According to available sources and statistics only some new products and startups will succeed on the market. In this article I share my observations from everyday work with international and local startups about what are the prerequisites for those who want to achieve prosperous growth.
Organized and methodical approach. The power of management by objectives.
When the team is small one of our most precious assets is our time. If we do not adopt a methodical approach, we will waste a lot of our time on chaotic actions which will take a lot of our energy but bring only minor results. When I observe the most efficient teams, they always adopt a methodical and organized approach, starting with setting the objectives.
Every team member should understand what we want to achieve expressed in numbers. And the everyday question should be how close we are to achieve those objectives. What do we need to do, to reach those objectives?
The OKRs are a great example of methodical way of thinking. Identify the objectives, identify the desired result and then design the simplest path to achieve them.
First think, then act. The power of planning.
Every action first needs a plan. Whether we launch a new product, or just think how to approach a new client or organize an event, we first need a plan and then implementation. A good plan starts from our goals and then shows the least complicated and most effective way to achieve our objectives, with the smallest amount of effort, time and money.
Startups should work smart first of all, because they work hard anyway.
Planning in advance is extremely important for startups, where people usually don’t have “spare” time. When we have limited resources, every team member needs a heads-up about what will come next, so that he or she can prepare for this task.
Understand your business model. The power of strategic thinking.
Every startup should have its business model. Business model is a great strategic framework to first think and then act.
I would like to emphasize here that the business model is not the same thing as the pricing model. When we sell our service in a subscription model it doesn’t mean that it’s our business model. That is a shortcut in startups thinking that I often come across. And this shortcut limits and narrows our perspective on how our business is working and how it can be improved.
Business model shows all the most important elements of our company, including:
- client segments
- value offer
- sales models and sales channels
- our key resources in the company
- our key partners
- our key costs
- and our key revenue sources, including pricing model
The business model shows us in a nutshell how we are organized to deliver this value to the market. On one sheet of paper we see how we earn money and how we are organized to do this. When we then go step by step through all its building blocks we can verify whether our company is organized in an efficient way.
Prioritize. The power of choosing what is most important.
When we are small, we often cannot afford to be excellent in all places of our organization and excel in everything at once. In order to move on, we need to prioritize and select those levers which will be our best springboard to make a huge step forward.
Good understanding of our clients, market and the value that they expect together with good understanding of our objectives and our resources should give us the idea where we need to focus first in order to achieve most.
Focus on results. The power of a good sales organization.
Without profitable clients there is no growth. So obviously, one of the most important areas in our business model are sales. Efficient sales teams are focused on results. If you want to succeed in sales, you need a result driven team. Achieving targets should be in their DNA.
The startups that begin to organize their sales should bear in mind that it undergoes a major transformation. Sales has made a huge step forward from the time of door-to-door salesmen.
The first thing worth emphasizing is that sales has become very strategy driven. By saying strategy driven I mean that companies need first to apply analytical thinking into how they plan to act in sales, otherwise they may lose lots of money and time without achieving their objectives. The crucial elements of this analysis are market and client segments. Small companies and startups should pay a lot of attention to who they target first. They should have their ICPs – Ideal Customer Profiles.
When you have limited resources you need to aim for those who are ready to buy now and are achievable for you. Analyze your possibilities and define your criteria of Ideal Customers – e.g size of the company, size of the Decision Making Centre, speed of purchase decision, readiness to buy, size of the budget, low entry barriers etc.
Once you have selected your target customers, you should sort out value offers for those clients and sales channels to reach those clients. If you want to do this properly, you need to understand your clients better. There is no sales without a good understanding of customers: who they are, how they work, what are their jobs and problems that we want to solve, how they make decisions, where they can be reached. In B2B sales it comes down to understanding their businesses and the way they act in those businesses.
The next thing you need to do is to structure an efficient sales process in the sales channels. Sales process is a step by step reflection of what we need to do from the first to the last contact with the client in order to effectively close the deal. The idea is that when we have those activities broken into stages, we can monitor them closely, verify and correct on a daily basis.
