When starting a business, that "big idea" you have may not immediately bring in as much revenue as you'd like it to. Though you've built a startup from the ground up, the end goal of every entrepreneur is to watch that new company grow.
Recently, I was advising a friend who felt stuck in the process of growing his startup. As I sat down with him over coffee, I asked him a few simple questions and, after talking through his answers, he immediately felt unstuck. He walked away from our conversation with newfound clarity and confidence about how to grow his business faster.
Here are 3 questions to answer to jump-start your startup's growth:
Question #1: What's already working?
The one thing your new business needs, more than anything else, is momentum. Momentum is critical for keeping your energy and spirits high as you deal with the inevitable ups and downs of building your company. The key to gaining momentum is to identify what’s already working, and do more of that activity.
Use the Pareto principle to your advantage. This principle (also known as the 80/20 rule) states that roughly 80 percent of all effects come from only 20 percent of the causes. For example, if you look at your business, you’ll likely find that 20 percent of your marketing activities are resulting in 80 percent of your revenues. And if you look closer, you’ll likely find that 20 percent of your customers account for 80 percent of your sales. (Often, these ratios are more like 90/10 or 95/5.)
In my friend’s case, partnerships were the biggest factor in his company’s success so far. In a relatively short period of time, he had attracted some very powerful partners who were capable of delivering thousands of customers to his business. Because partnerships were already working, the conclusion was to focus more energy on cultivating relationships with existing partners, as well as bringing new partners on board.
Question #2: What's not working?
Next, identify what's not working. Where are you stuck? Look for areas of your business where you've been banging your head against the wall. Then, instead of persistently trying to fix what’s broken, I recommend that you stop investing your energy in that direction.
My advice goes against the grain of conventional entrepreneurial wisdom. As an entrepreneur, you’ve probably been told that perseverance is the key to success. Though that's true, the problem is that you may not have enough time or resources for unlimited spins of the wheel. That's why I recommend you put what's not working on hold, and instead focus your resources on what's already working.
Where was my friend stuck? He had been focusing virtually all of his time and energy on search engine optimization, even though SEO wasn't generating any meaningful revenue for his business. For that reason, I advised him to pause his focus on SEO and invest the majority of his resources into partnerships.
Question #3: What's missing?
Finally, with your focus on what’s already working, look for the missing links and leverage points. What’s the one thing that could help you get more results? What are the specific action steps that you can take during the next 30, 60 and 90 days?
In my friend’s case, we took a look at his current partnership opportunities and came up with a list of specific co-marketing ideas to present to his biggest partner. Then, the next week, my friend approached his partner with these ideas -- and he is now finalizing a deal that will likely generate tens of thousand of dollars in revenue for his startup over the next several months. In addition to the revenue, my friend now has a greater sense of clarity, momentum and confidence.
If you want to gain momentum in your business, answer these 3 questions. But don’t just answer them in your head; discuss the questions and answers with your team. Print out your answers on a piece of paper and keep it visible on your desk. Commit to your implementation plan for a minimum of 30 days, and enjoy your company's newfound growth!
Pete Kennedy is co-founder of Main Street ROI, a company that teaches small business owners how to implement online marketing best practices. Main Street ROI has helped hundreds of small businesses create profitable online marketing campaigns, and also publishes step-by-step reports about online marketing.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.