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 Growth 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.”