Wednesday, September 15th, 2016.
- An article written by Sarah Niedoba, www.profitguide.com
When it comes to advice about growing a startup, buzzword-filled clichés are easy to come by. “Thinkfluencers” are all too happy to talk about the importance of “synergy,” “disruption” and “innovation,” without managing to offer any real suggestions on how to achieve those things.
The truth is, building a successful company from scratch takes a lot more than a great idea. The young firms on the 2016 STARTUP 50 ranking of Canada’s Top New Companies are proof. Each one has increased sales significantly over the past two years, thanks to smart, practical, no-hype tactics for reaching the right customers and scaling quickly (or, to veer back into startupese, to accelerate their bleeding-edge ventures into unicorn zone). Here are five of their top tools.TOOL 1: AN UNAMBIGUOUS BUSINESS PLAN
Even though it might feel like an unnecessary slog in this era of beta testing and quick pivots, a concrete business plan is still invaluable to a nascent enterprise. Just ask Eric Kaplan, COO of Trend Financial(STARTUP 50: No. 49), a financial services company offering automotive loans to people rejected by banks. He started the business by researching what kind of financing options were available to consumers, looking for gaps and, essentially, reverse-engineering a strategy based on where he saw the greatest opportunity. “We built our plan on elements other businesses were unable to undertake,” he explains.
But Kaplan didn’t stop there. He knew he and his partners would need money to get the venture going, and he knew an airy-fairy business plan wouldn’t impress investors, so he dove deep into the data. “Before I even started writing the plan, I needed all the facts to substantiate everything,” he says. “I’ve read a lot of business plans [that were] based on gut feelings and opinions. What made mine so strong was that I could provide research to back it all up.”
Shortly after he finished the plan, Kaplan got a meeting with a hedge fund, as part of Trend’s initial round of fundraising. He was intimidated but confident in his numbers and the trajectory he’d mapped out. He also made a point to clearly articulate the investor protection included in the plan. A few weeks later, the fund agreed to invest.
Kaplan understands that many of his fellow millennial entrepreneurs might consider such a thorough approach stodgy or—worse—cripplingly rigid, but he doesn’t feel committing to a plan inhibits his firm’s agility. “I have never written a business plan that didn’t allow for flexibility,” he explains. “I embed many what-if scenarios. This allows me to consider alternatives should any of my assumptions turn out to be incorrect.” At its root, a good business plan doesn’t have to lock you into a fixed trajectory—it just has to prove you’ve thought the journey through.TOOL 2: PROOF THAT YOU ACTUALLY ADD VALUE
Every company ought to have an ironclad answer to the question, “Why should I buy from you?” For a startup with little to no track record and a short (or non-existent) client list, that can be tricky.
You can start by letting prospective clients lead the way. “Typically, we ask a potential customer to explain to us why they’re looking for a solution,” explains Tyler Eyamie, CEO of Fusebill (STARTUP 50: No. 39), a five-year-old Kanata, Ont., firm that sells an online automated billing subscription platform. “Then we talk about ways in which our platform can solve their problems.” This sales tactic transforms a conversation that might otherwise have been an interrogation about past milestones and marquee clients into a collaborative brainstorming session about possible solutions.
Fusebill will then show clients how its platform works, with customized demonstrations. It also leans heavily on the backgrounds of Eyamie and his co-founder, both of whom worked for more than 10 years at another billing systems company. This solution-focused approach was an important factor in landing early clients, whom the company quickly asked to provide testimonials—which it has, in turn, leveraged to bring in more business.
It’s important for all entrepreneurs to be able to explain and demonstrate their company’s value, says Kurt Lynn, a consultant who specializes in business growth. But, he says, it’s especially crucial for new outfits with no easily quantified achievements. And it’s something too few bother to do in their excitement to build the business. “I ask entrepreneurs to explain what their value proposition is, and time and again they will respond with a list of 15 things,” he says. “I tell them to pick just one and go from there. This focus is so important, because if you can’t articulate your value proposition clearly, you can’t sell it.”TOOL 3: AN AMAZING BRAND FROM THE GET-GO
In today’s brand-based marketplace—where 80% of consumers say authentic branding is an influential factor in their shopping—entrepreneurs must invest in their company’s brand early and often. “Most business plans don’t include a detailed outline of the company’s brand,” explains Merril Mascarenhas, managing partner at Toronto-based Arcus Consulting Group, who works to help companies grow. “But a good brand is an expression of your core value proposition. It’s the touchstone of the business.” Yes, branding is a tough expense to swallow when you’re getting started, but professional marketing materials and strategies are no longer a “nice-to-have”—they can significantly accelerate early growth.
