Entrepreneur and famous author Seth Godin once said, “The problem with putting it all on the line is that it might not work out. The problem with not putting it all on the line is that it will never (ever) change things for the better. Not much of a choice, I think.”
There is a delicate balance act involved in running a startup and leading it to its next venture. Deciding to take the plunge and scale up your business is one of the most important decisions you will make whether it’s hiring more employees or renting a larger office space. If you take the plunge too soon, you might find yourself underwater with no escape route. The lean startup movement has told us that getting too big, too fast isn’t just a way to kill a startup – it can also prevent it from innovating. Here are some vital questions you should be asking yourself before scaling up your startup business:
What was your revenue growth in the last 6 months?
The only way to know for sure that you need and can afford another full-time employee is by assessing your last 6 months of growth, rather than looking at your entire financial history. The last 6 months are the most telling when it comes to predicting growth trends going forward.
What new positions would you hire for, and are they essential for your business?
When new business comes in and you don’t have the staffing you require, it can be easy to make snap hiring decisions. The problem with that is the wrong hiring decision can be a costly mistake you can’t afford to make. Not only will you have spent time finding and interviewing the right candidate, but you will also have spent a considerable amount of time and resources on training and onboarding. Assess what full-time positions are crucial for your business, what can be handled by freelancers, and hire purposefully.
Are there any other solutions for the problem you are trying to solve by scaling?
Startups who are cash conservative are held in higher regard by investors, mentors, and the business world in general. In a Forbes article called 5 Sure Signs A Startup Firm Will Succeed, Cheryl Connor says “Lean operations are the name of the game, and the ability to stretch and conserve early stage funds, even if greater funds are available, is a significant sign of future success.” There are options out there to help you stay lean: partner with another organization to give and receive in-kind services you are not always able to perform yourself; apply for grants; boost your inbound marketing efforts; and automate some of the more monotonous tasks using a CRM.
Letzgro is passionate about working with startups, and we specialize in offering technology solutions that are customized to each client. When we built software for our startup client Cream.hr, we were able to deliver a solution that helped them launch to market with very little access to capital. By assessing need, growth potential, and budget, Letzgro helps startups scale at a pace that is right for them. Learn more about what we can do for your business.