This guest post has been written by Howie Bick, founder of theanalysthandbook.com. As such the views/opinions/observations expressed herein are solely theirs; this Website may or may not agree with the same.
There are a variety of different issues that Startups face over the course of their growth, their evolution, & their development. The way Startups tackle the issues they face help shape the way their company is built, & the type of path they’re on. Whether it involves marketing, operations, or finance, there are a variety of issues or dilemmas that Startups continually face & have to figure out. The type of industry they’re in, the competitors they’re facing, & the type of management style of the company all play a role in how a Startup decides to progress & move forward. Here is the startups evolution journey.
How To Grow?
Each Startup or company has a different vision they foresee for themselves & for their company. The way a company decides to grow is one of the important elements to its game plan, & the areas they decide to pursue. Depending on where they see opportunity, where they see potential for growth, & where they’d like to grow their business, they’ll pursue different strategies or agendas. Companies tend to like to be the first mover within a particular industry, that way they can build up their brand name, & become the preferred choice for customers & consumers.
Where To Invest?
Each Startup has different areas or opportunities that they can decide to invest into, whether it be their operations, their marketing, or their finances. Depending on how well the company is positioned, the type of expenses or expenditures they may have, & any new products or services they’re looking to promote, the way a Startup invests their capital is important to their strategy & their growth. Another element that’s important to consider, is any upcoming expenditures or expenses that may be ahead. Startups that have upcoming expenses, may need to be more protective of their capital, & invest at a lower amount or a slower pace.
What Growth Rate?
Part of what a Startup is trying to do, is to grow & build a business that is strong & dependable. Growth is something that often accompanies costs & investments to make it happen. It’s sometimes difficult to slow down your growth when you’re experiencing success or improvements, but it can be crucial to your continued growth, & sustaining the growth already experienced.
Growing too fast at one point or another can hamper some of your future growth, & force you to cut back or reduce some of your future growth or future growth plans. It’s a tricky thing, finding the right amount of growth, & that balance with a Startup, especially when growth & acceleration is a major priority & one of the driving forces behind its development.
What To Budget?
Building off the previous question, budgeting or forecasting can be a valuable tool for any company or any Startup. Trying to forecast the amount of sales you may have, the type of staff or employees you may need, or the type of inventory you may need can help a company to be well-prepared & well positioned for managing of the day-to-day operations of the business. By getting a sense of how much runway you might need, or the type of capital you may need on hand, you can better prepare and plan for the obstacles, roadblocks, or investments that you may need to make. Without having an idea, or a budget to go off, a company doesn’t have a framework or a baseline to act as a guide.
When To Pivot?
Part of building anything, whether it be a business, a Startup, or a house, is knowing when to keep going & when to pivot & change course. Something that’s very important to keep a close eye on, especially when building a business, is the feedback & traction you’re able to gather. Depending on the type of feedback you’re getting & the results you’re achieving, you’re able to see what’s working, & also what isn’t’.
Once you’re able to see if a product is well received, if a marketing campaign is well communicated, or if a plan is working, you can then decide to keep going along the path or you’re on, or switch course & try a different idea or solution. It’s important to step back & decide when to keep going or when to try something else. Continuing to push or try something that isn’t working, can cause lots of waste, distress, & lack of progress at a company. Knowing when to pivot & try something new, is something all startups need to figure out, & decide upon.
Where To Innovate?
Within any process, system, or business, there are a variety of different touch points, & critical areas within the company’s infrastructure. It might be the process of turning a lead into a sale, transforming a raw material into a finished product, or moving along the process in place, there are different areas of a company that can be improved or enhanced through innovation. By recreating the backend of the operation, reducing the number of steps involved, or making the company’s more efficient or effective, there are many different ways a company can improve, upgrade, or innovate the operation they have in place.
The systems & processes a company have in place are many times the backbone, or the framework for the company. Creating a more efficient, or more effective operation can help a startup in many different ways from supporting an increased demand, producing at higher rates, or expediting the time it takes to go from beginning to end.
Conclusion
There are a variety of different questions, issues & dilemmas that Startups face during the evolution of their business. Figuring how they want to grow, the different markets, products, or services they want to explore is an important element to their strategy & game plan. There are many different areas a Startup can invest their resources in, be it their marketing, product development, or their operations. Finding the right amount of growth, or the growth rate they’re able to sustain, is important for continuing to grow, and not growing at a pace that’s too fast.
Each business or Startup has different types of seasonality, different types of staff or employee requirements, & different inventory levels they need that can be mitigated or improved by planning & budgeting. Along a Startup’s journey, depending on the feedback it receives & the results obtained, often times there are times it may need to pivot to try something new, or decide to stay the course & keep moving forward. Each Startup has a different structure or set of systems in place in the backend of their business, that provide opportunities to innovate & improve the efficiency, productivity, & performance the company is able to achieve. Each one of these questions can have different implications & evaluating the different options available is part of a financial analysts job description. Throughout the evolution of a Startup, there are a variety of different questions, elements, & factors that are important for a Startup to consider during its development that can help build & grow the business they’re working to create.
All in all, each Startup encounters & handles these questions differently, depending on the strategies it has, the leadership in place, & the opportunities available.
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Howie Bick is the founder of “The Analyst Handbook”. The Analyst Handbook is a collection of 16 guides created to help current & aspiring Analysts advance their careers. Prior to founding The Analyst Handbook, Howie was a financial analyst.
