Your Business News
Growth-stage tech: Where serious contenders gain momentum
June 2, 2023
Authored by RSM Canada LLP
Joel A. Humphrey, CPA, CA shared this article
ARTICLE | June 02, 2023
Your technology venture is less about investors and financing now and more about sales. Your product or products have shown their mettle, and people are more aware of your company and what it has to offer. Growing the customer base is becoming ever more important as you look to fund new staffing, continued R&D and future expansion—and keep well ahead of customer churn. The key will be a focus on scaling up your sales team and equipping them with the right tools and processes to support continued sales growth.
"In scaling your technology and processes, you're ultimately building that governance and process automation up front in a CRM or CPQ tool. That information feeds down to the back-office technology, primarily from the ERP and other applications around the ERP"
Chris Zak, Principal, Technology Consulting, RSM US LLP
Key considerations for tech company success in the growth stage
At this stage of the business lifecycle, most technology firms are focused on driving sales growth, maintaining the customer base and selling into that customer base. Among the specific concerns:
Scaling the sales team effectively
- Build a repeatable sales model through standardization, policy/procedure governance and process automation.
- Look toward standardization of sales processes, as divergences between teams can harm your data.
- Involve your sales team with CRM system selection if you don’t already have one in place.
- Enable the sales team with information and insights to more effectively prospect, qualify and close new deals, as well as gain visibility into overall sales effectiveness.
- Create a hybrid, cost-effective sales channel through e-commerce, direct sales and partner channels.
- As you scale more to market fit, reevaluate how you go to market and how you segment your customer base. You may want to explore new product offerings adjacent to current products, new markets and the evolution of existing service offerings.
Expanding the customer base while nurturing existing customers
- Stay focused on portfolio governance and ensuring cross-functional alignment for product releases.
- Build a more optimized service delivery model to drive greater adoption upfront.
- Shift to a more frictionless and automated renewals process to improve renewal rates.
- To manage your renewal base most effectively, look into better process automation controls to handle data visibility and governance.
- Identify ways to sell into the existing customer base so that they are even more invested in remaining your customers.
- If your sales team is responsible for acquiring new customers and servicing existing customers, consider splitting the function into separate teams or reviewing compensation and commission structures to incentivize sales team efforts in a manner consistent with strategic priorities.
Scaling back-office operations to support the front office
- Pay attention to financial reporting controls and build out more robust financial planning and analysis functions.
- Look into solutions that manage revenue standards and tax compliance.
- Are you going to serve customers across the globe? Do you have systems in place to handle the implications of transactions in a foreign currency?
- Evaluate your IT infrastructure in general, including your ERP system, to ensure that it will meet the company's growing needs.
- Move toward more enterprise-grade systems, particularly for billing automation, revenue recognition software, customer relationship management and quoting.
- Consider further enhancement of controls protecting your intellectual property and cybersecurity in general. As you grow, your IP becomes more attractive for theft.
"When companies invest in customer success, professional services and building a more optimized delivery model, they improve customers’ adoption and experience—in turn, this enables greater upsell potential and makes customers less inclined to churn."
Paul Morgis, Manager, TMT Industry Advisory, RSM US LLP
With organizational growth, much of your effort revolves around the customer base, but don’t forget the work environment. In particular, don’t forget the people—their cohesion as a whole and as individual teams, as well as their overall satisfaction, matters to your success.
- Make sure you are hiring the right people and ensure that new staff has the skills to carry the company forward into expansion and exit stages.
- Consider ways to streamline your onboarding processes and to take some strain off existing staff in training new people. This could include the creation of training videos that explain various systems and how to troubleshoot them, outline performance expectations and more.
- For key functions, continually evaluate whether these are best fulfilled under an outsourced, co-sourced or in-sourced model.
- Analyze and update total compensation to ensure compensation programs are competitive and scalable to attract and retain talent.
- Ensure that incentives and compensation are aligned with strategic goals.
- Keep the company culture intact, but also look for ways it might evolve with the growth of the company.
Call us at 1 855 363 3526 or fill out the form below and we'll contact you to discuss your specific situation.
Source: RSM Canada
Used with permission as a member of RSM Canada Alliance
RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.
FCR a proud member of RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.
For more information on how FCR can assist you, please call us at 1 855 363 3526