We all want our start-up businesses to hit that coveted R1 million per year in revenue. The unfortunate truth is that only 4 percent of us actually make that goal.
This past year my company scaled LeadQuizzes, our lead generation software, past the R1 million mark in less than six months. Having hit that sales mark, I now know how important it is to maintain an awareness of where you are in your business.
That means really understanding: 1) The stage of business you’re in; 2) the fears and limiting beliefs holding you back; and 3) the keys to growing into that next sales bracket. Having this awareness creates more confidence and allows you to prioritise and take action.
Here are the five stages I believe that you and your start-up must go through to reach that understanding and hit that R1 million in sales.
Stage 1. Searching for product market fit
Your goal at this stage should be finding a product market fit. You’re likely excited at this point, but scared. Now that you’ve jumped in to starting your business, your plan for how to grow isn’t as clear as you’d thought. What’s more, you’re not making much money yet, which is scary.
You’re also starting to get distracted by lots of different opportunities for making money. Don’t let that happen; focus on your plan. And when talking about your business don’t feel you have to “fake it” and act more successful than you actually are, even though you’re worried whether things will work out.
Daniel Tyre of HubSpot For Startups told me that the key to success is to start by proving your value and attracting customers. He recommended offering discounts or doing work for free to create case studies and a track record of results.
Focus on the lowest hanging fruit, he said. And ask friends and family for referrals.
Stage 2. Moving from a part-time to full-time business
You made it out of stage one. You’ve built a small reputation for getting results. Most importantly, you’ve got customers.
At this stage, you’re most likely becoming overwhelmed from having to sell and fulfill those orders. You’re finding it difficult to keep up.
You know you need to bring on some help, but you’re barely paying yourself as it is. You’re not sure how long that steady stream of referrals and sales will continue. You also worry you’ll have a hard time letting someone else take over because you haven’t yet established repeatable systems.
Loren Howard of LLH Development and Real Estate told me that the key to graduating from this stage is to push through. Things will feel uncomfortable, he said, but if you can spend 70 percent of your time on sales-generating activities, you will feel more confident and able to bring on a virtual assistant, then, potentially, a full-time employee.
As your expenses and reputation increase, you should be able to increase the pricing discounts you offered your first customers, Howard said.
Stage 3. Establishing a scalable business model
If you’ve made it to stage three, your primary goal now is to establish a scalable and predictable business model.
At this stage, you’re most likely still feeling overwhelmed. You may have employees, but you’re personally wearing many hats. You need to hire more support, but you’re worried about generating enough consistent work, as you are still mostly reliant on referrals.
Related: 21 Steps To Start-Up
This makes it difficult to see the path ahead where you can scale. At the same time, you’re not extremely happy with your team’s performance because you haven’t created effective training procedures or clearly defined employees’ job roles and how they are to be held accountable.
To make it out of this stage, Emily LaRusch of Back Office Betties told me, you should make a major effort to shift from a referral basis to a predictable and scalable source of leads and sales. To do this, she said, use a tool like advertising. This is likely going to be one of the most difficult transitions in your business to date, she told me.
Continue to spend 70 percent of your time on sales-generating activities. You will need to set up basic tracking and systems to manage your sales and team around your new scalable business model.
Stage 4. Building systems and infrastructure for growth
If you’ve made it to stage four, then you need to start establishing better systems and infrastructure for growth. At this stage, most decisions are emotional ones because your tracking and metrics haven’t yet been established.
Now that a scalable business model is in place, you can focus on moving into stage five. Chris Ronzio of Organize Chaos told me you should focus at this point on creating job descriptions, standard operating procedures and key performance indicators for each role.
Once those things are in place, he said, you can begin to hire and increase your capacity. At this stage, you should improve your lead and sales tracking. You should also optimise your sales model and increase the amount of revenue you make per customer. As you improve, you will be able to scale your advertisements and hire sales reps.
