Anyone who has started a new small business understands the myriad challenges that need to be overcome. Market conditions must be understood, a client base established, and product or service offerings packaged in an attractive form.
Many new business proprietors are also familiar with what’s been dubbed the ‘start-up hump’. This occurs as a new business tries to scale its operations yet finds that its growth rates slow and – in some cases – actually decline.
Businesses experiencing this phenomenon find that, although they have found a market for their product or service, they are struggling to take things to the next level. Many invest significant amounts in sales and marketing campaigns but accelerated growth remains elusive.
Embrace the cloud
In the past, growing a business necessitated making significant investments in supporting technology. Computer servers had to be purchased and managed together with networking equipment, desktop computers, and software applications.
Fast forward to today, however, and things have changed significantly. Rather than needing to purchase and manage their own IT infrastructure, start-ups and SMEs can ‘rent’ capacity from a range of cloud vendors.
This shift can make it much easier to overcome the start-up hump when it occurs. Additional storage and processing capacity can be dialled up as required and new applications sourced ‘as-a-service’ from a selected vendor.
Taking this approach means a growing firm will not need to find significant additional capital to fund its growth plans. Because cloud resources can be secured via a subscription model, they become an operational expense rather than a capital expense.
Take a five-year view
It’s natural that anyone managing a start-up business will focus their attention on day-to-day challenges as they arise. However, to overcome an initial slowdown and achieve sustained long-term growth, it’s important to look further ahead.
To be successful, business managers should take a much longer view and consider where they want to be in the next five years. This will allow them to establish the types of strategies and workflows that can be scaled over time and provide the support that their business will require.
A five-year planning horizon will also reduce the chances of a business investing in unnecessary assets or growing its workforce too quickly. Gradual expansion will be possible with much less risk that costs will spiral out of control.
Continuing to make use of cloud platforms is also important at this point. Storage and computer resources can continue to scale to match business growth while additional applications can be quickly brought online as required.
These cloud-based applications can be anything from customer relationship management (CRM) and accounting platforms to HR management and stock control resources.
Focus on mission and values
Another factor that is vital for the long-term success of a start-up business is maintaining a laser-like focus on its mission and values. Unfortunately, in many cases, business values are not prioritised in the early days of operations.
Once poor organisational culture forms, it can be very difficult to fix without resorting to business-wide changes that can have a negative impact on staff morale. To avoid this, the leadership team must clearly define its core values and then be seen to act upon them.
It’s important for a business to also communicate its values to all staff members on a regular basis. Having strong values in place is helpful not just for organisational culture but also to guide product and marketing activities.
History shows that, no matter how good an initial idea might be, too many start-up businesses fail because they spend money with diminishing returns until investors cease to fund them.
However, thanks to the availability of cloud resources, and an understanding of the importance of strong company values and culture, it doesn’t have to be this way. The next wave of start-ups firms has every chance of success.
