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Can Your Company Raise Money? Ask These Questions First.

To grow, you've got to spend. But where does the money come from?

This story appears in the January 2018 issue of Entrepreneur. Subscribe »

So you think you’re ready to scale. The foundations of your business are solid, revenues are up and word is getting around. Now it’s time to grow your team, increase your marketing and maybe even move to a bigger space. Right?

Sakonboon Sansri | EyeEm | Getty Images

Not necessarily. Scaling isn’t just about increasing revenues -- but increasing revenues exponentially, while keeping costs associated with the increased revenue nominal. It seems obvious. But neglecting this fact has sunk countless founders. They overspend on marketing without having proved their product; they bloat their staffs without knowing how those hires will boost revenue; they buy too much inventory. And they run out of money.

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