Insider Interests: Where to Invest In Your Company to Encourage Growth

Insider Interests

The American Dream is alive and well stateside today. The trouble is, there are more big dreams than there are practical steps to keep new startup companies alive and growing. An estimated 50 percent of first year startups won’t live to see year number five. Your company can be different. What many entrepreneurs don’t know is something you absolutely can learn – where to invest in your company to encourage the growth it needs to survive – and thrive.

Ensure Sufficient Capital for the Startup Phase

You simply must have enough cash to survive the startup phase – if you don’t, you won’t be able to avoid closing your doors. This is the number one reason why most startups fail. Even if your product is perfect, even if everyone wants it, and even if you do everything right, if you don’t have enough cash to pay your overhead expenses while continuing to grow, you won’t have the staying power to realize on your own potential. There are many options for gaining capital from finding investors to taking out loans. Do what is feasible for you and will get you the best results.

Invest in Your Own Strengths

As the CEO of your own company, you have vision in spades. You have work ethic. You have patience and perseverance. But do you know when to say “no” and outsource some jobs to others? A common example is accounting and bookkeeping. Many CEOs of startups outsource these fairly routine number crunching tasks, even if they could do them. It just isn’t a good use of their time in comparison with playing to their strengths of developing their vision, marketing their company, making sales and generating PR. Another common example is the type of business startup you invest into. If you have a background in home furnishings, it makes much more sense to invest into your strengths in that area by starting a commercial cleaning franchise, rather than launching a business in an area that is new to you! Play to your strengths and delegate work you don’t have time for.

Know How Much Growth is Sufficient for Survival

While it can be hard to grasp, some startups have actually crashed because they grow too quickly. When a company accepts more orders than they can pay to produce, or sends a popular product to market before all bugs have been identified and resolved, a startup’s own success can kill it. But then again, this is more the exception than the norm. More startups than not fail to produce sufficient growth to survive past the five year mark. There is the growth you need to break even, and the growth you need to thrive. Know your limits and try to hit feasible target areas. You can use industry statistics as a starting point, but ultimately you need to invest your time in watching the numbers carefully so you know where to best apply your efforts and energy.

Create Your Business Plan around Cash and Growth

When you understand how much cash you need to keep on hand to keep your doors open and the growth benchmarks you need to hit to survive and profit, you have created for yourself a written blueprint for startup success. Now all you have to do is follow it!

This country thrives on entrepreneurship. Most startups that survive their own infancy become small businesses, which represent 99.7% of employer firms [Small Business Administration (SBA)]. The mentoring and know-how you need to achieve success as a startup is all around you in the successful small businesses you see every day. With careful planning, smart financing, knowing what to do yourself and what to outsource, and being willing to ask for help, you too can thrive as a startup.

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