Scaling Your Startup Users, Customers, Clients — Female Founder Club
A startup is a company in its inception stage that has the plan or goal of becoming a larger enterprise.
This definition would exclude lifestyle businesses such as making and selling arts & crafts, selling digital downloads, dropshipping businesses, consultancies/agencies, or any other type of business that does not have the potential to scale.
4 Dimensions to Scale Your Startup.
- REVENUE
2. NUMBER OF CLIENTS/CUSTOMERS/USERS
3. TEAM
4. OPERATIONS
1. Scaling Your Startup Revenue
The first (and most important) is scaling revenue. A startup should be capable of scaling its revenue beyond the 10 million dollars per year mark. If your company’s future financial projections cannot feasibly reach 10 million in revenue per year, within the first 5-years, it isn’t a start-up.
2. Scaling Your Startup Users, Customers, Clients
The second dimension a startup can scale across is its reach to gain users/customers/clients. In the above-mentioned lifestyle businesses, one typically cannot reach beyond a maximum amount of users and customers because there simply aren’t that many customers in the market or the business lacks the capabilities to expand.
For instance, in the case in the case of a marketing consultancy, how long would it take for the consultancy to reach 100 clients?
We can imagine with aggressive sales and marketing tactics, the consultancy could possibly reach 100 clients within a year. But how long would it take for that same consultancy to reach 1000 clients in a year?
3. Scaling Your Startup Team
This brings us to the 3rd dimension a startup across, team.
As a company begins to scale its revenue and its number of clients, it needs a workforce to facilitate these efforts.
With the advent of remote working, this challenge has become much easier over the past few decades.
However, if you have a more traditional company such as a manufacturing firm or one that requires your staff to be on-site on a regular basis, you have to consider ways you can scale your location and the costs associated with it.
Likewise, there is an additional cost beyond the cost of the location and hosting your workforce. Other costs include labor costs and salaries, insurance, taxes, holiday leave, parental leave and many other factors to consider.
So, while scaling a team to 10, 100 or even 10.000 employees sounds impressive, the costs increase proportionally as you scale.
4. Scaling Your Startup Operations
Can you imagine the number of consultants (scale of the team) and operational duties (scale of operations) that have to take place in order to facilitate their business efforts?
To be fair, large consultancies such as the Big 4 have found a way to scale their consulting practices beyond a certain number of clients and have a global reach spanning across multiple countries, cultures & currencies.
However, there’s a reason we call these titans the Big 4. It would take decades to build a consultancy from the ground up and reach their levels of operational scale. As a matter of fact, the Big 4 have been in business for over 200 years!
In summary, when we say that was founding a start-up we are founding a company in the inception stages with a plan of becoming a large enterprise.
This should be reflected in your business plan and financial projections before you found a startup.
I hope that you found this post insightful!
If you’re interested to learn how I can help you address specific bottlenecks in your startup, I also offer 1:1 consulting.
During our session, you can ask me specific questions about your startup ideas, operations, financials, recruiting, marketing, sales and/or professional development.
Originally published at https://privatlux.squarespace.com on November 15, 2019.
