By Greg Waisman 

Global startup investment in 2023 declined significantly, falling 38% year over year to just $285 billion. Despite the funding challenges, many business leaders remain eager to grow and scale their companies in 2024.

One study shows more than 50% of founders and CEOs maintain confidence in their ability to grow their companies regardless of global macroeconomic conditions. This optimism is truly inspiring.

As a founder who steered his company to $50 million in annual recurring revenue, I want to share some insights that proved helpful during trying times.

How to prepare your business for scaling

First things first: Change your mindset.

You need to have full understanding and confidence in what your company will be doing in the next one to three years, as well as a coherent strategy and disciplined focus. A clear and well-defined action plan should take center stage, one that focuses on maximum efficiency for the time and effort invested.

Until 2023, startups tended to prioritize “growth at any cost,” often operating at a loss due to successive venture capital investments. This precarious mindset resulted in a significant number of companies succumbing to financial pressures and many even closing down.

Now, ventures must focus on profitable core products for financial stability and longevity.

There will likely be situations that cause you to feel like you are missing out on opportunities that your neighbors may be pursuing. Do not give in to this impulse.

Avoid haphazard experimentation, as it often wastes resources and demotivates the team. Success comes from a strategic focus, using market downturns as opportunities to refine and enhance your main products

Growth tactics your startup can use

Let’s go with a personal example.

In 2022 and 2023, my company shifted its growth strategy, focusing on critical indicators like revenue and margin rather than just turnover.

We optimized profitability, enabling higher earnings from the same client traffic. This involved analyzing cost structures, implementing efficient ideas and reducing unnecessary expenses. The main motto was to achieve maximum gain at minimal cost.

Our team development became more targeted. We hired specialists as needed, reducing training costs. Fewer, focused training sessions led to higher attendance and better outcomes. Instead of mass attendance at industry events, we identified specific goals for each event and sent only relevant team members (10-15 people).

Consequently, we attended more events on a smaller budget in 2023 than in 2022.

This strategic pivot toward cost-effectiveness improved the financial health of our company, contributed to growth and retained profitability even during market dips.

How to scale your revenue

My advice: Diversify the foundation of your revenue.

In order to fortify our revenue foundation, we diversified our client base in 2022. Instead of relying on a few major clients and many small ones, we now maintain a balanced portfolio of at least 10 large clients for each main product, thus evenly distributing revenue.

Support resources are strategically allocated to high-revenue clients, while smaller clients transition to a subscription model. This boosts efficiency, prioritizes valuable relationships, and balances client needs with profitability. Our focus shifted from having more than 200 clients to a varied range across our products.

Also, consider expanding operations across different markets. Previously, we had Europe as the absolute leader in terms of services provided. And while a significant portion of our revenue continues to come from this region, our company has also expanded to the U.S., U.K. and other countries. This guards against localized economic fluctuations and positions us for long-term global success.

Greg Waisman is a co-founder and COO at global payments platform Mercuryo. He is an accomplished entrepreneur and business leader with deep roots in the technology market. Waisman has a wealth of experience in full-cycle business management, establishing fintech-related startups and developing them from the ground up.

Illustration: Dom Guzman

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• Source: https://news.crunchbase.com/startups/scaling-your-business-sustainably-waisman-mercuryo/