A close analysis of the sales process gives us a good understanding of the competences that our sales people need to have in order to successfully perform and achieve their targets. This in turn will show you how you should structure your sales team and how to set KPIs for them.
Focus on resources.The power of back office.
The concept of profitable clients is clear for everybody. More sales means more revenue and a bigger profit.
While your sales start to grow, you should pay close attention to how big it gets and take steps to ensure customers aren’t waiting too long for the delivery. For that reason you need to align the procurement and production teams with the sales team and make sure that the back office work is perfectly streamlined with sales predictions.
Especially in our turbulent times the efficient back office able to secure the delivery on time and on budget is our backbone that supports our head – the sales team.
Build processes. The power of simplicity and standardization.
When your team is small, you need to simplify as much as possible. Simplify the work organization by building clear processes where people understand what are their responsibilities, tasks, what comes first and what comes next. Standardize documents, checklists, offers whenever it makes sense and doesn’t cost you losing a valuable client who was expecting a more tailored made approach. Once well written and well prepared, they can be used many times and spare a lot of time for your team.
Focus on ROI. The power of understanding numbers.
The major threat in a startup is burning time and money on wrong business decisions. Always use numbers and analytical thinking to substantiate your decision. Is this expenditure worth our money and time? What will be the result? Will we get sufficient return on it?
Introduce KPIs for all team members so that they have clear numbers to aim at.
Introduce basic financial control so that you can clearly see the sources of your revenues and the sources of your costs. Examine all negative deviations, understand the reasons and introduce improvements.
Teach all the team about the importance of the margin. Margin means financial resources that can be reinvested to grow. Margin is hidden in everything the team does and is being killed by every wrong decision that we make: when we invest our time in wrong clients, when we take part in fairs and come back without hot leads, when we do the ad that no one sees etc.
Margin is also hidden in workload planning. Know how many orders you can process at a time. Know your capacity in the sales team and in the production team so that you can deliver to clients exactly what you have promised. And reflect this knowledge in the right structure of your offer – in the terms of delivery, in the service level that you guarantee etc.
Teach your team to think about business cases. Every product and every offer should have its business case calculated. How much will it cost us? What will be the revenue and when will start earning money and this product? What is the margin?
Recruit the right people. The power of attitudes.
The truth is that not all talented people will succeed in startups.
We need to understand that startup means an ongoing change and requires people who feel good in such conditions. People that are ready to build the structure, processes and standards from scratch. People who already know how to do it from their experience and will do it right from the first time.
Startups require people with knowledge and experience at key positions to teach others and create an efficient organization and work culture from the beginning. The effective startup managers are resilient problem solvers, strategic thinkers with perfect organizational skills and strong business acumen.
What should never be overlooked in recruitment is that startups need not only people with the right knowledge and experience, but also with right attitudes. Startups require people with a growth mindset: always open to feedback, learning quickly from mistakes, patient, resilient.
And last but not least – because startups need to grow with the limited resources they have, they need to work as a team. When people exchange information and join forces the work progresses much faster. That is why startups need natural team players understanding the role of communication and inclusion in building the team spirit. Mature leaders who treat the interest of their company and the team as their priority and who say “we” instead of “me and my team”.
Agnieszka Węglarz is an independent consultant, business strategist and practitioner in B2B and B2C, as well as lecturer, speaker and blogger. She has over 20 years of professional experience working as manager in both large corporations and SMEs, where she was responsible for strategy, marketing and business development. She uses her long term executive experience and training expertise to assist companies and their managers in building their business strategy using a workshop methodology. She specializes in business modeling, segmentation, value proposition, sales and marketing strategies as well as consultative selling. She runs her own consultancy business, as well as cooperates with Google for Startups Campus in Warsaw as the business modeling expert and mentor in the acceleration programs. Agnieszka is an author of many business publications. You can read her writing on her business blog on www.agnieszkaweglarz.com. You can contact her by writing to: agnieszka.weglarz@g2m.biz.pl or directly by sending a message via LinkedIN