How to Build a Scalable Startup
The word ‘scalable’ is used frequently and as an entrepreneur, it is a term you need to become familiar with. Scalability is what investors want to see and what will lead to quicker success. But what exactly does it mean to be a scalable startup? How do you become scalable?
We have broken down the basics.
What is a scalable startup?
A scalable startup is a business that has the potential to easily grow and significantly increase its revenue with minimal additional cost.
When a startup is deemed ready to scale, it means it has already proven the success of its product and business model and is prepared to expand to new markets, regions, or demographics.
Example of a Scalable Startup
Many scalable startups operate within the technology industry. This is mainly because once a tech product has been initially designed, created, tested, and finalized, the cost to replicate it is minimal in comparison to the development process.
An easy example is a software startup. The initial development of the software can cost a lot of time and money, but to clone or mass produce it for distribution costs a nominal amount.
How do you make your startup scalable?
Understanding scalable startups is pretty straightforward, however, what leaves the majority of entrepreneurs puzzled is how to become scalable.
We have compiled a list of tips that can help you secure investor funding and experience exponential business growth.
1. Retrieve research to back up your business
Your product or business may be innovative, but you need market research and facts to support how your innovative idea will be the next big industry or money maker. This provides investors with context which will make them more likely to jump on the bandwagon.
2. Prove your product works
You’ve heard the saying “talk the talk”; becoming scalable tests if you can “walk the walk”. As awesome as your investor pitches may be, it does not hold a candle to showing your product work in real time. It gives you far more credibility.
Develop a Minimum Viable Product (MVP) and make adjustments to it based on customer feedback. Consider following the Lean Startup Methodology when developing your product to ensure it is a product consumers want. This can ultimately save you a considerable amount of time and money.
3. Have an attractive business plan
As cool and unique as your product may be, scalability to investors comes down to dollars and cents. Your business plan needs to show high profit margins, which can more easily be achieved by keeping your overhead costs as low as possible while still having enough momentum to grow. You should be able to show real sales of your product and that customers are willing to pay full price.
4. Recruit a solid team
To scale a business, you as a startup owner cannot be tied up with day-to-day business operations; your attention needs to be focused on big-picture strategy. To do this, you need to have a solid hiring process so you can acquire a team of driven and skilled people who you can depend on to keep the business running smoothly.
5. Implement an effective marketing strategy
Your startup needs to invest in marketing in order to scale. If people do not know your company or product, they will not buy it. Every company and product is different, and so is the audience they are targeting. Therefore, there isn’t one “tried and true” strategy to follow.
Develop an effective digital marketing plan or consider if following an account-based marketing strategy will be beneficial for your startup. We recommend recruiting a marketing person or working with a marketing agency that has the expertise you need.
6. Increase your startup’s efficiency
Eliminate or adjust any manual and time-heavy processes that hinder your startup’s efficiency which may include staff processes, administrative tasks, manufacturing, or others.
7. Be able to pivot and adapt
The global pandemic taught us that businesses must be able to pivot. Remaining open to better ideas, new products, and constructive feedback will show investors that you have the leadership skills to recognize what is best for your business and its growth.
To learn more and receive mentorship throughout your journey, inquire about joining a startup incubator that can provide you with the knowledge and guidance you need to scale.