It’s no secret that startups need both money in the bank and customer growth to succeed. While it can be a delicate balance to strike, the following eight female founders have done just that — proving it’s possible and sustainable to increase a company’s runway without compromising the rapid growth needed to thrive.
Their insights provide a look into the inner workings of growing startups and the areas they’re choosing to focus on to ensure long-term success. Not only are these tips valuable, but they are duplicatable and actionable enough to be implemented as soon as a startup makes the decision that they’re ready to grow.
Critically Measure ROI
Founder and CEO, Happyly
My Tip: COVID-19 caused us to take a critical look at spending and start measuring ROI in every aspect of our business. If spending wasn’t creating revenue or putting the product in a must-have position for our community, it went on hold. We learned to do more with less and the energy on the less actually had a bigger impact. We have a culture of “test and learn,” which helped us focus more on what we were testing to stretch every dollar.
My Focus: Everything we are doing now is around driving user numbers and signing new partners with what we have in anticipation of pushing hard for growth in the new year. Conservation without compromising growth is core to our being.
Restructure Payment and Billing Cycles
Co-founder and Chief Creative Officer, Scout Lab
My Tip: One of the best-kept secrets I discovered as a new founder was to evaluate my payment and billing cycles. After taking a look and adjusting just the timing of our billing and our payout to employees, we’ve been able to more comfortably grow month to month because the timing of when bills get paid is properly aligned. This does not require more money, just re-structuring of your current system.
My Focus: As a business, we are more focused on increasing revenue, as growth will often require more capital and we are in the growth stage of our business. With that said, the best way to create more revenue without gaining new business is to cut back on costs starting with anything that is month over month. All of the everyday costs of running a business really add up, so never forget to review your costs on a regular basis and cut anything that isn’t necessary.
Utilize (Oftentimes Overlooked) Free Services
My Tip: We have utilized the free tutorials on Shopify to learn about social media advertising and created our own campaigns in-house instead of seeking outside help. I was incredibly impressed with the actionable advice given on Shopify Compass courses and the results we generated. In addition, rather than outsourcing graphic design, we work with user-friendly graphic design websites such as PicMonkey and Canva to create and edit website and social media content without any prior graphic design experience.
My Focus: Right now, we are focused on revenue, but we definitely operate on a self-funded shoestring budget. As a new brand, we are careful to experiment with our website, marketing, and advertising in a measured way to ensure that we learn best practices, as well as what specifically works for us before putting any real funds behind it.
Create Mutually Beneficial Partnerships
Founder and CEO, Liberate Studio
My Tip: Make friends! Seriously, creating meaningful relationships with like-minded brands is highly cost-efficient, not to mention it often brings you joy and new ideas. I recommend reaching out to brands that range in size and all deeply connect with your mission to explore opportunities for blog takeovers, social giveaways, event collaborations, and the like. We are stronger together. Through organic brand partnerships, Liberate has seen over 250 percent growth in six months.
My Focus: We’re focused on increasing revenue at the moment, while simultaneously saving costs. I think it’s important to have a hierarchy of goals so it’s easy to make important decisions with confidence. For us, increasing revenue is No. 1 and saving cost is No. 2. This thinking allows us to continue to grow without the fear of investing in ourselves and also to make decisions that keep costs low, like hosting an event ourselves instead of outsourcing, or exploring organic partnerships instead of paid advertising.
Accept Investments Selectively
Nathalie Molina Niño
My Tip: As a founder and now, an investor, I find that being selective about who you take investment from is the most critical factor in preventing time and money from going to waste. I’ve never seen anything eat away at the runway worse than a meddling, overly-involved investor giving out bad advice and insisting the founder take it.
My Focus: I’ve always prioritized revenue because my goal is to build things that last, not flip businesses the way that some people flip houses. So while there’s no one-size-fits-all answer here, what matters is what your end-game is. If you don’t mind being kicked out of your own business, then focus on raising more money above all else. But everyone else should focus on efficiency and growth.
Negotiate Payment Terms
My Tip: Payment terms! I’ve gotten into a better habit of negotiating payment terms with certain vendors. There’s a lot of opportunity to push things out 90 days, or even get on payment plans with inventory.
My Focus: I would say I’m more focused on increasing revenues right now, but it’s probably a 55/45 split. I’ve invested more in the team to help me scale certain areas of my business that are not my strong suit. Although I was saving money trying to do it all myself, it certainly wasn’t as effective as I’d like it to be, and most of my partners have already delivered on my investment. To keep a balance, I maintain a performance measurement system with every partner or vendor we bring on, be it an independent consultant or a SaaS platform.
Build an Expert Advisory Board
Katrin De Haen
Co-founder, The Fourth Floor
My Tip: Many founders believe that they need to hire experts to fill their knowledge gaps. But what they really should be doing is finding and enlisting those experts to be on their advisory boards. Building out an advisory board will not only save founders money, but those advisors will become their champions, offer their networks, and can help them grow and scale effectively by mitigating any of the costly pitfalls that can deteriorate the runway quickly.
My Focus: We are primarily focused on increasing revenue as that will diminish our reliance on sponsors and funders, which gives us more freedom to evolve in an organic way with less pressure to please outsiders. We are a membership community and more revenue also means more members, which makes us stronger and in turn will present more opportunities for our members.
Experiment With New Ideas in a Lean Way
Founder and CEO, Serenflipity
My Tip: When I received angel investment, I staged the funds to hit key revenue-generating milestones and focused on using the money on targeted experiments that would grow the top line. It was almost like creating micro-investments in my own product pipeline, knowing some would take off and some would fail. This gave me the runway to try new things, explore what was gaining traction in the market, and to then use the funds on the areas with the most growth potential. For example, instead of launching an app with high overhead, I created a text message service using the software that hotels use. A friend pretended to be an “adventure concierge robot” and we discovered that the value was not what we thought it was. Our “robot” revealed that she was a real person and engagement took off like wildfire. People were looking for connection and for nudges to try new things. Users even started confessing personal challenges and sent handwritten thank-you notes to her. If we had just doubled down on an app, we would have missed this valuable discovery and spent almost all of the investment.
My Focus: I’m focused on increasing revenue through investing in small micro-experiments in my business. This experimentation allows me to nurture a handful of different ideas and see what’s generating the most value and potential revenue, so that I can use the profit generated and further capital to bring a promising experiment to life. The micro-experiments help me test out hunches, try new ideas without a ton of pressure, and to see what’s gaining traction with a much lower cost. It also gives me a North Star to know where to double down in the future, as well as where to scrap activities or ideas that aren’t having impact. It feels like a dance at times!
About the Author: All womxn featured in this article are members of Dreamers & Doers, a private collective that amplifies the entrepreneurial pursuits of extraordinary womxn through visibility opportunities, resource exchange, and collective support. Dreamers & Doers is an official female founder resource on 500’s Female Founders Hub.
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