The rate at which startups fail is genuinely shocking. Something like 50 per cent don’t make it through the first five years, and only around 30 per cent make it to ten. One of the problems that many startups have is that their growth strategy is always a few years around the corner, rather than right now when they actually need the money.
Cash flow is king, but novice entrepreneurs don’t seem to understand this simple concept, believing that they can rely on the capital of others while their plans unfold. Unfortunately, this isn’t how the investing world works. Worse still, it’s not how the real world works either: success breeds success. Waiting around for conditions to be perfect is rarely how millionaires are made.
So what can you do to grow your company in the here and now to reach that critical scale you need for success? Take a look at some of these immediate growth ideas to boost your cash flow.
Start Investing In Talent
When Elon Musk was first trying to grow Tesla into the $50 billion business it is today he realised that he needed the best people in the world to make it happen. Immediately, he started looking for talent whenever he could find it in the auto industry so that he’d be able to build his factory. Eventually, he found an ex-Citroen engineer who had built factories for the French car company all over the world. Widely regarded as the best in the business, this engineer set to work on the Tesla factory in Fremont, California, promising to deliver automation savings that would make production in the US economical.
Part of Musk’s success is due to the success of that factory, especially when producing the Model S. And so Musk proved that having great talent in your organization is indispensable. Talented people drive growth through their innovation and ideas. These are things that can’t be bought from suppliers.
Always Play To Your Strengths
Entrepreneurs, in general, tend to be people who are interested in overcoming their personal weaknesses as a strategy for success. But applying this approach to business might not be a good idea, at least according to Entrepreneur contributor, Rob Biederman. He says that companies that succeed are not only those that play to their strengths but ignore their weaknesses, at least at times when they need to grow.
There are many examples of this occurring in the business world. Apple, for instance, practically gave up on its Macbook during the early 2000s, pouring all its resources into the iPod – it’s music platform.
Check Your Revenue Streams
Many businesses have a viable product that will sell in the market, but they fail to make it easy for customers to get hold of it. Just look at the effort that companies like Amazon go to to make it easy for customers to pay. One-click purchases take all of the hassle out of filling in online credit card detail forms.
Make sure that you make the purchasing experience as seamless as possible. Using a credit card merchant can help if you physically interact with your customers. Creating an app which saves payment details is best for online companies. Always be on the lookout for ways to make payment easier, including offering subscriptions for your services.
Measure The Changes You Make
It’s all well and good making changes to your product and service to try to force growth. But if you do not measure the impact of your efforts, you could be making costly errors. A/B testing provides you with a way of discovering which methods work best to boost revenue, especially in an online environment. Also, keep an eye on indicators in your business that are associated with growth.
Copy The Competition
Each company has its strengths and weaknesses. Some, for instance, are excellent at marketing but fall down on product quality. Others have excellent products, but can’t organise their supply chains to meet customer needs.
Although the prevailing wisdom is that companies must do something different to succeed in the marketplace, there’s usually no harm in copying the competition, especially if it’s something procedural that you’re not very good at. Look at things like how they attract new people, what job perks they offer, how they interact with customers on social media, and what they do to ensure growth in the future.
Also, check if your competitors have a different strategy to you and look at their previous company statements to see if they’re making them more money.
