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For any successful company, making the decision to start scaling is the most difficult moment. Just as time cannot stand still, corporations must always move, which suggests growing if they are doing well. Put simply, a competitor will step in to fill the gap.
Throughout my journey as a business leader, I have all the time viewed the need for expansion as a perfect problem. This is proof and testimony that every part is going well and that the next stage of the company’s evolution already requires a solution. The key is to get ahead of this and plan for expansion. For me there have been seven key metrics.
1. Secure adequate financing
Cash is every part, and having it means you can grow your business. The style of capital you select needs to be tailored to your specific business goals. Choose your partners correctly, especially in the starting. Having now been a part of two startups with very different experiences, I might say it is vital to have like-minded investment partners when looking at equity rounds or growth capital. Are your investment partners really partners or do they simply have access to your checkbook? Are they really excited about your mission and vision and want to help you succeed? They won’t run your business for you, but they undoubtedly have extensive experience in seeing what works and what doesn’t as you grow your business.
I all the time want my investors to stay with the company throughout its lifespan. Venture capitalists have an obligation to provide returns to their investors over a five- to seven-year time horizon, so sometimes these interests are tied only to a specific stage of the business.
Never underestimate the vast amounts of non-dilutive capital available, akin to small business innovation research grants from the U.S. government, charities, wealthy individuals, and even friends and family.
When considering debt, it is often essential to consider the rate of interest. If you are not confident that you will give you the chance to repay the loan, debt takes priority when the business is in trouble. The government also offers low-interest loans for certain varieties of businesses, which could also be attractive depending on the style of business.
2. Prioritize strategic spending
How will you use the funds? Can you self-fund or bootstrap without delaying your schedule? This is a fundamental query that can not be avoided. I’m often tormented by the dilemma between saving money and losing speed.
My mother all the time said, “Don’t be a fool or a penny,” and that phrase stuck with me. Spend money if it can help you achieve your goals faster, don’t do it if you’re undecided. If the dollar you spend doesn’t generate a 5x return on the value created, don’t spend it.
3. Verify product-market fit
Do you have product market fit? If the answer is no, you’re not ready to scale. The saying “build it and they will come” is false and all the time has been. You are not building a temple. You’re building a company that creates a product that individuals want to buy, so make sure that is the case.
I all the time ask, “Does my product offer value to the customer and are they willing to pay for it?” This applies no matter whether you run a B2B or B2C business. Flat sales indicate a need for more traction, and rapid growth is not sustainable. Strive for smooth and regular growth and learn what works and what doesn’t as the right channels to leverage your business.
4. Master your message
Pitching is an art. Do you have a lowered voice pitch? One thing I’ll always remember was that Steve Jobs used to prepare 90 hours for every hour-long presentation he gave. This is degrading to me. For me, practice is 100% key. There’s something improper if you cannot showcase your business or deliver your offering even when you’re hungry, dehydrated, and exposed to the desert sun.
The best business leaders tell a compelling story. Create a compelling travel story that may leave investors, consumers and buyers wanting more and feeling FOMO if they do not reap the benefits of it. I have all the time spent many hours refining my tone, refining it, fine-tuning it, and trying out different words and phrases to see what resonates most with the listener or audience. You need to crush your message, so give it the time it deserves.
5. Develop an execution plan
What is your execution plan? Companies fail because they run out of cash due to poor execution. Write it down. Save…then…save. Whole. It could possibly be a notebook or a 275-page slide deck – whatever works best for you and your team. Follow your plan. Only deviate from the plan when the lessons learned from the execution plan indicate that you need to change course or try something different. I all the time follow my plan. And be patient.
6. Realistic pricing
(*7*) valuation is a mistake. We are not in the 2021 bubble. So focus on gaining operating capital and executing your plan. The right investment partners will all the time maintain you because they make money if you make money. I all the time say that if your idea and business are successful, the money will come.
7. Practice self-care
Don’t burn out. Burnout is a real thing, and if you’re too burnt out to run your business after a raise, what’s the point? Practice self-care, practice yoga, eat salads, get a mani-pedi, go out for smoothies or smoothies with friends. I understand that your life is your business, but there is no business without you. Recharge your batteries if needed and step away from your company for a while. I’m the worst at listening to this recommendation, but I promise that nothing will disintegrate if you spend a long weekend visiting family or sitting on the beach absorbing the sun. Do it for yourself and your company will profit.
Following these seven metrics, which are not structured or prioritized but are simply a checklist, should bode well for any successful entrepreneur looking to build an empire.