From the get-go, startups need to anticipate and plan for rapid growth within their business and changes in their industry. Strategic decisions around resource planning and business development are crucial and plans need to be revisited (and sometimes changed on-the-fly) as time goes on and the business enters different stages of its lifecycle.
Versature, an Ottawa-based business telecommunications company founded in 2003, has experienced 450 per cent growth in the past five years. While this has been an exciting time for our company, we had to ensure that the proper mechanisms were in place to manage our booming, diverse customer base and to continue building on this momentum. Important decisions around technology investments, staffing, and other resource allocations had to be made.
Here’s a brief synopsis of how our business development goals have changed with our business over the years.
Proof of Concept Stage (Revenues less than $500k)
As is the case for most startups, Versature was faced with the challenge of launching with very few customers and not a lot of resources. We relied mostly on word-of-mouth and relationships in the Ottawa business community to get us our first few client wins. In this stage, we were focused on proving our technology and business strategy, so having marketing and sales teams were not a huge priority. My co-founders and I pulled up our socks and did the best we could with the resources we had.
To be specific – as the CEO – I personally took on all responsibility for sales and marketing; answering incoming calls, responding to sales inquiries, and figuring out Google Adwords in a hurry. My co-founders specialized in operations/billing and technology/innovation respectively.
Initial Traction Stage (Revenues $500k-$1.0M)
As our Hosted PBX services began gaining traction in the market and our customer base grew, we were afforded the ability to hire and train for hands-on roles that would allow the management team to take a step back from the day-to-day operations of Versature. We carefully hired people in operations, support, and our first sales person (all of whom are still with the company today). These first few hires were a godsend, allowing myself and the other partners a better opportunity to think about the company more strategically and long-term.
The sooner you can get yourself out of the day-to-day operations of your business the better, but the fact that we all did the groundwork initially meant we were better prepared to manage and train those new employees.
“Make it Repeatable” Stage (Revenues $1.0M-$2M)
This was a very difficult stage. We didn’t quite have the money to hire more people, but the workload just kept rising as our customer base continued to increase. If someone took vacation or was sick, we would all feel their absence. It was during this time that we invested heavily in processes, procedures, and technology in order to automate as much of our daily operations as possible. We invested in CRM, quoting, and billing systems because those tasks in particular were taking far too long via our manual entry systems. We sat down and documented every one of our procedures and made them repeatable by anyone.
This documentation and investment phase definitely slowed down our growth, but without the ground work we did in this stage, we would never have been able to break through the $2M barrier.
Scaling Up! (Revenues $2M+)
When we hit this stage it was obvious to me that it was time to make some big moves. Our processes were proven, our sales methodology was working, and our customers were enthusiastic. Even better, I felt that our operations team was getting back some spare time in their day because the processes, procedures, and effective use of technology we had set up in the previous phase had eliminated a lot of menial tasks that otherwise would have consumed their time needlessly.
I hired two hand-picked people into management roles (at the VP level) for both Sales and Marketing who had “been there, done that” and let them hire a broader team that they were comfortable with for roles in their domain. This hiring strategy has worked wonderfully for us! We’ve ramped up our sales and marketing teams by 300 per cent in the past six months, sales have never been higher, and our operations teams are keeping up.
Things get easier at this stage as you finally have the money to invest in getting the right people in the right seats. For me, it’s now about keeping my eyes on the road and making sure we’re headed in the right direction.
As your startup grows and becomes profitable, it’s important not to lose sight on innovation and product development. Versature strives to be at the forefront of our industry, and that means looking to the future when building products, services, and features that are not only competitive, but that set us apart from other vendors. The focus of your business should always be on creating and maintaining a strong product or service and planning your resource investments around that. This is what will keep your business in the growth stage and allow for many long, happy years of business!
Photo Copyright: Sergey Nivens
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.