Growth Strategies for Start-Ups
Read this chapter on the various growth strategies companies use. One particular area of interest for strategic managers is the best practices to build growth for new start-ups in the evolving marketplace. This video will teach how Hubspot CEO Brian Halligan addresses growth. He offers an analogy to showcase how much we as consumers invest in start-ups in our daily lives, such as using Spotify and Uber, which are all start-ups.
Growth problems
Inadequate or incorrect internal accounting
All firms, whether young or mature, need cost accounting systems which can report costs and - as far as they are specifically attributable - revenues per cost unit, cost center, and department. It is important that start-ups establish systems for unit cost accounting, cost center accounting, and breakeven analysis in order to be able to assess economic inefficiencies and sources of loss by means of target/actual comparisons and profit margins. If the competition is fierce, firms should also establish target costing to be able to undermine competitors by adjusting price policy.
Doing without any kind of cost accounting leads not only to the fact that sources of loss remain undiscovered, but also that profit potentials stay hidden as well. Both of these points represent possible growth risks. Start-ups must therefore avoid this risk by establishing cost and profit accounting, and a breakeven analysis as quickly as possible.