Stage 5. Scaling your team and proven systems
Once you make it to stage five, it’s time to scale your team and proven systems. In stage five, your growth is probably limited by your technology and your people. Cash flow is still a stressor as you make more expensive hires and invest in technology and infrastructure to grow.
Once you gain clarity around what you need to do, and understand your finances, the stress will be reduced.
Scott Oldford of Infinitus recommended that you will most likely shift more focus toward hiring and training new team members at this point. That means more of your time will be spent on management. You will need to improve your technology to handle more advanced reporting and tracking. You’ll get the opportunity to finally accelerate and scale what is working.
If you don’t have an awareness of where you are in your business, and follow this framework to break into what the next stage is for you, then the chances will be greater that you’ll give up, not realising how close you actually were to achieving success.
This article was originally posted here on Entrepreneur.com.
Put On Your Wellies: It’s Time To Wade Into Risk
Entrepreneurs aren’t all leaping into the unknown like lemmings off a cliff, but they do need to consider it…
You’ve had a great idea. You’ve looked into its development. You’ve recognised that it has potential beyond just what Auntie Mabel and Mike From The Grocer think. And you’ve clearly nailed a pain point that can make money. Now it is time to take the risk of running with it.
Every big idea comes with risk. You can’t step out into the world of entrepreneurial thinking and business development without it. Your idea may fail. It will also be time consuming, demanding, hungry for money, and hard work. It is unrealistic to expect that your project will leap out into the world and be an unmitigated success.
It is also unrealistic to assume that it isn’t worth taking this risk.
There are steps that you can follow to ensure that your risk is managed so you aren’t blindly leaping off that cliff…
Step 01: Do your research
No, canvassing your neighbours, friends and family is not doing research. You need to know that your idea will appeal to a broad market and that it will have significant legs. This may sound like daft advice, but you would be surprised how many people think an idea will take off just because Susan in Accounting said so.
Step 02: Understand the costs
Projects are hungry for money and investment. Realistically work out your budgets and how much it will cost to take your project off the ground and then stick to it.
A calculated risk is a far better bet than one that shoots from the hip and hopes for the best. You can also use this as an opportunity to draw a clear line under where you will stop investing and end the project. If it keeps eating money and isn’t getting anywhere with results you need to be able to walk away.
Step 03: Know when to walk away
As mentioned before, this can be defined by a line you’ve drawn in the proverbial sand (and budget) but no matter where you draw this line, you have to stick to it. Often, when time, money and energy have been poured into a project it can be incredibly hard to walk away.
You think ‘but I have put so much into this, just one more’ and then it gets to a point where the ‘just one more’ has taken you so far down the line that walking away feels impossible. Leave. Learn the lessons. Apply them to your next project.
Mind The Gap
The entrepreneur’s guide to finding the gaps and building the right solutions.
Innovation may very well be the key to business success but finding the gap into which your innovative thinking can fit is often a lot harder than people realise. Some may be struck by inspiration in the shower, others by that moment of blinding insight in a meeting, however, for most people finding that big idea isn’t that simple. They want to be an entrepreneur and start their own high-growth business, but they need some ideas on how to find that big idea.
Here are five…
It sounds trite but networking is actually an excellent way of picking up on patterns and trends in conversation and business problems. The trick is to note them down and pay attention. Soon, you will find patterns emerging and ideas forming.
2. Look for pain
Just as networking can reveal trends in the market, so can spending time reading. The latter will also help you find common business pain points. These are the touchpoints that frustrate people, annoy business owners, affect productivity, or impact employee engagement.
Be the Panado that fixes these pains.
This is probably the most annoying of the ideas, but it is unfortunately (or fortunately) very true. Luck does play a role in helping you capture that big idea. However, luck isn’t just standing around and random people offering you opportunities. Luck is found at networking events, it is found in research and it is found in conversations with other entrepreneurs.
4. Luck needs courage
You may have found the big idea through your network, a pain point or pure blind luck, but if you don’t have the courage to take it and run with it, you will lose it to someone else.
