The third in Kashlow's series of guest blogs from business experts comes from Rishi Chowdhury of IncuBus London. Here Rishi takes you through some steps to carefully consider when your business is fortunate enough to be experiencing rapid growth.
So, you’ve worked your arse off and have established your startup in the market. You’ve found a product/market fit; you’ve got some paying customers, started to build out a team and need to find that next gear to take this from a hustling startup to a large company.
I’m afraid it doesn’t get any easier from here. ‘Mo’ money, mo’ problems’ as the Notorious B.I.G put it. But it’s a big and exciting step. Below are a few tips to ensure a steady ship as the company enters the transition to rapid growth.
It’s always tempting to start looking at new opportunities, especially when you can see your core product/service growing steadily. The problem is spreading the focus between multiple products/services or even features can disrupt the current growth.
By no means stay static and watch market shifts carefully but stay focussed to your mission and look to make the most of the growth you’re already seeing. Scale that and dominate the market and then consider further expansion.
As a rapidly growing startup, revenues will hopefully be increasing but so will costs. The faster you grow, sometimes the quicker the company can die if it starts going in the wrong direction.
Maximise your limited resources and look to dominate the market you’re seeing success in.
Sorry, this one is not sexy, but oh so important!
As the team grows so does the likelihood of more confusion and inefficiency should you not have effective processes in place. Guidelines should be in place to ensure that everyone knows what they need to do and that staff are not duplicating efforts.
Processes need to effectively offer a structure to the day to day activities but not to the extent that it stifles creativity and autonomy. The ‘Process Pendulum’ puts it well, and you’ll more than likely swing through over process and under process as you look for the right balance.
Ensuring employees know the importance and reason for the processes put into place ensures they’re much more likely to adhere to and look to improve them rather than ignore them completely.
Picking the right KPI’s make a big difference to understanding if you’re focusing on the right activities. It can be easy to look at the numbers which are good and focus on keeping those, but they may not be effective in hitting your long to medium term strategic plan.
Measuring everything and looking for insights to judge success or a future path can also be dangerous and shift focus in the wrong direction.
As you shift from the early stage startup looking for product market fit to a growth stage startup, your KPI’s will change. KPI’s such as monthly recurring revenue (MRR), customer satisfaction, customer churn and renewals etc. become more important.
When choosing the KPI’s to focus on, make sure they are aligned with what drives your overall goals.
It is also key to look at where you’re spending your money and how this impacts your business objectives and ultimately your bottom line, directly and indirectly. This will help you better maximise your ROI and growth as well as extend your runway.
It’s important to keep reevaluating the KPI’s your measuring to ensure they’re still relevant.
Your business is only as good as the staff you and your team hire. Bad eggs can spread quickly and have a negative effect on growth very quickly. That negativity can also become difficult to stop when it starts to spread.
Culture isn’t just beers on Fridays, Ping Pong tables and bean bags, culture is the core values and beliefs that resonate through the company inside and out. It gives your employees something to work for beyond a salary.
With rapid growth comes a greater mix of personalities and cultures to manage. Make sure there is a clear mission and goals that everyone can work towards. Everyone in the company should know what this is. Communication is the biggest factor in keeping a strong culture as you grow.
As part of this, the working environment, transparency and influencers within the company play an important role. Keeping the culture within a rapidly growing company is a daily task not a quarterly team dinner. As founders, you need to set the example and ensure that it resonates as it flows down through your company.
There are many more factors that lead to the successful transition from scrappy startup to big business but I hope this gives you a good grounding as to what to look out for as you start to make that shift. Having seen this rapid growth first hand in many UK startups I know all too well how exciting it can be, but unless it is managed well it can quickly turn into a disaster. Hope to hear of your success!
KashFlow is cloud based accounting software specifically designed to make managing your accounts easy, so that you can concentrate on the big matters, like growing your business. As well as taking care of your accounting needs, KashFlow enables you to easily create professional invoices using your logo and even add cashless payments to enable you to get paid instantly.
To find out how we can help you save time and effort, just call our Onboarding Team on 0844 815 5779 for a free 1–2–1 demonstration of our software.
Originally published at www.kashflow.com on October 28, 2016.