Succeeding as a start-up has gotten harder in recent years. In 2014, the U.S. start-up rate dropped to a 40-year low of 452,835, significantly below the levels of 500,000 to 600,000 new companies a year typical from the 1970s to the early 2000s, U.S. Census data shows. The Great Recession, consolidation by large firms, competition from big companies emulating start-up tactics and high taxes and regulations have all created obstacles for start-up companies trying to compete. Start-up rates have begun to recover since 2014, but still have a ways to go to reach pre-recession levels.
One of the keys to starting up successfully in this challenging economic environment is learning how to use lean tech to achieve agility. Technology can give you the equalizer you need to compete with bigger firms by being more efficient. Here are four ways you can harness technology to enhance your agility and grow your start-up.
Implementing Data-driven Decision-making
One powerful tool to give start-ups an agility edge is applying big data analytics for data-driven decision-making. Using data instead of guesswork can help you make more objective decisions about your marketing, sales, and operational decisions, improving the efficiency of your activities and generating a bigger return on investment and higher profit margins.
There are multiple ways you can incorporate data into your decision-making. The foundation of good data-driven decision making is identifying which key performance indicators to track, Greenfield says. For example, Curata has compiled 29 of the most important marketing and sales KPIs to track, divided into seven major categories. To illustrate, in order to track how your marketing promotions are being consumed, you can track items such as page views, unique visitors and average time per page for webpages, and email opens, clicks, and downloads for email marketing campaigns. You can track other variables in areas such as email subscriber and social media follower retention, social sharing and engagement and lead generation.
Once you have this type of data, you can use it for A/B split-testing to see how your results vary when you adjust different variables. You can then make adjustments based on objective data for genuine improvements. You can apply this to any area of your business, including marketing, sales, customer service, inventory management and other business functions. PCMag reviews some of the top business intelligence tools for effective data-driven decision-making, which include IBM Watson Analytics, Microsoft Power BI and Google Analytics.
Another way technology can help you improve your agility is by helping you streamline your collaboration. Traditional collaboration technology is inefficient, revolving around email for communication and file sharing. This is cumbersome for communicating with teams of workers, especially if someone pops into the conversation midway through and missed earlier parts of the email thread. It also makes it challenging to keep file versions in sync if one person is updating a file while someone else is still working with an older version. Worse, email is a huge distraction and represents the biggest time waster in the workplace, with Altassian data showing that the average worker checks their email 36 times an hour and receives 304 emails a week.
To reduce email clutter and improve agility, companies have been turning toward new collaboration methods modeled on social media, where groups of conversation participants can see the same messages and file versions are kept synced to the latest updates. Tools such as Slack and Microsoft Teams employ this streamlined approach to collaboration.
Syncing Budget to Growth
In order to stay agile, it’s important to keep the growth of your revenue in sync with the growth of your expenses and budget. One of the biggest problems for fast-growing companies is growing so fast that expenses start to outpace sales and incoming cash flow. In fact, two-thirds of the fastest-growing companies go out of business within five to eight years due to unsustainable growth, research by the Kauffman Foundation has found.
You can address this problem by applying business intelligence to your accounting software data and using it to predict trends correlating your revenue and expenses. Accounting apps such as QuickBooks Online can connect with reporting tools such as Fathom to produce automated reports based on accounting KPIs.
Protecting Your Business as You Scale Up
As your company scales up, your business becomes a more inviting target for cyberthieves. Half of U.S. small businesses have been hacked in the last year, according to a report by Keeper Security and the Ponemon Institute. Subscribing to an identity protection service can provide you with some insurance in the event your company becomes a target, as well as early alerts to help you respond quickly to breaches.
Today’s cybercriminals aren’t just after your money. They’re also out to destroy your files, as with recent Petya ransomware attacks. Implementing an effective file backup system using an automated cloud backup can help you recover from this type of attack. Tom’s Guide provides reviews of some of today’s leading cloud backup services, which include Backblaze, IDrive and Acronis.