4 Tips to Growing a Multimillion-Dollar Business With Zero Debt and No Investors
Despite the New York Times’ report that we’re in the midst of a “startup slump,” a staggering percentage of startup leaders would say otherwise.
When First Round asked founders whether they think now is a good time to start a business, 94 percent gave a resounding “yes,” according to the State of Startups 2017 report. Young people, in particular, are more than ready to flex their entrepreneurial muscles: A 2016 study by Barnes & Noble College found that 22 percent of Gen Zers — the oldest of whom are just starting college — plan to own a business in the future, and 13 percent have already achieved that goal in some way.
Related: Why Young Entrepreneurs Are Better Positioned to Succeed
When I started what eventually became NVE Experience Agency, I was in college and didn’t have plans to start a business. I certainly had no investments — only a passion to bring people together through networking events, mixers and premieres. At a time when Facebook didn’t exist, I had to get creative to generate awareness and find people who believed in my idea and would help me achieve my vision.
Not every budding business needs a board of mentors and a few million in investments to succeed. Aspiring business owners can make the most of their own resources, growing from scratch before breaking into the bigger scene.
Starting from the ground up.
When I started my business, I quickly ran into the chicken-and-egg problem most entrepreneurs face: I needed a portfolio of work to attract new clients, but to build that portfolio, I needed past clients I didn’t yet have.
Related: 8 Tips for Entrepreneurial High School Students Ready to Start Their First Business
My approach was proving to my few first clients that even without directly applicable past successes, I had a small arsenal of skills that helped prove my worth. Combined with my willingness to push the boundaries of what I thought I could achieve — even when it meant sounding more authoritative than I felt — I eventually got those first few clients to bite. Here are a few steps you can take to attract valuable clients, no investors necessary.
1. Invest in revenue drivers — then reinvest.
Invest in the ideas and, more important, the people who drive revenue. About 75 percent of early-stage founders agree that hiring is a No. 1 concern, yet they spend only about 20 percent of their time on it, according to the State of Startups 2017 report.
Once my business was up and running, my next challenge became building upon that success. Without investment capital, I had to stay two steps ahead, simultaneously executing one project while finding the next client. I struggled to avoid gaps in work and quickly realized that I could not manage every aspect of my business and continue to scale my company. With the money from my first contracts, I hired one seasoned event producer. Making that investment allowed me to focus on the sales and client acquisition that helped build momentum.
If revenue starts to dip, keep pushing to maintain the quality of the service. If the idea is good, the revenue will return, but only if the quality of the offering remains consistent — and you need people to help deliver on that consistency.
Related: I Use My Personal Brand to Drive Revenue. You Can Too.
2. Increase earnings by setting goals.
When money is tight, saving accomplishes the same goal as earning — again, as long as the quality of the product doesn’t suffer. Increase margins without cutting quality, even if only by a point or two, to facilitate growth.
Set concrete goals and timelines to guide the scaling process. According to old wisdom from Mark McCormack, author of “What They Don’t Teach You at Harvard Business School,” people who set goals earn more than those who do not, and those who set clear goals in writing earn even more. Additionally, the Strategic Management Society found that by simply making a plan, you can increase your success rate by about 16 percent.
3. Invest in existing clients before expanding.
After establishing an initial client base, add a new offering or service before attempting to expand to a new market. Sell more than one thing to a crowd of people who are already engaging with the company to increase margins and establish a stronger, more loyal base.
Starbucks’ customers are notoriously faithful — so much so that, in 2017, Foursquare crowned them at the top of its “Loyalty Index,” which interprets data from its app users to determine the “average annual visits per customer to each brand.” What continues to bring people back is Starbucks’ dedication to delivering reliable coffee, but the brand has also branched out to food and occasionally delivers fun drinks such as the Unicorn Frappuccino.
Beyond its products, the coffee giant has a hugely successful loyalty program to give back to customers through rewards and tailored offerings. Pouring into customers keeps Starbucks’ loyalists coming back, undoubtedly contributing to the company’s $19 billion in revenue and a market cap that surpasses $80 billion.
The point isn’t that you should go build out a rewards program, but rather that you need to truly understand your current customers’ or clients’ needs and act as a true counselor to meet them. Don’t simply execute on what’s asked of you; instead, get to the root of what will meet and exceed your clients’ identified goals. That’s what deepens relationships and makes clients likelier to increase business with you and refer you to their network.
4. Invest in yourself.
During the early days, I ate, slept and breathed my business — which didn’t leave me much time to actually eat, sleep or breathe like I needed to. Every entrepreneur struggles to set boundaries at first, and I’ve found that it only becomes increasingly difficult to maintain balance.
The lines of balance can get blurred when your work really is your life’s passion. But taking time to set business tasks aside has helped me learn to recharge and return to work every day with a fresh outlook, which ultimately makes me a better asset to my team and a more open-minded, effective leader.
Make sure you set your own routine as you begin your entrepreneurial journey. Multiple studies have linked the stress of being overworked to health issues ranging from insomnia to reduce cognitive function. On the other hand, according to Dr. Kathryn Smerling, a New York City-based psychologist, “The mental and physical benefits of taking time off work include improved sleep, a better headspace, more clarity and increased creativity.”
Budding entrepreneurs don’t need to attract big-name VCs and live in trendy cities to get their ideas off the ground. Anyone with drive and a bit of ingenuity can start a company from nothing.
Published at Fri, 12 Jan 2018 16:00:00 +0000
