Scaling a startup is an exciting yet challenging journey.
While founders are often consumed with developing their product or service, establishing a strong foundation early on is critical for sustainable growth.
Our CFO Janelle Gorman recently sat down with Elizabeth Graham, Vice President, Startup Banking for J.P. Morgan’s Innovation Economy business and Allie Saviola, Strategic Partnerships Manager at Anrok to discuss the must-haves for long-term growth.
Here are the key steps startups need to take to ensure they scale successfully.
1. Establish a Scalable Financial Infrastructure
Many early-stage founders view financial infrastructure as a secondary concern, but setting up the right systems and relationships early can prevent major headaches down the line.
According to Elizabeth, “As challenging as it may be to set up service or software providers in the early days, it will be even more difficult to build out those processes at the Series B or C stage, or as you’re preparing for a transaction later in your company’s journey.”
Thinking long-term about your banking, financial, and compliance systems will help ensure smooth scaling with limited disruptions.
Choosing the right financial institution is a crucial step. Consider whether your future growth will involve venture capital, venture debt, IPO, or M&A. A firm with expertise in these areas can provide guidance and continuity as you scale.
Additionally, automating tax compliance is essential. SaaS startups, in particular, often discover tax exposure too late.
Allie emphasizes this point. “Sales tax compliance is not probably one of the first things that you’re thinking of when you’re setting up your business. But it’s really important to scale seamlessly.”
Integrating compliance into your financial infrastructure from day one prevents costly retrofitting down the line.
Implementing bookkeeping and cap table software is another key step. Investors scrutinize financial operations closely, and using software to manage finances from the start signals maturity and operational readiness.
2. Nail the Basics and Align with Strategic Goals
With so many areas to focus on in a startup, it’s essential to define your strategic direction early. Janelle points out, “Wherever you are, you’ll have way more things to do than you can possibly fit into your day or your budget. You have to think big picture in order to know where to start, so you can set a foundation for growth.”
Setting clear strategic goals helps founders avoid trying to do too much at once.
Instead, identify the top three priorities for your business and align resources and decision-making around these priorities. Iteration and refinement are key, as scaling is a dynamic process. Regularly reviewing your strategy and adjusting based on market conditions and internal performance metrics ensures you stay on track.
3. Build a Strong, Flexible Team
Startups often operate on tight budgets, making it crucial to optimize team-building strategies. Leveraging fractional resources and outsourcing can help meet resource needs efficiently. AI-driven systems and part-time specialists allow companies to scale while keeping costs manageable.
Investing in expertise, not just systems, is another important factor. While technology is crucial, having knowledgeable advisors, mentors, and industry partners can provide the strategic insights needed to grow.
4. Plan for Global Expansion Early
Even if international growth isn’t on the immediate horizon, preparing for it early can save time and money later. Elizabeth notes, “Thinking about currency management before you realize you need it” ensures a smoother transition into global markets when the time is right. Setting up the right infrastructure in advance prevents last-minute hurdles that could slow down expansion.
Understanding international tax implications is another critical consideration. Expanding into new markets introduces complex regulatory requirements, and establishing compliance systems early prevents last-minute complications. Companies that proactively plan for these challenges position themselves for sustainable growth.
Final Thoughts
Scaling a startup successfully requires more than just ambition – it demands a well-thought-out strategy, the right financial infrastructure, and a smart approach to resource allocation.
As Janelle aptly puts it, “Fixing things that are messed up or changing things that aren’t adequate is a lot of work. That foundation is everything.” By focusing on these early steps, founders can set the stage for sustainable growth and long-term success.
To learn more about potential sales tax exposures, please reach out to [email protected] or book a demo here.
If you’re interested in learning more about Startup Banking at JP Morgan, please reach out to Meg at [email protected]