For Richard Ross, president of Sunshine Renewable Energy (STARTUP 50: No. 12), a three-year-old consultancy and vendor of heat pumps that help homeowners and small businesses conserve energy, branding has always been a top priority. “Since the beginning, we have had a strong strategy for branding and marketing,” he explains. Ross attributes much of the Dartmouth, N.S.-based, company’s growth—sales ballooned 620% between 2013 and 2015—to the quality and scope of its branding. In fact, thanks to analytics, he has been able to establish a clear return on his investments: “We can actually measure exactly who came to our business because of it.”
Sunshine’s branding efforts have involved investments in search engine optimization, Google AdWords, a comprehensive social media presence, direct mail and even newspaper ads. All promotional materials feature the company’s bright yellow and green logo, meant to evoke its environmentally friendly work. But there’s more than just slick window dressing: Ross’s branding mantra is “content, content, content.” All marketing materials are filled with language that quickly and directly answers the first questions prospective customers might have about the business, namely: What does it do, and what makes it different from other brands. Sunshine’s blog, for instance, crams its regular posts with SEO-friendly keywords and phrases, including such cumbersome but Google-friendly sentences as, “How long is the payback on a ductless heat pump in Nova Scotia?” By peppering blog posts with exactly what people are looking for, the company is able to provide site visitors with a one-two punch—useful information packaged in a clear, professional brand identity—that quickly conveys legitimacy.TOOL 4: A PERPETUAL RECRUITING PROCESS
Much like branding, recruiting is something that is easy to overlook in the startup phase. It’s difficult to find the right staffing balance: Bring in too many people too soon, and it can overtax your balance sheet. But bring in too few, and you could be missing great individuals poised to help the business grow—not to mention pushing the talent you do have to burn out. This is why, when growth starts to accelerate, many companies scramble to bring on whatever employees are available, which leads to bad hires and all sorts of nasty consequences.
One way of handling the problem is to hunt for talent on an ongoing basis and develop a stable of prospects. TheRedPin (STARTUP 50: No. 36), a Toronto-based online realty startup whose sales increased 238% in the past two years, doesn’t aim to have the most agents possible—“It’s not a numbers game,” says co-founder Tarik Gidamy—but Gidamy and his partners do hope to lure promising talent from their competition. Because hiring timing is so unpredictable, they work to keep the hiring hopper filled by appealing to Realtors currently working at more traditional brokerages and by dangling the promise of a positive and supportive working environment. There doesn’t have to be a specific position open or even a specific deadline; these proactive entreaties are meant to ensure that when TheRedPin does need to fill a position quickly, there are plenty of qualified hires who have a good feeling about the company as an employer.
Gidamy says the company’s approach to content marketing—there’s that branding imperative again!—also helps warm up potential hires. TheRedPin stocks its websites with informative articles of use to realty professionals, which has made it a valuable resource for thousands of agents, says Gidamy. “[Prospective employees] often come to us after having a positive interaction with the site,” he says. This creates a nice buzz about the company at minimal cost and also ensures would-be hires are the kinds of recruits the company is looking for: knowledgeable, service-oriented, driven agents; the type of hires interested in “constantly learning” about their trade. In essence, this mode of recruiting involves some self-selection, which draws in employees who really love what the firm stands for. “In the end, you get a very loyal group of people,” says Gidamy, who adds that the TheRedPin’s retention rate —a bugbear for many real estate firms—is “better than almost any other brokerage in the country.”TOOL 5: CLEAR EYES
Let’s get real: All the superlatives about the work involved in starting a business are, well, pretty much true. That means you must match your ambition with realistic expectations—namely, that any notion of work-life balance will probably disappear for a while.
“Make sure you truly believe in your idea and are ready to work harder than you ever have before,” advises Kelly Harvey, creative director of Kelly Harvey Living (STARTUP 50: No. 47), a four-year-old furniture manufacturer and interior design outfit based in Vaughan, Ont. “You must be willing to forgo other activities and luxuries.”
To keep sane in the hectic first few years of the business, Harvey taught herself to work smarter. When she started to see signs she was becoming unproductive, she’d stop and take breaks—actual, unplugged breaks. She’s convinced it’s been key to the company’s success. “There is nothing wrong with resting,” she says. “You need to be at your best at all times when you work. Otherwise, there is no point.”