When you form a startup, expansion is probably one of the first things that come to your mind after successfully living through the first couple of weeks of your business. How do you expand, where do you expand, and how do you finance your expansion? These are the common questions a business owner might ask themselves.
However, where is the line drawn? When do you upgrade from being a startup? There are many factors that contribute to this, and it’s not like someone will visit your office and hand you a plaque that says “You’re not long a startup, congratulations!”. Upgrading from a startup is more akin to an inner feeling of success, such as feeling financially stable, such as being able to think about the future instead of worrying about the present, or being able to provide the necessary services and opportunities for your members of staff to prosper.
Departments and Employee Numbers
One of the things that screams “real business” is the number of employees you have. A startup typically begins with just a single person: you. As you upgrade your business and the demand increases for your services or products, you’ll start to outsource work. Outsourcing is a much cheaper method of getting temporary work done. Things like logo or graphics design, website maintenance and technology upgrades should be bought as a service when you are starting out. Only when you need these tasks done on a regular basis should you upgrade to having a department.
For example, if your website is one of the main attractions of your business, it’s going to require a lot of maintenance and upgrades. To do this effectively, it’s cheaper to hire an employee to work in-house with you as opposed to outsourcing it. Outsourcing is only cheaper and more effective when it’s a temporary job, which is usually the case for managing a website. However, if it needs to be done on a regular basis, then it makes sense to have an employee handle it. You could train them, build up trust between you and your employee, and have them work closely with you so that you can communicate more easily about changes or issues.
Hiring your first employee should be treated as a major landmark in your business. It’s a cause for celebration because you’re no longer a sole trader working alone. With employees under your wing and salaries to pay them, you’ll feel like a much more accomplished business owner.
One of the hallmarks of a well-established tech company is their independence and self-sufficiency. They do rely on standard software packages like Office 365 and Adobe Creative Cloud, but they create custom software for all sorts of uses. For starters, a company might make software to keep track of their vehicles. A transportation company that works in a complex logistics network will most likely have custom-designed software that is made to order and according to the company’s specification. Instead of paying for a software package that is ready to go, an established company will create their own tools to match their needs.
Another good example is when a company develops their own mobile apps or dashboards for their services. For example, if you are running an outsourcing company that specialises in graphic design, then you could create your own web interface that allows your freelancers to take requests, respond to feedback and also deliver their finished products to their assigned clients. The web interface would also be usable for the clients themselves to track the progress of an order, receive visual updates and also request changes to be made on the fly.
Have your own software has its drawbacks, however. If you want to keep the software and apply it to another business in the future, then you need to make sure you own the license and that you contact software escrow services should your business go bust and your software left in licensing limbo. However, aside from that minor setback, creating your own proprietary software comes with major advantages that will make you feel like a proper business, not a small startup.
Step out of Your Comfort Zone
The key to a diverse and successful business will be in your ability to adapt and change. Microsoft, for example, is known for creating the world’s most used computer operating system. Despite that, they have ventured into the video gaming console market, they used to have their own video game development studio, they are creating one of the world’s most powerful portable laptops, and they have even released their own full-sized desktop computer that rivals the legendary iMac.
A diverse portfolio is needed if you want to succeed in business. You can stick to your niche and spend your entire life perfecting it, but you aren’t going to get as much exposure as you could if you decided to branch out and tackle other industries or products. If you step outside of your comfort zone, you give your business an opportunity to learn. Your products will have to change or you’ll make new ones, your advertising team will adapt to new conditions and trends, and you will personally learn new strategies and methods of dealing with potential pitfalls and expansion concerns.
A business that can’t adapt to market trends is a business that will not succeed. Ride the waves that your consumers are creating if you want to grow into a large corporation to be reckoned with. If you don’t give yourself or your company room to grow, then you will forever be a small business that can’t find a way to break into the big leagues.
Pay Attention to Customer Service
Customer service is one of those components of a business that few people pay proper attention to. There’s almost no reason why you shouldn’t, and the consequences that stem from poor customer service could be fatal. First and foremost, you need to think about how you can make the customer experience above and beyond what they are used to. For example, if you manufacture computer components, then think about what the major problems in the industry are. For starters, computer components are prone to failure because of manufacturing defects and questionable quality control. If you value the customer experience (and you should) then you need to ensure your components are of the highest quality and have been tested numerous times before being packaged and shipped to your customers.
Computer components are also prone to failures either due to mishandling or neglect. In these situations, most computer component manufacturers wouldn’t help the customer unless the damages can be fixed and you can refurbish old components. Some manufacturers, however, make it their job to provide excellent customer support and will replace components with newer versions regardless of if the damage was due to the fault of the customer or not.
This kind of customer service is what gives a company a customer for life. Sometimes, losing a bit of money on a sale due to returns and refurbishment can be worth it because stories of your brilliant support will be shared across social media and various communities. People will hear about your services and your attention to your customers, and they will pick you over competing brands.
Invest Back Into Your Business
A lot of people start a business because they want to make money. That’s absolutely fine, but there are times when you need to think of the bigger picture that surrounds your business. A lot of companies report either no profit or a loss in money and to the untrained business owner, they instantly assume that the business isn’t doing well and that, eventually, they will go bust. However, this is a shallow way of thinking and what many businesses are actually doing is investing back into their business in order to see accelerated growth.
For example, if you make a lot of profit in a single year from your business, a lot of people will decide to distribute that wealth and give bonuses to their employees and to themselves. After all, if you worked hard and gave it your all, you deserve a reward, right? Successful entrepreneurs don’t think of business in the same way. When they make money, it instantly goes back into the business so that they can grow it. They’ll expand the business, set up new locations, break into new markets, or even hire a couple of extra employees.
But when would you stop investing in your business? It all depends on you. Some entrepreneurs will never be satisfied and take money away for their personal use when they can use it for their business. They will continue to invest in their enterprise until they are old and retiring.
Growing a business from a startup to a business requires bold moves, and that should be the focus of your growth plan. Sticking in your comfort zone does nothing for your business, and you should be eager to expand and grow if you want to be a successful company. Take calculated risks, step out of your comfort zone, and grow your startup to a large business.