket. Or even plan the road ahead.
#3. Be smart in picking up your marketing channel
You may build the best state of the art products, but potential users need to know about these products. So, before you start scaling up, create an awareness among your potential users. They need to know about you and your products.
For this, you need to pick up a marketing channel which understands your line of business. There are many marketing channels, for example: SEO, content marketing, SMM, direct marketing, influential marketing etc.
But do not choose all. Most successful startups get the most customers from just one marketing channel. Since you may be operating on a shoestring budget, do not risk spending too much valuable time figuring out which channel to abandon and which to focus on. Just choose the one that understands your expansion needs.
#4. Measure Your Success
Before scaling up, you need clear cut objectives. If you are trying to get customers without a clear set of objectives, it’s just a waste of resources and time. Without objectives, your efforts would end up as random activity sans benefits.
So always audit your metrics and check on them constantly.
Here are some activities you need to keep a tab on constantly:
— Monthly recurring expenditure (MRE) or annual recurring revenue (ARR) — how much your product is capable of making over a period of time;
— Customer acquisition cost (CAC). This is the money you spend on attracting every new customer;
— The lifetime value of a client (LTV). This would give you an idea of the profit you are likely to make from one client during the whole period of business.
Next comes user engagement. Look out for the following:
— Active users every day, when they come in to check your product on line and from where.
— Number of user sessions and lengths.
— Customer loss (shows the number of users who abandoned your product)
Keeping track of the above metrics would enable you to understand where you stand in the marketplace and if there is a need for course correction.
#5. Technology is the key, keep investing in it
Automation is a must for any startup. Repeat activities need no manpower. Moreover, scaling up comes at a cost and startups cannot afford to be labour-intensive. Ushering in newer technologies can help in making it easier to gain more scalability with less labour. Artificial Intelligence (AI) is the new flavour of the virtual world.
Businesses seldom use one software for all; they run on multiple and sharpened products depending on what your company needs.
In today’s world, the most common ones are:
— CRM can store data about your customers. This will help you answer customers’ questions faster, improve marketing strategy, and analyze common buying patterns.
— Accounting software to create timely and accurate reports and make financial decisions and projections. There are plenty of such software products in the market.
— Even if your startup is small, human resources are important. There are easily adaptable HRM software products that can help you manage people and automate manual tasks.
— Today, digital marketing tools have grown smarter; and they continue to sharpen their tools. Such tools would help you create focused marketing campaigns and measure their effectiveness.
To reiterate, automation is key. Know what to automate and when. You can use the software to automate different internal and external processes. This does not mean that you start issuing pink slips to employees.
Automation can lead to a reduction in costs and minimize manual work. This can help you to deploy your team members to more important and creative tasks. Automation can also reduce the risk of human error and save a lot of time.
The bottomline: scaling up your business is usually much more difficult than launching it. But with some creative thinking and smart moves, you can find your audience and scale up your startup. The five tips enunciated above will help you do that faster.