The best framework for scaling your business
By ansaradaMon Nov 05 2018Capital raising, SaaS
Ansarada CEO, Sam Riley spoke earlier this year at Blackbird Venture’s Sunrise Island event on raising capital and running a successful due diligence process.
The pièce de résistance? The best SaaS measure framework, as shown above.
The framework comes from Winning By Design, a company that works with high-growth tech companies to help them adopt a scientific approach to scale.
Why do you need a framework?
A framework like this one supports your strategy and helps you understand your essential success measures. These are the mechanics of your business, and an impact on any one area will have an impact on the whole. And these drivers of growth are exactly what an investor wants to see.
“To be able to [show them] that, it doesn’t start with an end number,” said Andy Farquharson, founding partner of Winning By Design. “There are lots of these little numbers happen along the way – along those key moments in the sales process – which VCs really want people to be able to understand.”
Get to know your conversion rates
If you’re running a SaaS business, you’ll be familiar with the fact that after you win a sale, you then have to manage the other side of the funnel which includes expanding and growing the account without churning. (That’s why it’s a bowtie and not a funnel.)
At the top, you have your marketing team driving awareness. You then convert those leads into opportunities, then convert opportunities into Sales, and so on and so forth – the business expands from there.
It’s of the utmost importance that you’re able to map out what you’re doing in your business today and what your conversion rates are at each of those stages. You should also seek to understand your conversion rates in terms of hours, so you can accurately predict timelines.
You don’t have to be at this level of detail just yet, but understanding the mechanics of your business is the key to your potential success (or otherwise). You either know it really clearly, or you don’t.
Win over investors with everything they want to know
Investors will be impressed not only that you’re measuring these numbers, but that for every stage of the sales process, you have plans for managing them and people responsible.
“They want to know that the money they’re investing is going to be used efficiently. To do that, there’s got to be some data,” said Farquharson.
With a framework in place, you’ll be able to demonstrate that you know how much you want to raise and why. And when you apply those funds, you know where they are going, what they will do to your numbers, and how much time it’ll reduce from the process.
And Farquharson says you should start as early as possible. “You really need to start understanding and learning those metrics as soon as you start the business.” This is what is going to keep your business in its best shape, and it’s critical to getting what you want out of a raise.
To learn how Ansarada’s platform can give you insights into all the risks and opportunities facing your business at any stage, request a demo today.