The ultimate goal of every startup is to scale quickly and then keep scaling. To grow rapidly and generate and handle demand, startups need to hire the right people, get their marketing just right, but most importantly think fast, and act smart. All the while, it’s essential to stay true to their initial idea and not to lose their core values and ambitions. Integrating new people and processes while maintaining the quality of your products/services takes its toll on any business. Many struggle to cope, and ultimately fail.
In the following list, we’ll go through some basic, albeit often disregarded tips and tricks on how startups can quickly grow without losing their core identity. We’ll go through building a sales funnel, managing your customers, keeping your loyal audience while acquiring new leads, and ensuring you keep your promises. In the end, we’ll go through your best chances of getting the right financial coverage for supporting your ambition. Pay close attention, and think about how you can use this advice to manage your own business.
Focus on your customers
Customer management becomes increasingly demanding as your business scales, and the only way to keep up is to transfer to cloud-based software. SalesForce helps with customer management, Quickbooks covers accounting, and InfusionSoft integrates your customer management AND marketing efforts. Most of the software mentioned above works similarly, with only slight differences, such as design or the number of features available in the free version. The process of getting your employees used to using said software shouldn’t take too long, mostly due to the user-friendly design.
This might sound surprising, but if you want to scale – you mustn’t make your old customers take the back seat to acquire new ones. This is both cost-effective and stimulates growth. It will take you up to 3x more money to sell to new customers than existing ones. It’s crucial to focus on establishing a loyal customer base. Send discounts and reminder follow-up emails after shopping cart abandonment. Offer special treatment to customers who have shown you loyalty. The best way to do this is to offer permanent discounts and small gifts such as dinner at a high-end restaurant, a weekend at a spa, or tickets to a play. This will help you retain customers AND make your potential customers compete for buyer privileges. Treat your repeat customers right, and your sales will skyrocket in no time.
Sometimes, more is less – and learning what you should let go of is tricky
When most people think about scaling, they imagine an increased workload that required more resources and more workforce. This, however, is only a part of the full picture. Legacy web pages, legacy user and front-end development design, and outdated management practices sometimes all need to go. And before you apply new, improved business models, you’ll need someone to decide how to cut costs. Even without realizing it, some processes might be slowing your business down. The best way to identify drawbacks and get rid of them before implementing new, smoother operations is a fresh pair of eyes. Employing new members of the management team who will work with the people you have already learned to trust will help improve your business.
Protect Your Startup
Startups are inherently a high-risk proposition. This is why it’s essential to think about securing startup insurance.
Growing startups have a unique risk profile when compared to other businesses. It’s a reality that most startups are a bad liability claim away from financial disaster. To properly mitigate the risks startups face, it’s crucial to create a tailored risk management plan, which should include the following policies:
Directors & Officers Insurance: D&O policies will cover the company and its leadership from claims related to breach of fiduciary duty, lack of corporate governance, and mismanagement. Additionally, venture capital companies will require you to secure this coverage before investing. VCs will want to join your board of directors, and they’ll want to know that their assets are protected.
Cyber Liability Insurance: Most startups rely on technology and online capabilities for their value proposition. This makes them vulnerable to cybersecurity threats. A preferred cyber policy will protect startups in case of a data breach or cyber-attacks. A good cyber liability policy will pay the costs of notifying those affected by the cyberattack, liability damages resulting from class-action lawsuits, business interruption costs, and more.
Employment Practices Liability Insurance: Having a strong employee practices liability policy will help pay for claims related to employment – such as sexual harassment, wrongful termination or demotion, failure to promote.
Technology Errors & Omissions Insurance: Should it be alleged that your startup hasn’t met its contractual obligations or caused damages to a customer or partner, the company could face an expensive lawsuit. An E&O policy will protect you from claims that stem from a failure to perform professional services.
Try and find the right investor for you
For most startups, it will likely take years of operating on outside funding before they succeed in garnering a sufficient customer base to generate profit. This is why working with a reliable investor is essential. It’s hard to let other people be involved in the decision-making process in return for funding, but this is something that startup founders will need to learn to navigate. First of all, understand that there’s room for you to negotiate the right deal – the more successful you are at improving your work processes and increasing your workload, the more leverage you’ll have to choose the right investor. It’s good to meet in person and understand who you will be working with. You can read this comprehensive guide if you want to learn more about attracting venture capital and raising funding.
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