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Anita Ginsburg
Anita Ginsburg has written 38 articles for SB Informer.
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5 Ways Startups Can Prepare For Future Growth

Anita Ginsburg

June 21, 2016


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Planning for growth gives startups a chance to define their goals and the strategy to achieve them. Despite their best intentions, however, startups often become distracted by their daily routine and seem unprepared to manage growth. Rather than losing the opportunity to increase their customer base and profitability, startups should prepare for future growth in the following five ways.

Think Strategically

Planning for future growth begins with having a strategic vision. A long-range view equips firms to organize their decision-making processes and allocates resources in ways that make the startup capable of growing in sales volume and market share. Startups that think strategically hire the right people. Look for potential employees that have the right education like an analytics degree online. Rather than economizing on labor, such firms will invest in team members that have the experience and talent needed to support growth. Strategically minded startups building channels for horizontal and vertical communication to improve their operating efficiency and ability to identify growth opportunities. Constant environmental scanning gives firms the ability to become leaders in their field by creating rules for their market rather than deferring to their competitors.

Understand Limiting Factors

Business owners and managers must continually evaluate the performance of their firm to identify growth constraints. Cash flow problems and staffing limitations can choke startups, preventing them from taking advantage of opportunities to win big deals and enter new markets. Sometimes training and developmental constraints limit sales and marketing efforts, preventing a company from reaching its potential. Startups can prioritize their efforts in ways that eliminate obstacles and lay a solid foundation for growth.

Consider Outsourcing

Startups often lack the cash and labor resources needed to take advantage of unexpected growth opportunities. Businesses should prepare themselves for growth contingencies by maintaining a list of potential investors and outsourcing partners that can help a company quickly adapt to market changes. Third-party providers can supply startups with everything from manufacturing or call center capacity to IT services, and financial partners can receive cash flow pressures caused by inventory and staff expansions.

Mergers and Acquisitions

Rather than spend time and money developing products to compete in new markets, firms can buy companies that already serve those markets. Just as Google acquired Nest and Apple bought Siri, startups can quickly enter new markets through mergers and acquisitions. Similarly, businesses can expand in their existing markets by either merging with or acquiring firms that can supply needed capabilities or capacity.

Vertical Integration

Startups can prepare for growth by using either forward or backward integration to help them achieve their goals. Backward integration strategies increase the control a company has over its supply chain as part of the effort to improve the availability and quality of its products. Forward integration gives firms more control over the customer experience. Either way, startups can capitalize on the power of their brand by expanding into business areas that can potentially increase profits.

Startups should build plans and goals for growth into their business strategy so they can identify and react to opportunities and eliminate constraints. Companies that use the above methods to prepare for growth will recognize and act upon opportunities as they emerge so they can unleash their full potential.


                   



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