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From Keynesianism to Neoliberalism: Shifting Paradigms in Economics
Source: InternationalBusinessGuide.org
15 Things You Need To Build An Online Business
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Startup Growth: 5 Ways to Support It
Many startups attempt to achieve growth "organically," by selling a substantial amount of products and services to the largest target market possible, in terms of geographic area. But at some point, to keep up with current orders while attempting to achieve revenue growth, a company has few options. It will need to increase production capacity, delay customer deliveries or increase prices, which in effect will turn some customers away. It's a nice problem to have, but it's a problem nevertheless.
When a startup's sales hit a wall in terms of the company's production capacity, it's a little late to be considering production alternatives. So it's a good idea to review your operations in advance, determine what aspects of your production line are running at full capacity and which ones are not, and create a plan to increase capacity when the need arises. The plan might include partnering with another company or developing additional internal resources.
Increase Internal Production Capacity
If a startup remains in business, the time will come when it reaches a maximum level of employee and production line output. To overcome this limitation so the startup can continue to grow revenue, the company must increase its production capacity. Ways that a company can do so include hiring additional employees, extending operating hours, increasing machinery in the parts of a production line that are running at capacity, developing existing personnel by teaching them new skills and running extra shifts.
Partner with Another Company for a Service
One way to gain some traction in growing your output and revenue is to align your products or services with another company's technology. For example, Airbnb partnered with Craigslist to expose their business to the Craigslist user base in the hopes of growing their customer base. While it's unwise to depend on a third party to provide a critical resource or a core competency -- the technology or capability that allows a company to compete in the marketplace -- for the long term, it's a helpful interim solution to a growth-related problem.
Use External Sourcing to Fill in the Gaps
Supplementing your startup's production resources by entering a strategic alliance allows your company to buy the goods that are necessary for your company's operations from another company. For example, an aircraft manufacturer might purchase engines from another company. Items to consider before entering this arrangement include the company's capabilities, employee skills, as well as scheduling and financing options.
Pursue Merger or Acquisition
You can buy resources needed to grow your startup through a merger or acquisition. Either option gives your startup the ability to control the supply of needed resources and key personnel. The option lowers the risk that your production will be negatively affected by a partner's actions or conflicts of interest.
Invest in a Spin-in
Another way to acquire needed talent and products is a spin-in. With a spin-in, your company invests in another startup that's formed to create a certain product and, once the product is produced, buys the startup at a predetermined price. For example, Cisco has invested in and later acquired three spin-ins for an average cost of $763 million each. With a spin-in, the research and development company and the investor agree to a set of milestones that, when achieved, trigger an acquisition.
When a startup is faced with production limitations, it must overcome the problem or cease to grow. Effective leaders will plan for that eventuality long before it happens. The plan might include investing in a spin-in, developing additional internal resources or partnering with other companies to acquire the resources that will allow the startup to continue to grow.