Being bold in business is highly underrated because most people assume that everyone is bold and prepared to take big leaps into the unknown. However, not all brilliant entrepreneurs were ready to throw their family funds to the wind and leap into an idea – they were courageous enough to figure out a way of harnessing their ideas realistically.
5. Pay attention
This is probably one of the most vital ways of finding a gap in the market. Often, people are so busy that they don’t really pay attention to that niggling issue that always bothers them on a commute, or in a mall, or at a meeting. This niggling issue could very well be the next big business opportunity. Pay attention to it and find out if that issue can be solved with your innovative thinking.
5 Things To Know About Your “Toddler” Business
As you navigate this new toddler phase of your business, here are five things to bear in mind.
Ah, toddlers. Those irresistible bundles of joy bring a huge amount of energy, curiosity and fun to any family – but there’s also frustration and worry that comes with their unpredictability, as they grow and start to become more independent. If you own a business and it’s successfully past its “infancy” of the first year or so, it’s likely it will also go through a toddler stage of its lifecycle.
Pete Hammond, founder of luxury safari company SafariScapes, agrees with this. “Our business is now three and a half years old, and we’ve found that we’re not yet big enough to justify employing a large team of people to handle the day-to-day admin tasks, yet we still need to grow the business as well,” he says. “As a result, our main challenge is finding the time to step back and see the bigger picture. Kind of like when you are raising a busy toddler and you spend most of your time running after them!”
As you navigate this new toddler phase of your business, here are five things to bear in mind:
1. This too shall pass
Everything in life is temporary – and that goes for both the good and the bad. It’s as helpful to remember this when you’re facing the might of a toddler temper tantrum, as it is when you’re facing throws of uncertainty in your business. If your new(ish) venture is going through a rough patch in its first few years, it can be easy to think about giving up – but don’t. As long as you have an overall big idea that you believe can add value to your customers, keep pushing through the rough parts until you come out the other side.
2. Appreciate what this phase brings
The toddler years mean that the initial newborn joy is officially behind you. But these small humans also bring their own kinds of joy, as you watch them learn new skills, say funny things, and give affection back to you. While your two-year-old business may not hold the same exhilaration for you as it did during those first few months, there are now different things to appreciate about it: Maybe you’re expanding your product range, or employing new people who can take the workload off you.
3. Establish boundaries
Toddlers thrive on boundary and routine – and your toddler business will too. As it grows into a new phase, try and establish limits in terms of the type of clients you want to work with and the type of work you’ll do. It’s also a good idea to make a decision about the hours you’ll work and when you’ll switch off, which will help you establish a good work-life balance.
4. Take a break
Every parent with a toddler needs a break every now and then, even if that means a walk around the block (on your own!), a dinner out with friends, or even a few days away. The same is true for a demanding small business: every so often, remember to take time out to rest properly, where you switch off your laptop and completely unplug. You’ll return much more inspired and resilient to deal with the everyday uncertainty that it brings.
5. Give it space to make mistakes
While the unpredictability of a young business can be stressful and tiring, it’s also a time for trying new things without the risk of huge consequences if they don’t quite work. After all, it’s much simpler to change your USP if you’re a small business employing a few people, rather than a big company where 50 people are relying on you for their salary, or where you’ve received a huge amount of investment capital. While you may fail in some of the things you try with your business (in fact, this is almost guaranteed), see it as a toddler that’s resilient enough to pick itself up, dust its knees and keep moving forward.
During this phase of business growth it’s also essential to have the right type of medical aid cover. There are medical schemes such as Fedhealth which has a number of medical aid options and value-added benefits to ensure that your health and wellness is taken care of too. After all, the healthier you and your staff are, the more productive your business will be – during the toddler (business) stage and beyond.
While this phase can be frustrating, it’s a sign that your business is growing and adapting, rather than remaining in its infancy, and that can only be a good thing! So embrace the difficulties, learn from them, and watch as your business strides forward confidently into the next exciting phase.