Achieving an overnight success is a great idea, however, for your company to truly reach its full potential, this success has to last. In order to consider yourself a successful enterprise, you need to achieve a continuous growth over a longer period of time. Unlike reaching that overnight success, this has nothing to do with chance or outstanding set of occurrences. With this in mind, here are five tips to sustain a growth of your startup, as well as make it much more consistent and reliable.
One of the first things everyone needs to know about startup growth is the fact that not all metrics are equally important. For instance, while no one disputes that a greater number of likes on your post is a great thing, this is not a metric that directly leads to increased sales, profit or even traffic. While shares increase your reach, whereas likes offer no boost, except for the one to your self-confidence. It is exactly for this reason that they are listed amongst vanity metrics.
In order to ensure that your company is on the right path, you need to decide which metrics to measure. For instance, your sales, the number of new customers per month and the number of return customers are all incredibly valuable to your brand. A growth in traffic, average conversion rate and even click-through-rate are also important. The first step in sustaining growth is knowing with 100 percent certainty that you actually are growing. When it comes to this, these metrics can be of an immense help.
Every single person that makes a purchase from you has a 27 percent of chance to come back. After they’ve made a second purchase, the chance of them returning the third time rises up to 45 percent. Once they’ve completed a third purchase, the chance of returning for more rises to about 54 percent. In time, the end result of this is the fact that only 8 percent of all your customers are responsible for about 40 percent of your entire profit.
On the other hand, there are only two reliable ways to generate return customers. First, you need to offer an outstanding service the first time a new customer comes around. Second, you might want to look for various methods of efficient post-sale follow-up.
You can’t do it all on your own. However, this doesn’t mean that you should simply hire more people but rather share some of your administrative, financial and legal responsibilities, as well. Running a sole proprietorship puts your personal assets at risk, which is why you shouldn’t be reluctant to protect yourself by selling some of the shares in your company. To get started, you need to make your business shareholder-friendly and the best way to do so is to offer a well-composed term sheet. Apart from taking some of this burden off your back, this can also refill your budget and give you a cash flow boost.
A growing company has a greater profit, right? Does this also mean that it has more money in its account? Of course not! The absolutely worst thing that a growing company can do with its hard-earned cash is to stockpile it. You need to invest in your company! Improve your marketing campaign. Outsource your customer service in order to improve its efficiency. Purchase new equipment in order to boost productivity. Share some bonuses and make some promotions in order to increase morale and invest in talent retention. To make the long story short, don’t be afraid to burn cash. Still, don’t be too eager to overinvest either. Both can be quite dangerous when done without careful consideration.
Today, most industries are completely saturated, which means that differentiating becomes much harder. However, what if your company was to sub-specialize? In this way, it would be much easier for you to dominate the niche and become a go-to brand for that narrow set of services. Sure, this also means shutting your business off from a huge potential demographic, nonetheless, some sacrifices have to be made for the sake of progress.
At the end of the day, you need to understand where it all leads. Growth for the sake of growth is definitely not a great philosophy. Because of this, you need to have some clearly set aims and goals from the day one. If you manage to set them properly, you will have a much easier job at both directing and sustaining your growth for years to come.
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