How to Map Out Your Startup Business Expansion in a Volatile Market
These strategies will help startup businesses grow sustainably in an uncertain market.
The pace of change in today’s market is so fast and volatile that companies of all sizes, especially the startups risk their very survival unless they become more disruptive and more innovative. Without adopting the changes and following the right tactics, no startup can survive or expand the business in this volatile market.
Here are 5 surefire ways that every startup entrepreneur should follow in order to expand their business.
1- Infuse More Working Capital
According to Business Dictionary, “Capital infusions are typically made by company management to prop up a division or subsidiary. Venture capitalists will infuse cash into a start-up company until it can generate profits on its own.”
Infusing more working capital than usual is necessary when there’s uncertainty and unpredictability in market. So how much working capital is needed for a startup business to stand out in a volatile market? Well, to answer this question, you need to first understand how money will flow through your business, or rather say the working capital cycle of your business. The shorter the working capital cycle is, the more effectual a company’s working capital will be. The amount of working capital a company has is a proper measure of its liquidity, efficiency and financial health. Undoubtedly, a company with positive working capital, which denotes more assets than liabilities, is found as being in good financial health.
2- Have Right Employees On Board
Building reputation of a company is considered as one of the challenges for many startup businesses. Every startup owner wants to make a company synonymous to good work, professionalism and quality service. Having right people on board is really important because employees act as the face of a business. The employees, suited to a business need, are responsible for long term sustainable growth of that company. When you bring out the flawlessness from your employees, in return, you can get the support from them and establish a lasting reputation of your company in a volatile market.
Eric Gnock Fah, COO & Co-Founder at Klook, believes that having the right talents at different phases is the key to a startup’s robust growth. Eric shared his own experience - “Klook started from a staff of 3 and now have over 500 employees across 15 offices worldwide in less than 4 years. To start off, we had country leads onboard that have a strong knowledge of their local market but with a global perspective. The country leads then hired versatile talents — people who are able to hit the ground and get things up and running using whatever creative ways necessary. As the team grows globally, we now also have well-seasoned executives bringing in years of experiences to sustain Klook’s growth in the long run”.
3- Create a Good Work Culture
“Strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results”, rightly said by John Kotter, a professor of leadership at Harvard Business School, in his book “Corporate Culture and Performance”. Work culture can make or mar the performance of employees in any business sector. If you really want to map out your business expansion in a volatile market, you must keep a good work culture in your office to make your employees satisfied and boost productivity.
Eric Gnock Fah follows various useful ways to create a productive work culture in his office. “To have a productive work culture, we encourage our staff to be creative, respectful, willing to share, and are on a continuous learning curve. Besides gaining full potential of a fast-paced career with us, employees also enjoy the perks like happy hours and the flexibility to work at offices”, shared Eric.
4- Search New Markets to Sell
Exploring secondary markets for your business is a good way to firm up your long-term outlook in a volatile market. On top of that, once you expand, you are afforded the luxury of an additional customer base to fall back on if there will be any struggling situation ever with your primary market. Therefore, plan and implement a growth strategy to search new markets to expand your startup business before your current market flattens out - this will not only help you stand out when market is volatile, but also give you a considerable edge.
Eric shared how he with his team expands his business by exploring new markets, “In addition to conducting studies for the new markets, factoring macro-economic scenario and industry projections, most importantly we also go local. We meet with people on ground and spend time in the market to obtain first-hand information. We then roll out initiatives by tapping into success of our other existing markets and observe the scale of tractions that come in from the new markets.”
5- Understand Your Limitation
Knowing your limitation, which means being aware of what kind of performance you can really expect from your current business model is an important factor in business growth. When you understand your limitation, you get aware of your strength and weaknesses, and after that the decisions you make to move forward becomes one of the most essential factors in your business expansion even when the market is volatile.
Volatile market brings both daunting challenges and exciting opportunities for startup businesses. Success in such market requires thinking long term, infusing more working capital than usual, having right people on board, maintaining a productive work culture and exploring new markets to sell. And don't forget to be aware of your business limitations. In time, startup companies that cultivate these attributes could certainly reap outsize rewards in a volatile market.